Our Evolving Sector: A Conversation with Nonprofit Leaders

Kyle CaldwellMatthew Downeyby Kyle Caldwell and Matthew Downey


A few weeks ago, the Johnson Center’s Executive Director Kyle Caldwell and Director of Nonprofit Services Matthew Downey traveled to Michigan’s Upper Peninsula for the annual U.P. Nonprofit Conference to engage in a dialogue about the evolving nature of the nonprofit sector.

Nonprofit organizations and the staff and boards that lead them are often so mired in the activities of their day-to-day existence that they rarely have the opportunity to step out of this realm and consider the sector that surrounds them, how it’s evolving, and how their organizations are effected.

As a jumping off point to this discussion, participating nonprofit leaders were presented with three key trends that serve as evidence of this nonprofit evolution.

First, society is turning to nonprofits to function as economic drivers for their communities in addition to providing their more traditional safety net roles.

This was most evident during the recession, when nonprofits demonstrated that they could serve as economic stabilizers: their employment and service-delivery roles remained steady at a time when commerce and government were shedding jobs, reducing services, and cutting expenses. Post-recession, nonprofits have been rewarded for their leadership by being increasingly called upon to continue to fill gaps (market failures) where other sectors cannot or will not. Employment and economic data collected prior, during, and after the recession articulate this reality.

Some recession-era examples concluded that, through job readiness programs, nonprofits played the role of major employers. Affordable housing for working families provided by nonprofits were, in some cases, the only examples of economic activity in many communities. The same was true for the role that nonprofits played as land banks, and in related property redevelopment efforts for commercial use.

Second, the lines between nonprofits, government, and business roles continue to blur.

In many rural and urban regions, more and more municipalities are being pressured to think about consolidation and service reduction, which forces a change in what residents can expect from their local governments.  Invariably, this applies pressure on nonprofits to fill in the gaps left in that wake. In some cases, nonprofits have been asked to literally step into roles that were once played by government. Examples of this include the leadership nonprofits have demonstrated in safety net programs, services for low-wage workers, and criminal justice reform efforts. As healthcare continues to undergo reform, nonprofits, particularly in rural communities, will continue to increase their roles.

Third, nonprofits will continue to experience both internal and external demands for data-driven decision making.

Collective impact initiatives and other data sharing efforts will continue to emerge creating a greater separation of haves and have-nots among nonprofits that can innovate and respond to this data-driven environment and those that cannot or chose not to fully engage.

As a follow up, the nonprofit leaders participating in this conversation were asked to consider what trends they would like to see emerge and start to shape the sector. Not surprisingly, many responded by suggesting only incremental shifts in the ways in which organizations have historically functioned. However, consolidation and greater simplicity in the mechanisms available for generating revenue were the most commonly reported ideas.

As a wrap-up to this interesting but rare opportunity for nonprofit leaders to collectively contemplate the reality of our constantly evolving sector, it was clear that one major question lingered: Will the role that nonprofits play in mobilizing basic, grassroots civic engagement — a core component of a healthy democracy and one of our sector’s greatest roles — be devalued or crowded out entirely? As the opportunities and pressures placed on nonprofit organizations become more complex, and as nonprofits respond by becoming more professional and sophisticated in order to meet these demands, the sector must be cautious that day-to-day activities do not become so demanding that they further inhibit our ability to understand our own realities and the communities in which we live and serve.

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