By Joshua Avedon
As the U.S. stimulus plan continues running the legislative gauntlet, the British government has just approved 42.5 million pounds (over $63 million) for a "third sector action plan" which includes a community resilience fund to help small organizations deliver services to the most needy, a "modernisation fund" to help with collaboration and mergers of nonprofits and a volunteer brokerage scheme that will help unemployed workers gain new skills while helping their communities.
Here in the U.S., many people have called for government money from the stimulus to be directed to American nonprofits - but perhaps there are steps we can take as a community of public interest organizations that don't require a handout, just all of us joining hands.
How about a recovery plan by and for America's third sector economy?
One bright light in the economic train wreck is that the nature of philanthropy itself has changed greatly over the past few years, thanks in part to the Internet, to the advent of "venture philanthropy" and to the maturing of the baby-boom generation, which will be on the receiving end of the largest transfer of wealth in history over the next decade or so. These changes have increased the adaptability and ingenuity in the nonprofit sector, and they make the likelihood of a recovery much more possible.
We're seeing a paradigm shift in the way that work for the social good is funded and executed. More are more funders now are partners in the work itself, alongside the nonprofits they finance. It's now possible to envision a coordinated response that mobilizes major donors, organizations with robust infrastructures, and individuals giving in small amounts, all working together to initiate the recovery.
The first step in any effective response requires a real accounting for which organizations have been hit, and are at most risk in the short-term. There will be an obvious and much warranted emphasis on nonprofits that deliver services to the needy, because even as their resources have dwindled, the need for their programs has increased. But it's also important to make sure that organizations that work for systemic transformation don't become victims; it is their work to change our culture and society that has the most long-term impact. In a recent study by The Atlantic Philanthropies, CEO Gara LaMarche noted that "funding advocacy and advocates is the most direct route to supporting enduring social change for the poor, the disenfranchised and the most vulnerable among us, including the youngest and oldest in our communities." In our triage of nonprofit victims of the downturn or the Madoff scandal, we must be able to keep the big picture in mind even as we move swiftly to staunch the bleeding of those patients most vulnerable.
Let's start with the grass roots and work up.
Projects like donorschoose.org, JGooders.com, and Kiva have pioneered the concept of targeted micro-giving and loaning- matching up organizations and projects in need with individual donors who give in small amounts to achieve modest goals. While some of these are for-profit enterprises supporting the nonprofit sector, many are nonprofits themselves; Razoo has figured out how to do this without charging donors or nonprofits any fees. Any nonprofit that doesn't have a micro-gift strategy needs to get one right away. Technology has made this simple, and these new initiatives, which make giving feel personal, even when doing so online, are going mainstream. A number of other projects have sprung up that help coordinate volunteer labor and community support systems, like lotsahelpinghands.com, JCorps, and networkforgood.org, which does both donations and volunteer coordination. The combination of efforts like these can be a lifeline for small nonprofits struggling to survive.
At the tree trunk level, we have large-scale nonprofits with stable infrastructures and expansive donor bases. They are well poised to survive hardship, and normally do so by downsizing and cutting back on program delivery. But rather than reaching for the pink slip pad, these organizations should consider ways to become more efficient rather than just scaling back across the board. Programs that don't achieve their goals should be cut, but the ones that succeed should have their budgets expanded. Technology and inter-organizational cooperation are the keys to this effort.
One thing this crisis should be making clear: we are all in this together. There is no room for turf battles in the new paradigm.
At the tree top level, there are megadonors and large foundations. There has already been a sea change in the way that philanthropists see their long term giving, with many foundations opting for an accelerated schedule of disbursements in an effort to have the maximum immediate impact. Some foundations that usually only give a minimum yearly disbursement have actually increased their expenditures, not just to compensate for the reduced dollar amounts now that their corpus has shrunk, but because they believe that intensified investment in their grantees now will keep them in business for when the economy rebounds. And it isn't simply about the dollars: some foundations are now considering how they can help their grantees collaborate, build capacity and develop new technologies in order to make sure their investments to date keep doing good.
We could survive crises like the economic collapse or the Madoff scandal by hunkering down and just trying to weather the storm. Competition for scarce donor dollars could cause us to go head to head with one another, each of us hoping that our particular cause won't be a casualty in the lean years ahead. Philanthropists could draw back and decide that increased giving will have to wait for more prosperous times ahead.
Or we could mount a coordinated effort to fight back the torrent, and demonstrate that those of us working in the nonprofit world are capable of seeing the big picture and will join hands to rescue America's third sector economy.
Joshua Avedon is Jumpstart's COO & Director of Strategic Initiatives