Nonprofit Challenges 09-09-13

7/27/2019 Nonprofit Challenges 09-09-13

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Nonprofit ChallengesWHAT FOUNDATIONS CAN DO

52%ONLY

of nonprofit leaders believe thefoundation funders are aware of th

challenges their organizations fac


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AuthorsE B, P.D.

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About the Center for Effective Philanthropy

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Less than one thirdof nonprofit leaders

believe foundationstake advantage of their

myriad resources tohelp them address their

challenges.

tAbleof Contents

Introduction 4

Key Findings 6

Conclusion 16

Reection Questions 17

Appendix: Methodology 18


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IntroductIonNonprofit organizations face a long list of challenges that starts with fundraising and can in-

clude everything from meeting increasing demands for services to utilizing technology most

effectively. Who do they turn to for assistance as they grapple with these issues? One source of

assistance and support can be foundations, which have a vested interest in nonprofits success

and the resources to help.

Findings

> Only half of nonprot leaders believe foundations are aware of the variouschallenges their organizations face, and most do not think foundations areusing their resources and knowledge to help them address their challenges.

> Nonprots are looking for more foundation help in a) meeting the demandfor their programs and services, b) using technology to improve their effec-tiveness, and c) developing their leadership skills.

> Among nonprots that rely on earned revenue, the majority nd thatmaintaining, or growing, earned revenue is challengingand mostwould like more help from their foundation funders.

To help foundations understand whether nonprof-its feel their challenges are well-understood andto raise awareness of the areas in which more

foundation assistance could be benecial, we sur-

veyed our panel of 296 nonprot executive direc-

tors. (See Sidebar: Who Are The Grantee Voice

Respondents to This Survey?) We asked these lead-

ers to reect on how challenging each of 25 issuesis to their organizations. For issues not related to

contributed revenue, they were asked to indicate

whether or not they believe foundations are in aposition to help, and whether they are looking formore help from foundations.

The data clearly show that nonprots are not look-ing to foundations to solve all their problems. Butin some crucial areas, they are looking for more

help and do not believe foundations are doing allthey could.

4 Nonprofit Challenges: What Foundations Can Do


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The Grantee Voice: Feedback for Foundations

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Organizational Measure Range Median Value

Staff size(in full-time equivalents, FTEs)

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Annual expenses A $100,000 $45 $1.2

Age < 5 > 180 29

Proportion of revenue coming fromfoundation grants

< 1 99 20

The Center for Effective Philanthropy
http://www.effectivephilanthropy.org/http://www.effectivephilanthropy.org/


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Finding 1

Only half of nonprofit leaders believefoundations are aware of the various challengestheir organizations face, and most do not thinkfoundations are using their resources andknowledge to help them address their challenges.

The data indicate that only 52 percent of nonprotleaders believe their foundation funders are awareof the various challenges their organizations face.(See Figure 1.) This may be partly a result of thestrength of relationships that grantees have withtheir funders and, in particular, their degree of

comfort with being open and honest. The morelikely nonprot leaders are to feel that they can be

open with their funders about their organizationschallenges, the more likely they are to report that

their funders are aware of their challenges.1 Onenonprot leader said foundations could initiate

conversations about [our] overall organizationalhealth and ask about our challengesnot in grantapplications, where we feel a need to gloss overproblems, but during the course of our relation-ship. Another commented that foundations should

take the time to learn more about what we

are doing and what our challenges are.

Less than one third of nonprot leaders believefoundations take advantage of their myriad re-

sources to help them address their challenges. Asone said, My foundation funder could offer tech-nical assistance or identify a select pool of resourc-

es that we could use. Many resources are gener-

ally available, but identifying the right resource atthe right price can be time consuming, expensive,

and ultimately disappointing. Another suggestedthat their funders bring us together to meet othergrantees doing similar work in other areas so wecan all learn from each others experiences.

Only 36 percent believe that foundations sharetheir knowledge about what other nonprots aredoing to address challenges similar to those that

their organization faces. One nonprot leader saidfoundations should provide knowledge of bestpractices and additional resources that are avail-

1 A statistically signicant relationship was found between ratings on the items I can be open with my foundation funders aboutthe challenges my organization is facing and My foundation funders are aware of the challenges that my organization is facing.This relationship was of a large effect size.



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able to supplement the work they are funding.Another said, Foundation funders can serve asvaluable resources in offering advice on how other

similar non-prots have been successful in weather-

ing challenging economic times.

Although nonprot leaders appear frustrated thatfoundations are not more aware of their challeng-es, they are not looking to foundations to solve alltheir problems. On a variety of frequently cited

Figure 1: Nonprot Leaders Views of What Their Funders Can Do

60% 80% 100%40%20%0%

Percentage of nonprot leaders

M k v

31%

M k

36%

M 52%

Note: The percentages in this chart reect ratings of 5-7 on a 1-7 scale where 1 = Strongly disagree, 4 = Neither agree

nor disagree, and 7 = Strongly agree.

Take the time to learn more aboutwhat we are doing and what our

challenges are.

challengesincluding productively engaging theirboards of directors and developing and trainingtheir staffmost nonprots are not looking for foun-

dations help. (For a complete list of challengesasked about in the survey, and responses, see Ta-

bles 3 and 4 in Appendix: Methodology.)



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Finding 2

Nonprofits are looking for more foundation helpin a) meeting the demand for their programsand services, b) using technology to improvetheir effectiveness, and c) developing theirleadership skills.

The areas in which nonprots are seeking morehelp are ones that have been much discussed inthe past. However, our survey responses show that

these challenges persist and that nonprots do notbelieve foundations are doing all they could tohelp.

MeetingdeMAnd

The inability of many nonprots to keep up withincreasing demand for their services in recent

years has been well documented. The Nonprot Fi-

nance Funds annual survey revealed that in 2012,52 percent of nonprots could not meet demand

for their services, which is up from 44 percent in2009.2 Stories about nonprots difculties in meet-

ing rising demand have also appeared in the main-

stream media and been discussed by prominentsector leaders.3

More than three-quarters nd this challenging, and

the majority would like more help with this issuefrom their foundation funders. (See Figure 2.) One

leader shared an example of how a foundationdid help her organization meet demand during a

difcult time, saying, A local foundation not onlylled the gap of funding lost from a governmen-tal funding source, but it extended such fundingto a second year, allowing us to truly

2 2013 State of the Nonprot Sector Survey Results, Nonprot Finance Fund(March 2013), http://nonprotnancefund.org/les/docs/2013/2013survey_nat_summary.pdf.3 Susan Johnston, Nonprots Face Challenging End-of-Year Giving Season, U.S. News and World Report, November 12, 2012,http://money.usnews.com/money/personal-nance/articles/2012/11/12/nonprots-face-challenging-end-of-year-giving-season.Susan Livio, Morristown Nonprots Merge to Meet High Demand, Declining Dollars, The Star-Ledger, June 18, 2013, http://www.nj.com/politics/index.ssf/2013/06/morristown_nonprots_merge_to_meet_high_demand_declining_dollars.html. DianaAviv and Antony Bugg-Levine, Social-Service Groups Wont Survive Without New Sources of Revenue, The Chronicle ofPhilanthropy, July 14, 2013, http://philanthropy.com/article/Social-Service-Groups-Won-t/140225/.

http://nonprofitfinancefund.org/files/docs/2013/2013survey_nat_summary.pdfhttp://nonprofitfinancefund.org/files/docs/2013/2013survey_nat_summary.pdfhttp://nonprofitfinancefund.org/files/docs/2013/2013survey_nat_summary.pdfhttp://money.usnews.com/money/personal-finance/articles/2012/11/12/nonprofits-face-challenging-end-of-year-giving-seasonhttp://money.usnews.com/money/personal-finance/articles/2012/11/12/nonprofits-face-challenging-end-of-year-giving-seasonhttp://money.usnews.com/money/personal-finance/articles/2012/11/12/nonprofits-face-challenging-end-of-year-giving-seasonhttp://money.usnews.com/money/personal-finance/articles/2012/11/12/nonprofits-face-challenging-end-of-year-giving-seasonhttp://www.nj.com/politics/index.ssf/2013/06/morristown_nonprofits_merge_to_meet_high_demand_declining_dollars.htmlhttp://www.nj.com/politics/index.ssf/2013/06/morristown_nonprofits_merge_to_meet_high_demand_declining_dollars.htmlhttp://www.nj.com/politics/index.ssf/2013/06/morristown_nonprofits_merge_to_meet_high_demand_declining_dollars.htmlhttp://www.nj.com/politics/index.ssf/2013/06/morristown_nonprofits_merge_to_meet_high_demand_declining_dollars.htmlhttp://www.nj.com/politics/index.ssf/2013/06/morristown_nonprofits_merge_to_meet_high_demand_declining_dollars.htmlhttp://www.nj.com/politics/index.ssf/2013/06/morristown_nonprofits_merge_to_meet_high_demand_declining_dollars.htmlhttp://philanthropy.com/article/Social-Service-Groups-Won-t/140225/http://philanthropy.com/article/Social-Service-Groups-Won-t/140225/http://philanthropy.com/article/Social-Service-Groups-Won-t/140225/http://www.nj.com/politics/index.ssf/2013/06/morristown_nonprofits_merge_to_meet_high_demand_declining_dollars.htmlhttp://www.nj.com/politics/index.ssf/2013/06/morristown_nonprofits_merge_to_meet_high_demand_declining_dollars.htmlhttp://money.usnews.com/money/personal-finance/articles/2012/11/12/nonprofits-face-challenging-end-of-year-giving-seasonhttp://nonprofitfinancefund.org/files/docs/2013/2013survey_nat_summary.pdfhttp://nonprofitfinancefund.org/files/docs/2013/2013survey_nat_summary.pdf


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Figure 2: Top Challenges for Which Nonprots Want More Foundation Help

100%

0%

Percentage

ofnonprotlea

ders

T v

D k

k

v

Tk

M

/v

55%

18%

2%

14%

11%

U v

v

55%

22%

1%

11%

11%

Hv v

k

2%

52%

25%

13%

8%

assess programming and the time to regain the

funding lost from the government. Without thesefunds, we would have had to displace 150 seniors

from our services.

teChnologyIn 2010, a report from the Johns Hopkins ListeningPost Project indicated that one-third of nonprotorganizations did not have enough computers tomeet their needs, one-fth still relied on basic

technologies, and one-third described their use ofinformation technologies for program/service de-livery as limited.4 The state of nonprots techno-

logical capacity and resources has been well docu-

mented for years by the NTEN annual survey.5 Yet,

despite the fact that the needs have been studied

and discussed, only about ve percent of nonprotsreport receiving assistance beyond the grant fromfoundations to help with information technology.6

Of the 77 percent of nonprot leaders who nd us-ing technology to increase their effectiveness to be

4 Stephanie L. Geller, Alan J. Abramson, and Erwin de Leon, The Nonprot Technology GapMyth or Reality?Johns Hopkins Center for CivilSociety Studies(2010), http://ccss.jhu.edu/wp-content/uploads/downloads/2011/09/LP_Communique20_2010.pdf.5 Annaliese Hoehling, The 7th Annual Nonprot Technology Stafng and Investments Report, Nonprot Technology Network(April 2013),http://www.nten.org/sites/default/les/stafng_report2012_nal_1.pdf.

6 Ellie Buteau and Phil Buchanan, Working Well With Grantees: A Guide for Foundation Program Staff, Center for Effective Philanthropy(June2013), http://www.effectivephilanthropy.org/assets/pdfs/Working_Well_With_Grantees.pdf.

http://ccss.jhu.edu/wp-content/uploads/downloads/2011/09/LP_Communique20_2010.pdfhttp://www.nten.org/sites/default/files/staffing_report2012_final_1.pdfhttp://www.effectivephilanthropy.org/assets/pdfs/Working_Well_With_Grantees.pdfhttp://www.effectivephilanthropy.org/assets/pdfs/Working_Well_With_Grantees.pdfhttp://www.nten.org/sites/default/files/staffing_report2012_final_1.pdfhttp://ccss.jhu.edu/wp-content/uploads/downloads/2011/09/LP_Communique20_2010.pdf


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a challenge, two-thirds want more help from theirfoundation funders. One nonprot leader request-ed that their foundation funders provide techno-

logical tools and resources for capacity-buildingsuch as skilled volunteers in addition to funding.Another said, Unrestricted dollars would provide

us with the ability to invest in our infrastructure:technology, staff development and retention, andadvocacy.

leAdership

There has been much talk of leadership challengesduring the past decade: the difculty of attractingtalent to the sector, a potential leadership decit

as baby boomers retire, and the need to develop

upcoming generations of leaders.7

Yet, many nonprot leaders73 percentfeel theylack sufcient resources and opportunities to de-velop their leadership skills. With more than 40

percent of respondents reporting that they havebeen in their position for ten years or longer, this isclearly not only an issue for leaders who are newto their roles. As Bridgespan cofounder Thomas J.Tierney writes in the Stanford Social Innovation Re-view, leadership capacity is crucial to the effective-

ness of nonprot organizations, and without it, thedeepest suffering will be visited upon the millionsof people who rely, directly and indirectly, on theservices that nonprots provide and the social val-ue they create.8

7 Marla Cornelius, Rick Moyers, and Jeanne Bell, Daring to Lead 2011: A National Study of Nonprot Executive Leadership,CompassPoint Nonprot Services and the Meyer Foundation(2011), http://daringtolead.org/wp-content/uploads/Daring-to-Lead-2011-Main-Report-online.pdf. Frances Kunreuther and Patrick Corvington, Next Shift: Beyond the Leadership Crisis, TheAnnie E. Casey Foundation and The Building Movement Project(2007), http://www.aecf.org/~/media/Pubs/Other/N/NextShiftBeyondtheNonprotLeadershipCrisis/Next%20Shift.pdf.8 Thomas J. Tierney, The Leadership Decit, Stanford Social Innovation Review4, no. 2 (2006): 2635.

Figure 3:The Challenge of Inuencing Public Policy

100%

0%

Perce

ntage

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leaders

T v

D k

k

v

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44%

12%

22%

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11%N v .

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As one leader who beneted from foundationassistance in this area said, One of the founda-tions that supports my organization invited me toparticipate in a leadership and executive directorskill-building course that met several times during

the year. I gained much-needed information to de-

velop my skills.

Although there are certainly foundations that haveinvested in leadership development, it is clear thatnonprots are looking for more.9 One leader said,I wish we had more opportunities for training oth-

er than what is offered locally. Unfortunately, eventhough local training may be good we normallyinteract with the same trainers and other nonprof-it leaders over and over and dont get new and

fresh ideas. Most of us cannot afford the travel andregistration expenses connected to larger out-of-re-

gion trainings.

One of the foundations thatsupports my organization invitedme to participate in a leadership

and executive director skill-buildingcourse that met several times during

the year. I gained much-neededinformation to develop my skills.

9 Linda Wood, More Truth-Telling and Candor? The CEP Blog,Center for Effective Philanthropy, July 21, 2010, http://www.effectivephilanthropy.org/blog/2010/07/more-truth-telling-and-candor/. HELP has Arrived, Hawaii Community Foundation, http://www.hawaiicommunityfoundation.org/community-impact/help-has-arrived. Timothy J. McClimon, American Express Foundation:Investing in the Organizational Capacity of Non-prots and SocialInstitutions, Forbes, February 2, 2013, http://www.forbes.com/sites/skollworldforum/2013/02/11/american-express-foundation-investing-in-the-organizational-capacity-of-non-prots-and-social-institutions/.

http://www.effectivephilanthropy.org/blog/2010/07/more-truth-telling-and-candor/http://www.effectivephilanthropy.org/blog/2010/07/more-truth-telling-and-candor/http://www.effectivephilanthropy.org/blog/2010/07/more-truth-telling-and-candor/http://www.hawaiicommunityfoundation.org/community-impact/help-has-arrivedhttp://www.hawaiicommunityfoundation.org/community-impact/help-has-arrivedhttp://www.hawaiicommunityfoundation.org/community-impact/help-has-arrivedhttp://www.forbes.com/sites/skollworldforum/2013/02/11/american-express-foundation-investing-in-the-organizational-capacity-of-non-profits-and-social-institutions/http://www.forbes.com/sites/skollworldforum/2013/02/11/american-express-foundation-investing-in-the-organizational-capacity-of-non-profits-and-social-institutions/http://www.forbes.com/sites/skollworldforum/2013/02/11/american-express-foundation-investing-in-the-organizational-capacity-of-non-profits-and-social-institutions/http://www.forbes.com/sites/skollworldforum/2013/02/11/american-express-foundation-investing-in-the-organizational-capacity-of-non-profits-and-social-institutions/http://www.forbes.com/sites/skollworldforum/2013/02/11/american-express-foundation-investing-in-the-organizational-capacity-of-non-profits-and-social-institutions/http://www.forbes.com/sites/skollworldforum/2013/02/11/american-express-foundation-investing-in-the-organizational-capacity-of-non-profits-and-social-institutions/http://www.hawaiicommunityfoundation.org/community-impact/help-has-arrivedhttp://www.hawaiicommunityfoundation.org/community-impact/help-has-arrivedhttp://www.hawaiicommunityfoundation.org/community-impact/help-has-arrivedhttp://www.effectivephilanthropy.org/blog/2010/07/more-truth-telling-and-candor/http://www.effectivephilanthropy.org/blog/2010/07/more-truth-telling-and-candor/http://www.effectivephilanthropy.org/blog/2010/07/more-truth-telling-and-candor/


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10 William Landes Foster, Peter Kim, and Barbara Christiansen, Ten Nonprot Funding Models, Stanford Social Innovation Review7, no. 2(2009): 3239. William Foster and Jeffery Bradach, Should Nonprots Seek Prots? Harvard Business Review83, no. 2 (2005): 92100.11 Phil Buchanan, Dont Believe the Hype, Believe the Data, The CEP Blog, Center for Effective Philanthropy, April 5, 2011, http://www.effectivephilanthropy.org/blog/2011/04/dont-believe-the-hype-believe-the-data/.

Finding 3

Among nonprofits that rely on earned revenue,the majority find that maintaining, or growing,earned revenue is challengingand most would

like more help from their foundation funders.

There has been increasing attention paid to earned

revenue sources for nonprots over the past de-

cade, with many asserting that nonprot enter-

prise initiatives are on the rise and accountingfor a greater share of revenue.10 The facts beliethe assertions, however: Earned revenue has not

increased its share of total revenue.

11

But the pres-sure to consider how to grow or develop earnedrevenue streams has only increased as governmentfunding has been cut and the competition for con-tributed revenue increases. So, while earned rev-enue may not yet have grown as a proportion of

total revenue, the effort to maintain or grow it is onthe minds of nonprot leaders.

According to our survey, of the 85 percent of non-prot leaders for whom maintaining earned reve-

nue is a relevant issue, an overwhelming proportion

nds it challenging. (See Figure 4.) One nonprotleader said, Support bridge grants that allow or-ganizations to transition to different business mod-els so they can self-generate more income. While18 percent do not believe foundations are in a po-

http://www.effectivephilanthropy.org/blog/2011/04/dont-believe-the-hype-believe-the-data/http://www.effectivephilanthropy.org/blog/2011/04/dont-believe-the-hype-believe-the-data/http://www.effectivephilanthropy.org/blog/2011/04/dont-believe-the-hype-believe-the-data/http://www.effectivephilanthropy.org/blog/2011/04/dont-believe-the-hype-believe-the-data/


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Of the 85 percent of nonprofitleaders for whom maintainingearned revenue is a relevant

issue, an overwhelmingproportion finds it challenging.

Figure 4: The Difculties of Earned Revenue for Nonprots100%

0%

Percentageo

fnonprot

leaders

T v

D k

k

v

Tk ...

M

v

G

v

45%

9%

15%

18%

13%

48%

4%

13%

25%

10%

sition to help, the majority are, in fact, looking formore help from foundation funders in this area.

The majority of nonprots also nd it challenging

to increase their earned revenue, although 25 per-

cent of them do not believe foundations are in aposition to help them with this issue. One leaderwho did receive foundation help that led to growthin revenue explained, One major foundationcame through with a three-year commitment, now

renewed twice, to support a programmatic expan-

sion. This allowed a signicant increase in pro-

gramming and has helped increase revenue.



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N v ,

v v GDP.12 T

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Table 1. The Challenge of Attracting Funding

Total percentage of leaderswho nd this challenging

P extremely

P somewhat

Attracting new foundationfunders

99% 72% 27%

Attracting new individualdonors

94% 59% 35%

Attracting newgovernment funding

72%* 51% 21%

Maintaining fundingfrom current foundationfunders

89% 21% 68%

Maintaining funding from

our current individualdonors

75% 20% 55%

Maintaining currentgovernment funding

64%** 25% 39%

* 23 percent of nonprot leaders do not nd attracting new government funding relevant to their work. Of those who do ndattracting new government funding relevant to their organization, 93 percent nd it challenging.

** 23 percent of nonprot leaders do not nd maintaining current government funding relevant to their work. Of those whodo nd maintaining government funding relevant to their organization, 84 percent nd it challenging.

The Toughest Money to Raise?

12 Suzanne Perry, The Stubborn 2% Giving Rate, The Chronicle of Philanthropy, July 17, 2013, http://philanthropy.com/article/The-Stubborn-2-Giving-Rate/139811/.

http://philanthropy.com/article/The-Stubborn-2-Giving-Rate/139811/http://philanthropy.com/article/The-Stubborn-2-Giving-Rate/139811/http://philanthropy.com/article/The-Stubborn-2-Giving-Rate/139811/http://philanthropy.com/article/The-Stubborn-2-Giving-Rate/139811/


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S

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Table 2. The Challenge of Securing Certain Types of Foundation FundingTotal percentage of leaderswho nd this challenging

P extremely

P somewhat

Securing multi-yearfunding

95% 68% 27%

Securing generaloperating orunrestricted funds

95% 62% 33%

The More Things Change, The More They Stay the Same

13 See J McCray, Is Grantmaking Getting Smarter? Grantmakers for Effective Organizations(2011), http://issuu.com/geofunders/docs/2011_geo_eld_study_nal/5?e=3006942/3389112.Andrea Brock, General Operating Support Remains the Exception,The CEP Blog, Center for Effective Philanthropy, December 6, 2010, http://www.effectivephilanthropy.org/blog/2010/12/general-operating-support-remains-the-exception. Niki Jagpal and Kevin Laskowski, The Philanthropic Landscape: The State of GeneralOperating Support 2011, National Committee for Responsive Philanthropy(May 2013), http://www.ncrp.org/les/publications/PhilanthropicLandscape-StateofGeneralOperatingSupport2011.pdf.

http://issuu.com/geofunders/docs/2011_geo_field_study_final/5%3Fe%3D3006942/3389112.http://issuu.com/geofunders/docs/2011_geo_field_study_final/5%3Fe%3D3006942/3389112.http://www.effectivephilanthropy.org/blog/2010/12/general-operating-support-remains-the-exceptionhttp://www.effectivephilanthropy.org/blog/2010/12/general-operating-support-remains-the-exceptionhttp://%20http//www.ncrp.org/files/publications/PhilanthropicLandscape-StateofGeneralOperatingSupport2011.pdfhttp://%20http//www.ncrp.org/files/publications/PhilanthropicLandscape-StateofGeneralOperatingSupport2011.pdfhttp://%20http//www.ncrp.org/files/publications/PhilanthropicLandscape-StateofGeneralOperatingSupport2011.pdfhttp://%20http//www.ncrp.org/files/publications/PhilanthropicLandscape-StateofGeneralOperatingSupport2011.pdfhttp://www.effectivephilanthropy.org/blog/2010/12/general-operating-support-remains-the-exceptionhttp://www.effectivephilanthropy.org/blog/2010/12/general-operating-support-remains-the-exceptionhttp://issuu.com/geofunders/docs/2011_geo_field_study_final/5%3Fe%3D3006942/3389112.http://issuu.com/geofunders/docs/2011_geo_field_study_final/5%3Fe%3D3006942/3389112.


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conclusIonThese findings indicate how much opportunity still exists for foundations to help nonprofits

with some of their most difficult and persistent challenges. Past CEP research has shown that,

although foundation staff tend to be interested in providing assistance beyond the grant, they

often do little to understand what their grantees truly need.14 This survey shows the consequenc-

es: nonprofit leaders who do not believe foundations understand their challenges and who are

looking for foundations to do much more to help them in specific areas.

14 Ellie Buteau et al., More Than Money: Making a Difference with Assistance Beyond the Grant, Center for Effective Philanthropy(December2008), http://www.effectivephilanthropy.org/assets/pdfs/CEP_MoreThanMoney.pdf.15 Ellie Buteau, Phil Buchanan, and Timothy Chu, Working with Grantees: The Keys to Success and Five Program Ofcers Who ExemplifyThem, Center for Effective Philanthropy(May 2010), http://www.effectivephilanthropy.org/assets/pdfs/CEP_Working_with_Grantees.pdf.Buteau, Working Well With Grantees: A Guide for Foundation Program Staff.

The ndings also point to an issue that underliesmuch of CEPs research about the work that foun-dations and nonprots do together: the need forfoundations and grantees to form strong relation-

ships.15 It is difcult to imagine that nonprot lead-

ers would be comfortable being open about thevarious challenges their organizations face if theirrelationships with their foundation funders do notfeel strong enough to withstand that honesty.

Clearly, foundations cannot do everything, andit is likely the case that nonprots will always belooking for more help from funders than can be

provided, given limits on staff time and resources.But the data also show that nonprots are not look-

ing for their foundation funders to help them witheverything they nd challenging. They are lookingfor more help to deal with some of their most press-ing challenges.

If foundations depend on their nonprot granteesfor the work they do to achieve their shared goals,then they will benet from working to better under-

stand nonprots challenges and from doing moreto help nonprots address them. While there areexamples of this happening, these ndings indicatethat they remain relatively few and far between. If

foundations and nonprots are to maximize theirchances of success in pursuit of their shared goals,

then these examples must become the rule and notthe exception.

http://www.effectivephilanthropy.org/assets/pdfs/CEP_MoreThanMoney.pdfhttp://www.effectivephilanthropy.org/assets/pdfs/CEP_MoreThanMoney.pdfhttp://www.effectivephilanthropy.org/assets/pdfs/CEP_Working_with_Grantees.pdfhttp://www.effectivephilanthropy.org/assets/pdfs/CEP_Working_with_Grantees.pdfhttp://www.effectivephilanthropy.org/assets/pdfs/CEP_Working_with_Grantees.pdfhttp://www.effectivephilanthropy.org/assets/pdfs/CEP_MoreThanMoney.pdf


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Questions Foundation Staff Should Ask Themselves

> How condent are you and your colleagues that you under-stand the challenges grantees are facing? How do you developthat understanding?

> What are staff members doing to build relationships with grant-ees in which grantees feel they can be open with you abouttheir challenges?

> Have you and your colleagues reected on the

resources, knowledge, or connections thatthe foundation could be, but isnt yet,using to help grantees?

It is difficult to imagine that nonprofitleaders would be comfortable being

open about the various challenges theirorganizations face if their relationships withtheir foundation funders do not feel strong

enough to withstand that honesty.



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APPEndiX: METHOdOLOgY

Data for this report were collected through TheGrantee Voice: Feedback for Foundations, CEPspanel of nonprot leaders.

PANEL

The Grantee Voice panel was established in theinitial months of 2012. Several steps were taken inorder to create this survey panel. First, a databasefrom the National Center for Charitable Statistics(NCCS), which consisted of information from morethan 365,000 registered 501(c)(3) organizations

with a Form 990 led between 2007 and 2010,was used to randomly select nonprots with an-

nual expenses between $100,000 and $100 mil -

lion. To ensure that the randomly selected samplewas representative of this full range of expenses,a stratied sample containing 25 percent of non-

prots from each quartile of this expense rangewas created. The Foundation Centers FoundationDirectory Online was used to determine whetheror not each of the nonprots in this random samplehad received any funding since 2008 from inde-pendent, community, or health-conversion founda-

tions giving at least $5 million annually in grants.Only leaders of nonprots that had received such

funding were invited to join the panel. The stepsin this process were repeated until we reached asample of approximately 1,000 nonprots.

Ultimately, 1,049 nonprot leaders were invited tojoin The Grantee Voice panel, and 300 acceptedthe invitation, resulting in an acceptance rate of29 percent. We statistically tested for, and saw nodifferences between, the annual expenses and is-sue areas of the organizations that did and did not

accept the invitation to join this panel. The geo-

graphical region of the organizations for these twogroups differed only very slightly.16

For this panel, we use the word leader to referto the individual who is responsible for running the

nonprot organization, typically referred to as theexecutive director, president, or CEO. For more in-formation on the panel, please visit CEPs websitewww.effectivephilanthropy.org.

SURVEY SAMPLE

During the course of the 2012 surveying process,two nonprot leaders were removed from the pan-el because they left their respective organizationsafter joining the panel, and one nonprot leader

was removed because he no longer wanted to par-

ticipate. One additional panel member was addedafter a delayed response to our original invitation.As a result, a survey on nonprot challenges was

sent to the 298 nonprot leaders who compriseThe Grantee Voice panel in December 2012. Ul-

timately, two additional nonprot leaders were re-

moved from the panel because they had left theirrespective organizations after the previous survey-ing cycle. The result was a nal panel of 296 non-prot leaders for this survey. Completed surveys

were received from 121 leaders, for a responserate of 41 percent.

Nonprots represented by leaders who respond-

ed to the survey did not differ from nonrespondentorganizations by staff size, program area, age of

nonprot, location, or annual expenses. They alsodid not differ by the proportion of revenues comingin the form of foundation funding. Statistics on staffsize, age, and proportion of revenues coming fromfoundations are based on self-reported data.

METHOD

The survey was elded online. Panel participants

were sent a brief e-mail including a description ofthe survey, a statement of condentiality, and alink to the survey. Four reminder e-mails were sentto panel participants who had not yet respondedto the survey.

16 A chi-square analysis of geographic region was conducted. A statistically signicant difference of a less than small effect size was foundbetween nonprots in the south and northeast regions. Nonprots located in the south were slightly less likely to accept the invitation, andnonprots located in the northeast were slightly more likely to accept the invitation.



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The survey consisted of six questions, many ofwhich contained several items. These questionscovered the degree to which various issues are achallenge to nonprots, nonprots perspectives

on which challenges foundations can help withmost, and nonprots perspectives on foundations

current role in addressing nonprots challenges

in general. (See Tables 3 and 4.) Nonprot lead-ers each were asked to explain, in open-endedcomments, an example of when a foundation wasparticularly helpful in addressing one of their chal-

lenges and one step that foundations could take,beyond additional funding, to help nonprots withtheir greatest challenge.

Table 3. Degree of Nonprofit Challenges

Respondents were asked:Please indicate how challeng-ing each of the following is foryour organization:

Percentage ofrespondents indi-catingThis issue is notrelevant to my

organization

Percentage ofrespondentsindicatingThis issue is notchallenging formy organiza-

tion

Percentage ofrespondentsindicatingThis issue issomewhat chal-lenging for my

organization

Percentage ofrespondentsindicating Thisissue is extremelychallenging for

my organization

Attracting new foundation funders 0% 1% 27% 72%

Securing multi-year funding 3% 2% 27% 68%

Attracting new individual donors 3% 3% 35% 59%

Securing general operating orunrestricted funds

2% 3% 33% 62%

Attracting new government funding 23% 5% 21% 51%

Maintaining funding from our currentfoundation funders

2% 9% 68% 21%

Growing our earned revenue 13% 10% 29% 48%

Being able to inuence public policy 22% 12% 41% 25%

Maintaining our current governmentfunding

23% 13% 39% 25%

Maintaining our earned revenue 15% 13% 52% 20%

Meeting the demand for ourprograms/services

2% 18% 53% 27%

Maintaining funding from our currentindividual donors

7% 18% 55% 20%

Using technology to improve oureffectiveness

1% 22% 59% 18%

Developing effective externalcommunications

1% 22% 62% 15%

Engaging my board of directors

productively

1% 24% 54% 21%

Having sufcient resources andopportunities to develop myleadership skills

2% 25% 52% 21%

Being innovative in our work in orderto improve our effectiveness

1% 29% 61% 9%

Demonstrating my organizationsimpact to potential funders

1% 35% 42% 22%

Developing and training staff 2% 35% 51% 12%



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Table 3. Degree of Nonprofit ChallengesKeeping up with best practices in thearea(s) in which my organization works

3% 38% 50% 9%

Attracting and retaining qualied staff 3% 40% 43% 14%

Developing programmatic strategiesfor my organization

2% 40% 50% 8%

Distinguishing my organizations workfrom the work of similar organizations 3% 41% 44% 12%

Pursuing collaborations orpartnerships with other nonprots

1% 52% 40% 7%

Building the general publics trust inmy organization

1% 57% 40% 2%

Table 4. Desired Help from Foundations with Challenges Not Related to Fundraising

Respondents were asked:Compared to what yourfoundation funders are currentlydoing to help your organizationaddress its challenges, pleaseindicate how much help, eithernancial or non-monetary, youwant from your foundationfunders in addressing each ofthe challenges below:*

Percentage ofrespondentsindicatingMy foundationfunders are notin a position tohelp address thischallenge

Percentage ofrespondentsindicatingMy foundationfunders provideenough helpto address thischallenge

Percentage ofrespondents

indicatingI want a littlemore help frommy foundationfunders toaddress thischallenge

Percentage ofrespondents

indicatingI want a lotmore help frommy foundationfunders toaddress thischallenge

Using technology to improve oureffectiveness

15% 15% 40% 30%

Being able to inuence public policy 17% 17% 36% 30%

Meeting the demand for ourprograms/services

14% 18% 40% 28%

Growing our earned revenue 32% 6% 38% 24%

Having sufcient resources andopportunities to develop myleadership skills

11% 18% 51% 20%

Developing effective externalcommunications

29% 19% 35% 17%

Engaging my board of directorsproductively

31% 20% 32% 17%

Maintaining our earned revenue 26% 12% 46% 16%

Being innovative in our work in orderto improve our effectiveness

21% 23% 43% 13%

Building the general publics trust inmy organization

22% 31% 35% 12%

Keeping up with best practices in thearea(s) in which my organization works

23% 23% 43% 11%

Pursuing collaborations orpartnerships with other nonprots

23% 27% 39% 11%

Developing and training staff 33% 10% 47% 10%

Attracting and retaining qualied staff 44% 17% 30% 9%

Developing programmatic strategiesfor my organization

29% 27% 36% 8%

*Only respondents who reported that a particular issue was challenging were allowed to rate that issue in this table.



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QUANTITATIVE ANALYSES

To analyze the quantitative survey data from non-

prot leaders, descriptive statistics were examinedand a combination of correlations, independentsamples t-tests, paired samples t-tests, chi-square

analyses, and analysis of variance tests were con-ducted. An alpha level of 0.05 was used to de -

termine statistical signicance for all statistical test-

ing conducted for this research. Effect sizes wereexamined for all analyses. Only ndings reachingat least a medium effect size are discussed in this

publication.17

QUALITATIVE ANALYSIS

Two open-ended survey items were asked in the

survey. The questions were as follows: Pleaseprovide a brief example of a time when a foun-

dation funder was particularly helpful to your or-ganization in addressing a challenge you facedand Beyond providing more funding, what is onething your foundation funders could do to help you

confront your organizations greatest challenges?Selected quotations from these questions are in-

cluded in this publication. These quotations wereselected to be representative of the themes seenin the data.

17 See Jacob Cohen, A Power Primer, Psychology Bulletin, 112, no. 1 (1992): 155159.



22/2422 Nonprofit Challenges: What Foundations Can Do

$500,000 or moreRobert Wood Johnson Foundation

$200,000 to $499,999Ford Foundation

The Rockefeller Foundation

W.K. Kellogg Foundation

The William and Flora Hewlett Foundation

$100,000 to $199,999The David and Lucile Packard Foundation

The James Irvine Foundation

Lumina Foundation for Education

The Wallace Foundation

$50,000 to $99,999

The Edna McConnell Clark FoundationGordon and Betty Moore Foundation

The Kresge Foundation

MacArthur Foundation

Stuart Foundation

$20,000 to $49,999Conrad N. Hilton Foundation

The Duke Endowment

Realdania

Rita Allen Foundation

Rockefeller Brothers Fund

Surdna Foundation

Up to $19,999Assisi Foundation of Memphis

California HealthCare Foundation

The Colorado Health FoundationThe Commonwealth Fund

Doris Duke Charitable Foundation

Evelyn and Walter Haas, Jr. Fund

The Gaylord & Dorothy Donnelley Foundation

Goizueta Foundation

Houston Endowment

The Jacob & Valeria Langeloth Foundation

The John A. Hartford Foundation

Lawson Foundation

McKnight Foundation

New Hampshire Charitable Foundation

Nina Mason Pulliam Charitable TrustThe Pittsburgh Foundation

Richard M. Fairbanks Foundation

Toledo Community Foundation

Vermont Community Foundation

Wilburforce Foundation

William Penn Foundation

Individual ContributorsMichael Bailin

Kevin Bolduc

Phil Buchanan

Ellie Buteau

Alexa Cortes Culwell

Alyse dAmico

Bob Eckardt

John Davidson

Kathleen Enright

Phil Giudice

Crystal Hayling

Paul Heggarty

Stephen Heintz

Bob Hughes

Christine James-Brown

Amanda King

Latia King

Jim Knickman

Patricia Kozu

Joseph Lee

Kathryn E. Merchant

Alex Ocasio

Joel Orosz

Nadya K. Shmavonian

Nan Stone

Joyce and Larry Stupski

Valerie Threlfall

Anne Warhover

Cep fundersCEP , v v . F ( v ) v :


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ACknowledgMentsW v v k . S v CEP .

W A D, P K, D M, K R k v . W A C Bk A D v k . T CEP , CEP . T v v v .


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T: (617) 492-0800

F: (617) 492-0888

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Suite 1700

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T: (415) 391-3070

F: (415) 956-9916

www.effectivephilanthropy.org
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Nonprofit Challenges 09-09-13