It is not news to anyone reading this that our nonprofit sector is in the midst of great change and transition. Today I am going to focus on where we are headed as a sector. I will outline some challenges facing our sector, some things that are changing in the sector, and some strategies that we as nonprofit leaders can adopt so that our organizations will not only survive but thrive in a new paradigm.
In order to fully understand the challenges we face, we first must accept our own inherent limitations. No organization is perfect. No nonprofit leader is perfect. One of the things I love the most about my current position with the Johnson Center for Philanthropy is that I get to speak to lots of business groups about the nonprofit sector. I always point out to these groups that managing a nonprofit organization is one of the most difficult jobs anyone can take, and the smaller the nonprofit is, the tougher the job it is to manage it.
As nonprofit managers, we are asked to solve the most challenging societal problems: ending hunger and homelessness, educating our youth, helping people find jobs, caring for our environment, caring for the elderly, ending disease… to name only a few. We never have enough resources. We never have enough staff. Our sources of funding are in constant flux. We demand of our leaders that they exhibit an extraordinary array of skills. We are at the mercy of environmental conditions, such as the economy. And we are expected to contend with these issues while producing measurable outcomes.
In addition to these difficult conditions, we operate in an environment that does not fully support our need to hire and retain the most talented staff, nor to take programmatic risks, explore innovation and learn from failure. It appears that just when we think we have figured it all out, the bar gets set higher and the end zone becomes farther away.
If I have not fully depressed you, I would like to take stock of where we are as a sector.
Today, the sector is under great pressure. There has been an unprecedented rise in the number of new nonprofits.
To make matters worse, in recent years philanthropic giving has seen some declines and has not yet fully rebounded.
The Federal Government is anticipating steep cuts in programs that contract with nonprofits.
There are many other issues that plague us as well, such as the pressure to change our funding models to rely more on earned income, the entry of for-profits into the government contracting arena for social service delivery, public confusion over what a nonprofit is and how we operate, and the negative effect that the few bad actors in the sector have on the rest of our ability to do good work.
Having said all of this, I believe the biggest threat to a thriving nonprofit sector is a reluctance to change and the difficulties associated with managing change. Next week, I’ll discuss some of the changes in more detail.