September 14, 2014
   
Nonprofit Leaders Say Mission Focus, Data Are Key to Funding

October 4, 2012 — Focusing intently on one's mission and then developing quantitative assessments of outcomes related to that mission will be key to obtaining financing in a volatile funding environment, particularly among human services agencies, nonprofit leaders said at a panel convened in Boston yesterday.

“It’s important to ask yourself the so-what questions,” said Shawn Bohen, national strategic growth director at Year Up, a Boston-based nonprofit that helps urban youth reach their full potential. “They are: What are we doing? Are we making a difference? How do we know?”

She said that answering the questions helped set the stage for Year Up to raise $18 million in 2007 and launch a new five-year strategy this year which calls for raising another $55 million in what she described as “growth capital.”

Bohen joined others in a panel hosted by the Bank of America Charitable Foundation and the Nonprofit Finance Fund (NFF), a nonprofit lender to nonprofits, that examined innovative approaches to philanthropy.

The need for adopting a “business as unusual” approach is especially dire, said NFF Vice President Rebecca Thomas, as demand for services among human services providers continues to outpace funding growth and many nonprofits are operating on thin margins.

Molly Baldwin, executive director of Roca, a nonprofit based in Springfield and Chelsea that works to move youth out of violence and poverty, said that her agency’s participation in an innovative social financing initiative represents a significant step forward in enabling Roca to meet its mission, noting, “If we can’t do our mission—keeping young people out of jail—we should close our doors.”

The new financing program—also known as pay-for-success—allows the state government to partner with service providers and, if necessary, private foundations or other investors willing to cover the upfront costs and assume performance risk to expand promising programs, while assuring that taxpayers will not pay for the programs unless they demonstrate success in achieving the desired outcomes.

Stopping non-core services also helps nonprofits stay mission focused, said Lyndia Downie, president and executive director of Pine Street Inn, Boston’s leading agency that provides emergency shelter and services aimed at ending homelessness.

After receiving an unplanned $1 million from the state from a lawsuit settlement, Pine Street Inn hired a consultant to examine every program, who determined that five percent of its guests were taking up 53% of its bed-nights.

“We shifted our focus on the five percent and stopped being all things to all people,” Downie said. As a result, Pine Street shut down several “sacred cows,” and now outsources nursing services instead of providing them and buys clothing from Goodwill instead of collecting and distributing clothes.

As a result, Downie said, her organization, which devoted 70% of its services to shelter and 30% to housing, has moved to a 50-50 split today and soon expects to be 30% shelter and 70% housing, in line with its core mission and goals. Earlier this year, Pine Street merged with hopeFound, which provided similar services, because, Downie said, “it made sense, and not because hopeFound was in financial crisis.”

Bohen echoed Downie’s admonition to eliminate non-core activities: “You have to be comfortable with learning in public and be willing to cut things that are not working.”

Social enterprises—real businesses that sell goods and services to people that want to buy them—also provide a way to increase and stabilize funding, said Esther Kim, managing director of REDF, a San Francisco nonprofit venture philanthropy funder.

“Social enterprise is hard and not for everyone,” she said. “You need a base of funding and people who can provide expertise, and customers. The right management and a business plan are critical.”

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