January 22, 2020
Common Impact Says Lack of Infrastructure Hampers Nonprofits

June 29, 2010 — Nearly 40% of nonprofit organizations cite an underinvestment in operational infrastructure as the top barrier they face in delivering effective community programs and services, according to a recent study conducted by Common Impact, a Cambridge nonprofit that connects professionals from global companies to high-potential local nonprofits.

According to Common Impact, chronic underinvestment in capacity building continues to hamstring nonprofits. More than 79% of nonprofit respondents reported spending 2% or less of their operating budgets on capacity building.

“Our research underscores both a lack of investment in nonprofit capacity and an enormous opportunity for nonprofits to access skills-based volunteering to help close that gap,” noted Common Impact Vice President Karen Horwitz. “Skills-based volunteering is a way to deepen relationships with existing volunteers, develop on-going mutually beneficial relationships with companies, all while building much-needed infrastructure and not adding strain to budgets. When it’s done right, there’s a measurable payoff for nonprofits, companies and volunteers.”

On average, nonprofit respondents reported spending about 8.7% of their total budget on infrastructure, compared to an average of around 20% at for-profit companies, the study found.

Lack of access to functional area expertise was cited as a major impediment to building capacity, according to Common Impact.

Volunteers make up 50% of the human capital at nonprofits, but most nonprofits have no management structure for overseeing volunteer work, and one-third of volunteers drop out of service every year, creating a significant challenge for nonprofits looking to engage volunteers for long-term program and service support, the study reported.

In addition, the research shows that nonprofits largely underutilize skills-based volunteers as a resource for boosting capacity through the transfer of specific functional area expertise.

The newly released findings stem from the second of three studies that Common Impact conducted with Capital One Financial Corporation. The first phase, completed in July 2008, found that the vast majority of nonprofits significantly underinvest in operational areas such as marketing, human resources and IT.

The report was based on a survey of about 185 nonprofits, interviews with social sector experts, reviews of existing literature, and Common Impact’s analysis of its own outcomes data.

The third phase of research, also underwritten by Capital One, will focus on the extent to which nonprofits can improve performance by investing in key infrastructure. Those findings will be released in 2011.

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