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Thursday, January 18, 2018

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Overcoming Our Challenges, Part Two: The Sector is Changing
Mathew Downey, via the Johnson Center for Philanthropy

March, 2013

Part 2 of 4: The Sector is Changing

In last week’s blog, I highlighted some of the challenges facing nonprofit leaders, such as the mismatch among resources and needs and expectations and the lingering impacts of the recession on giving. This week, I’ll discuss some of the ways the nonprofit sector is changing.

Donors are Changing

First of all, donors are changing their approach to giving and their expectations associated with giving are changing. The easiest way I can explain this is that donors are raising their expectations for the potential return on their philanthropic investments. As our younger generations grow older we will gradually see their interest in philanthropy increase. The millennial generation has grown up with community service as core to their upbringing. When I was a child growing up in the 70s and 80s, our idea of extra-curricular activities was very self-focused. Participation in academic clubs, arts activities and sports were celebrated. We understood that these activities taught us skills that we would later use in our careers.

Today, our younger generations are growing up with community service and service learning as central to their core curriculum. They learn about the world from doing and helping. They are taught that if they want to change the world, they can. The result of this will be donors and volunteers who demand a higher level of engagement with our organizations than merely a cash relationship or stuffing envelopes. They will expect to be involved not only financially, but also by helping us develop and execute strategies.

We are already seeing this change occur. Millennials are engaging with nonprofit organizations in a greater variety of ways than their predecessors. This shift is very positive, but it will require that we configure our organizations in such a way that these new expectations can be met. The introduction of the Internet and social media has changed communication channels and access to information. Millennials do not know a world without rapid access to information.

Branding is now more important

OK, I’m totally going to date myself, but when I started my career the Internet barely existed. Few of us had websites. I did my fundraising prospect research at the library. Back then we could get away with only forming close relationships with donors and maintaining a strong frequency of communication with stakeholders. Now I’m not suggesting this is no longer important in fundraising. The importance of relationship-based fundraising has not changed and will never change. People will always give to people they know and trust. However, what has changed is now more than ever we have to think about our organization’s brand. We have to make opportunities for engagement easy and readily available.

Lately, I have been talking about how social media has introduced “Philanthropic Distractions.” Even your best donors can be easily lured away by an organization halfway across the world. On Facebook people’s “friends” are constantly introducing them to other organizations, other causes and easier opportunities to engage. If we are not present and effectively utilizing multiple forms of communication and engagement in clear and concise ways, we will lose out. In other words, in order to survive, your organization must become one of those “Philanthropic Distractions.”

The Sector is Becoming More Professional

Another important change is the increasing professionalization of our sector. I feel as though I represent a new type of nonprofit professional, as I outlined earlier. Our nonprofit sector is literally a century or so behind our other two sectors, public and for-profit. Individuals have been studying business and public administration for quite some time. At many universities, including my two alma matters, Butler University and Grand Valley State University, the largest investments are made in the Business College. It is really only in the past 30 years have individuals chosen to attend higher education in the pursuit of a nonprofit career. The majority of research on our sector has only been conducted over the past 30 years or so. To say that we are behind in researching and developing effective models for nonprofit administration would be an understatement.

Today at GVSU, there are about 250 students studying nonprofit management at the undergraduate level and roughly 150 pursuing Master’s degrees. At Butler University, the nonprofit arts administration program I attended has more than 100 undergraduate majors enrolled. This is compared to 16 students when I was there. This trend now appears in universities across the country. This is positive and offers great hope for the sector. However, in order for us to realize this benefit, senior leadership will need to embrace these younger minds and cultivate their involvement.

At the same time, our sector has become much better at offering helpful resources for nonprofit leaders to continue their professional development well into their careers. When I started my career at the Gilmore Festival, I was building a new fund development program that raised $1.3 million and managing an 800 member volunteer corps. I was only 23 years old. There was no place to turn to for help. Local resources such as the Great Lakes Center for Youth Development and conferences such as this one offer great hope for building a stronger, more effective sector.

However, as the sector gets more professional, it exposes a deeper, more challenging issue. What we will have to deal with in the future is our reluctance – our inability — to adequately compensate nonprofit professionals. In order to pursue a career in the nonprofit sector, our leaders must wrestle with their love of community service and the need to earn a living. I am deeply troubled by the fact that many of our leaders earn salaries that place them just above the poverty line. Even calling what these dedicated professionals earn a “salary” seems a stretch. I have no solutions to this problem, but if we are to develop an effective and relevant nonprofit sector, this is an issue that we will have to face head on.

Next week, I’ll talk about how to build strong organizations that can weather the challenges and changes.

Established in 1992 with support from the W.K. Kellogg Foundation, the Dorothy A. Johnson Center for Philanthropy promotes effective philanthropy, community improvement, and excellence in nonprofit leadership through teaching, research, and service. The Johnson Center is recognized for its applied research and professional development benefiting practitioners and nonprofits through its Community Research Institute, Frey Foundation Chair for Family Foundations and Philanthropy, The Foundation Review, The Grantmaking School, Johnson Center Philanthropy Archives and Library, and Nonprofit Services

Grand Valley State University is a four-year public university. It attracts more than 24,500 students with high quality programs and state-of-the-art facilities. Grand Valley is a comprehensive university serving students from all 83 Michigan counties and dozens of other states and foreign countries. Grand Valley offers 81 undergraduate and 29 graduate degree programs from campuses in Allendale, Grand Rapids and Holland, and from regional centers in Muskegon and Traverse City. The university is dedicated to individual student achievement, going beyond the traditional classroom experience, with research opportunities and business partnerships. Grand Valley employs more than 1,900 people and is committed to providing a fair and equitable environment for the continued success of all.


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