The following is a version of my closing keynote speech for the North Dakota Association of Nonprofit Organizations in Fargo on June 3.
Do you work for a nonprofit? Think for a minute about when your organization was founded. What were some of the circumstances surrounding that event? What were the times like then?
Keep that founding dates in mind; I’ll come back to it.
As readers of this blog probably know, I’m the Communications & Development Associate at the National Council of Nonprofits. And in a recession, this means that for the communications half of my title, I’m constantly getting calls from journalists asking how the economy is affecting nonprofits. And then I see the resulting headlines, which often read “Nonprofits slaughtered by brutal economy,” or something like that.
And on the development side, of course, I’m constantly anxious about fundraising and being able to keep our doors open. So until several months ago, I was in a kind of perfect storm of nail-biting worry.
But then something came back to me from my graduate work in conflict resolution. When talking about negotiation and the ability of people in conflict to follow through on agreements, we invoked the psychologist’s saying that “Past performance is the best predictor of future behavior.”
And remembering that, I was able to relax a little. Because yes, we’re in a recession, and it’s scary, but many of our organizations—and the sector in general—have been through hard times already. And that means that we can do it again.
When I read the headlines bemoaning the plight of the nonprofit sector, I grind my teeth a little. I know optimism rarely makes the front page. But painting nonprofits as victims doesn’t do us any good. Donors don’t respond well to desperation. Clients lose faith in nonprofits’ abilities to meet their needs. And “struggling nonprofit” stories get stale fast.
Struggle isn’t a novelty. Nonprofits wear the badge of more than 400 years of perseverance, back to 1601, when Britain passed the Statute of Charitable Uses, which was also applied to its eventual colonies in the new world. It institutionalized the channeling of money for public good for the first time; until 1601, there had been no standards for donating money to charity, only for passing money on to heirs.
During this 400-year history, nonprofits have been adapting remarkably to challenge and adversity. Instead of all the newspaper headlines reading “Nonprofits struggling in tough times,” they should read, “Nonprofits withstand four centuries of tough times.”
We Eat Recessions for Breakfast
Now think about the year your organization was founded and what the times were like then. Chances are this isn’t your first recession.
- Was your organization founded before 1980? Then you made it through the 1982 recession. So did the Women’s Network of the Red River Valley.
- Was your organization founded before 1970? Then you also made it through the 1973-1975 recession. So did the United Way, which made history during this downturn with the first $1 billion campaign by a single organization.
- Was your organization around before 1920? If so, then in addition to the above two recessions, you also made it through the Great Depression. And that’s kind of a big deal. The North Dakota Community Foundation would know—it survived as well.
- Finally, if your organization was founded before 1890, the same time as many of the Western states, you survived the 1894 recession. So did the Sierra Club. And look where they are now.
The point is, things have never been easy for our sector, and this recession is nothing new. Nonprofits face multiple (obvious) obstacles, including funding, regulation, staff burnout, public understanding of our work, etc.—not to mention the less obvious ones. But despite all these challenges, and even in times of severe hardship, nonprofits continue to flourish.
Why?
The answer, I think, speaks to very heart of our work: improving lives and fostering a vibrant society. No other sector has our ability to adapt and persevere. In the current recession, we’ve seen the private sector collapse—especially banking, the auto industry, and the stock markets. The public sector is more stable, but it’s too unwieldy to respond quickly to needs on the ground.
We, however, have to adapt, to flourish in hardship—otherwise, people, animals, and the environment will suffer, art and culture will wither, and scientific progress will stagnate. And we know this, so we find ways to do our work, with new ideas and with each other.
This is what I wish journalists knew: the real story isn’t when nonprofits struggle. Struggling is our default setting. The story is that we are masters of Sisyphean toil.
Passing the Baton
You might be thinking that of course I can be optimistic about our fate—many of your organizations have been around longer than I’ve been alive. But my optimism is backed up by facts. We can see throughout history that nonprofits can survive the worst conditions our country has endured: economic depression. War. Natural disaster. Terrorist attack. Past performance is the best indicator of future behavior. And our past performance is one of perseverance.
My optimism is also typical of my generation, which feels compelled to serve our communities and our country in a variety of ways. For some, it’s not enough just to volunteer occasionally or donate a few dollars. Contributing our sweat and talent to the nonprofit sector is a perfect outlet for those of us who feel this calling.
This is why I volunteer for nonprofits, and donate to nonprofits, and why I chose to enter the nonprofit workforce: I wanted to make the world a better place, and after five internships in all types and sizes of nonprofits, I saw that this sector is the place to do that most visibly and immediately.
This is not, I think, different from baby boomers, the founders of the modern nonprofit sector, who felt a great calling to address social injustice and social needs. And this is what makes our sector a survivor: the shared devotion to helping others. Founders have it; younger leaders have it. It transcends generation, economy, and technology.
In my opinion, the most important nonprofit collaboration this century—as in all of the past four centuries—will be among established nonprofit leaders and young professionals. This is another reason nonprofits have been able to survive so much hardship over time: when leaders have found themselves ready to pass the baton, there has always been a generation ready to take it.
Still, there has been a lot of talk around this baton-passing over past few years. Studies abound on the pending “leadership gap” in the sector. Bridgespan just reported a nonprofit leadership deficit of 20,000 positions for 2009. That’s 400 empty positions in every state in the union. And with student loan debt rising faster than income, nonprofits are suffering what some have called a brain drain of young talent either leaving the sector after only one or two years or avoiding it completely, often in favor of the public sector or social enterprise.
A lot of ideas are being floated to fix this problem. I’m going to support just one of them right now: in order to make it possible for the next generation of nonprofit talent to actually enter and stay in the sector, overhead funding for nonprofits must improve.
Overhead funding means infrastructure. It means staffing. It means computers and desks and working phones and copy paper. It means that the staff using the computers and making the copies have what they need to do their jobs and do good in the world.
But funders—both individual donors and foundations—tend to shy away from overhead. They prefer program funding so they can feel like their $25 or $250,000 helped feed someone, not make copies. So it’s more or less accepted for nonprofits to fudge the amount of money we request for overhead. Any more than a few percent of our budget looks bad. And when we get the funding, and it’s dedicated to the program, it’s like giving a NASCAR driver a race car but no gas.
When you were a kid, did you want to be a NASCAR driver with no gas?
Young professionals aren’t going to stay in the sector very long once we figure out that, resources or not, the car has to get to the finish line, and now we have to push it there. That’s called burnout. And it will drive young professionals elsewhere.
The campaign for overhead funding isn’t a new idea. Groups such as Grantmakers for Effective Organizations are leading this charge to help nonprofits fully fund the cost of our work, including compensation, occupancy, and other unexciting but necessary overhead expenses. This is a campaign worth joining. Because as many of us know, if it’s not funded, it’s not going to happen. Or it is going to happen, but in the process, it’s going to destroy our will to live.
So if you ever have the chance to participate in a forum or discussion about the need for overhead funding for nonprofits, I recommend you go, speak up, and stay informed and involved in this conversation so we as a sector can make ourselves competitive for the young talent we are about to be so desperately in need of.
A Turning Point?
To have this entire conference dedicated to nonprofit collaboration is incredible. It’s hard for me to say whether it has any historical precedence, since I wasn’t around for much of its 400-year history. But it feels like a turning point now.
Because right now, a conference dedicated to nonprofit collaboration seems to say that not only do we acknowledge the many challenges facing our organizations and communities, but we also believe that the best way to meet these challenges is to seek out one another and work together.
And just as in every minute of our 400-year history, we will not lose sight of our commitment to our clients and missions. Because in times like these, when the private sector stumbles and the public sector lags, our nonprofit sector makes the difference.
It’s what is necessary. It’s what is urgent. And it’s what we are very, very good at.
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This is a guest post from the National Council’s Public Policy Intern, Marissa Gunn.



