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Summary of AGM Nonprofit Partners Meeting - September 26, 2008

Letter to Members Regarding Summary of Results
NOTE – this is a slightly modified version of a letter sent to all AGM members in October, 2008.

Dear AGM Members:
We are facing unusually challenging times. There is an unprecedented confluence of events that will put increased pressure on our sector and work – the threat of 9C cut* in state grants and contracts, the plunging stock market and its impact on foundation endowments and nonprofit assets, the credit crunch, the crisis facing Wall Street institutions and probable decreases in corporate contributions.

The concern across the nonprofit sector about the impact of these difficulties is clear and growing. In looking at the circumstances in which we find ourselves, Associated Grant Makers is aware, as never before, of the crucial role we can play in bridging the grant seeking and grant making communities. We are looking for the best ways of reaching out to listen to and communicate across both of these parts of the charitable sector, and are working on a series of programs that will help both grant makers and grant seekers to discuss their concerns and work on ways of communicating and collaborating.

On Friday, September 26, we had a great opportunity to listen to the grant seeking community on your behalf. At our annual Nonprofit Partners Meeting lunch session, we asked the participants to discuss and then answer, in writing, three questions: 1) What one thing is worrying you (as an organization) the most? 2) What is the one thing you want funders to know? 3) What is the thing that is giving you hope for the future?

We collected responses from approximately 65 nonprofit executive directors, program staff and development staff. This memo summarizes the key themes and concerns that emerged. If you are interested, we can also send you the full 10-page document of all the individual responses.

We hope you will find the information in this memo useful and a way for you, as funders, to think about the concerns in the nonprofit sector. We believe this is an opportune moment for grant makers to convene and talk about how the foundation community might respond and collaborate. Please let us know your questions. AGM looks forward to supporting its members in whatever ways possible during a challenging time for all nonprofit organizations.

Sincerely yours,
Ron Ancrum, President
Miki C. Akimoto, Vice President

Summary of Responses from the AGM Nonprofit Partners Meeting, September 26, 2008

What is worrying you most?
In asking this question of the Partners Meeting Participants, we framed it in terms of what challenges or worries the organizations were facing, as opposed to personal or individual worries. The answers mostly fell into a few broad categories which reflected a) a not-unexpected focus on whether or not organizations could survive the coming economic turmoil, b) worries about possible reductions in grant funding, and c) the direction of the economy in general.

By far the largest group of responses – nearly one-third of all responses – reflected concern about the survival of nonprofit organizations. Specific worries included how to meet what were expected to be rising demands for service and rising costs of operation (e.g. fuel) while dealing with flat or reduced funding . There were also several responses that spoke to a worry that nonprofits would have to lay off staff, further eroding the ability to provide quality and necessary services. Typical statements in this category included: Operating/salaries – can’t provide programs or services if we don’t have field staff. And: Shutting programs down/laying off staff due to lack of resources. This could be perceived as a weakness/fault of my organization. Also it would look bad in the community when a program disappears after many years.

Another significant set of responses focused on fears about funders reducing funding and grants. A typical response in this area is: Foundations/donors resisting the urge to give. A few responses in this category expressed a fear that funders will direct (or redirect) funds in a way that will hurt specific groups. For example: All grant $ goes into basic services like housing, food, heat, etc. Need advocacy.
Even as some organizations worried about cuts, others worried about the ability to grow or meet planned expansion goals during tight funding times. And in line with that group of responses, was a set of comments that spoke to generalized anxiety about the overall economic picture, not just the effects in the nonprofit sector. For example: Worry about loss of jobs at all levels and sectors; and Recession is possibly long-term and deeper (as in depression) then we are being told.

In addition to the groupings of comments described above, there were a wide range of other concerns expressed, including:

What is one thing you want funders to know?
Here the general tone of anxiety was also threaded through with a degree of frustration. It is important to recognize the context of these comments. On Friday, September 26, the first attempt at a Wall Street bailout had failed, at the same time that conference participants had just had a presentation about the possibility in cuts of state-funded programs (under 9C) due to expected revenue shortfalls at the Massachusetts State government level. There was, on that day, a general atmosphere of uncertainty. At the same time, we believe that the sometimes seemingly harsh words from the nonprofits who participated in our exercise provide some valuable voices that funders should hear and reflect on as funders think about how they will want to address the needs of our communities.

There was a slightly broader degree of diffusion in the responses to the question “What is one thing you want funders to know?” However, there were still distinct groups of responses that emerged, led by a set of responses that reflected the importance, to nonprofits, of both long-term relationships between funders and grantees, and the funding of operational support.

Of the 60+ responses received, 14 focused on the need for multiyear and/or operational support. This is a long-standing request from the nonprofit community to funders, but seems to be of even greater importance now. It would appear that nonprofits are looking to funders to provide a measure of stability in uncertain times. Both multiyear funding and (increased) operational support would help improve an organization’s stability over the longer term. For example: In times like this, multi-year grant commitments are especially useful – they provide stability and allow us to focus resources.

An equal number of responses focused on “telling funders” about how crucial and central nonprofits’ work is to their communities. So, for example: Importance of our program – impact – how far their dollars go and Want funders to know services provided are critical to the success of our economy, city and its populations. It was striking to us that nonprofits felt a need to strongly remind funders that the nonprofits’ work is important and beneficial – something you might have expected funders to be able to take for granted.

Related to this was another group of responses that seemed aimed at pointing out to funders that nonprofits are already working hard and efficiently and that there is “no fat” left to be trimmed from already lean operations. Representative comments include: Already working too hard. No fat. New programs are not appropriate.
There were also voices calling for greater collaboration across many fields:

Where do you see hope in the times ahead?
The nonprofit sector has a long history of resiliency and creativity in tough times. To capture that spirit and the innovation we know is resident in the Massachusetts nonprofit community, we asked participants to conclude by telling us where they saw hope in the nonprofit sector in the coming times. Not surprisingly, a number of folks cited the general resiliency and passion of the sector. However, even more people focused on either existing or new donors, or collaboration either within the nonprofit community or across the nonprofit and other sectors.

Those who saw hope from their existing and new donors talked about such things as:

Others saw great promise in the coming election and a new administration. Finally, one person remarked: As is historically known, we will rally and things will turn around. We need to support each other in the interim.

Associated Grant Makers stands ready to help support all parts of the charitable sector as we make our way through turbulent times. We believe there is great strength in dialog –both funder-to-funder, and between funders and grantees.

We intend to start with a funders-only conversation to provide space for foundations and corporate giving programs to reflect on the coming times, and how the funder community can keep in touch with each other and think collectively about its response. Please let us know if you would like to participate in the Funders conversation on November 6, 2008, or if you would like us to send you the document with the unedited responses.