Nonprofits face harsh new reality

Paul Light, a professor at the Wagner School of Public Service at New York University, spoke Oct. 23 to about 100 members of the nonprofit and business communities at Oasis Inn & Convention Center.

The seminar also included a panel discussion with four area leaders in charity and business: Jim Anderson, president of the Springfield Area Chamber of Commerce; Lloyd Young, director of the Community & Social Issues Institute at Missouri State University; Gary Funk, president of Community Foundation of the Ozarks; and John Rush, president of United Way of the Ozarks.

In his speech, Light pointed out several issues facing nonprofit organizations. Two of the most pressing are declining donor confidence and increased competition for employees.

Perception of waste

Light cited an August survey he conducted that showed 71 percent of people think charities waste “a great deal” or “a fair amount” of donated money. That’s up from 60 percent three years ago.

The lack of trust, Light said, can be traced to several factors – notably the scandals affecting nonprofits and businesses since the Sept. 11 attacks.

“There’s been a series of high-profile scandals in the last five years – the Red Cross after Katrina, for example – and donors demand now that their charities be much more accountable and transparent,” Light said. “They expect them to be able to show that they’re spending money wisely.”

While overall donations this year are up slightly from last year, Light said people are still not giving as much as they could. He estimates that people are reducing their “discretionary” giving – gifts to groups other than religious organizations and alma maters – by as much as 10 percent, “because there’s so much waste among charities.”

Light said agencies should be more financially aware – keep better financial records, be willing to show tax returns and budgets, and know exactly where all money is going.

“When I go to a charity Web site, most focus on the mission, which I already know. I wouldn’t be there if I weren’t interested in helping children or victims of domestic violence,” Light said. “I want their tax returns, their budget information. Show me where the money is going.”

Now hiring

Between 1.2 million and 1.5 million nonprofits are currently operating in the United States, and about 3,000 more are added every month. Add to that the inability to match the pay and benefits offered in the private or government sector and the result is an employment crisis.

“What we know about the nonprofit work force is that it’s highly motivated and it’s highly stressed out,” Light said. “They come in to work in the morning wanting the chance to do something worthwhile, and they go home wondering why they came in that morning. The stress is heavy, the staffing is thin, and the work force is stretched to the limit.”

Gaye Nickels, executive director of Community Alternative Service Program, attended the event and said she constantly deals with staffing issues.

“It’s very difficult to find qualified folks to come on board,” Nickels said, adding that her organization has tried to compete by offering good health insurance to its seven full-time employees. “It is very difficult for nonprofits because you want to hire and keep good people, but the bottom line is still there.

“You have to have the lights on. You have to have heat. So when the bottom line falls into the negative, oftentimes the result is unemployment.”

Employment issues are compounded by a rapidly aging work force – the average nonprofit worker, according to Light, is about 48 years old. The result is experienced employees who continue to age while fresh blood is continually drawn away by the lure of better pay and stability in other sectors.

Board vacancies are also on the rise – 3 million seats currently sit vacant nationally, and the number continues to climb.

The best way to combat the work force issue is for agencies to take advantage of their numbers and cooperate – a point not lost on the panelists.

“Groups need to be collaborating to figure out how to provide services in that environment,” said CFO President Funk. “If we think about everyone as competing, that’s going to be how it is. I think if we can work together to get people to give more, we’ll all be better off.”[[In-content Ad]]