August 24, 2019
 
Funders Outline Challenges for Mass. Nonprofits in 2014

December 31, 2013 — Competition for funding in the face of ever increasing demand for services and reduced government support will pre-occupy much of the Massachusetts nonprofit sector in 2014, putting special strains on smaller organizations, but fundraising prospects are positive, according to a number of community-based funders.

The funders shared their views with www.massnonprofit.org on the biggest issues the sector will face over the next year, as well as what the fundraising environment is likely to be.

“Continued uncertainty in government funding will make it very difficult for smaller nonprofits to plan generally, and to plan long-term projects," said Katie Allan Zobel, president and CEO of the Community Foundation of Western Massachusetts, based in Springfield.

The decline in government funding over the last five to 10 years, she said, has forced more nonprofits to focus on fundraising, as opposed to putting their energy into the work they’re trying to do.

Craig Dutra, president of the Community Foundation of Southeastern Massachusetts in New Bedford, noted, “Small and md sized organizations are still struggling to maintain viability. Several in our region are talking about merging to streamline opportunities. More are looking for support from funders for capacity building, due to stagnating government support. Philanthropy is growing but not at the rate at which demand is increasing."

Compared to previous years, he said, his foundation continues to receive a record number of applications for funding.

Kristin O'Malley, executive director of the Cape Cod Foundation, based in Yarmouthport, said, “As funders, we see a lot of similar requests for funding from different organizations, and are trying to examine how we can fully define and support collaboration, or a true integration of resources, among existing organizations to increase our impact as funders, and their impact to accomplish their work."

Striking a positive note, she said, “More and more we are seeing organizations developing unique programs that help to generate revenue that goes back to support the mission of the organization, and increasing the organization’s sustainability."

Like her colleagues, O’Malley recognized that smaller nonprofits don’t have sufficient dedicated staff who can focus on development, marketing, and outreach. Although more of them are relying on volunteers to support these efforts, but many smaller organizations lack staff to manage volunteers, she said.

Indeed, larger nonprofits, with more staff, may be edging out smaller ones in the competition for winning attention.

Judy Salerno, executive director of the Foundation for MetroWest in Framingham, observed, “The amount of money that larger nonprofits are spending on marketing and development are making it increasingly difficult for small nonprofits to compete for visibility and charitable dollars."

Sandi Clement McKinley, director of advisory services, for the Nonprofit Finance Fund, New England Region, based in Boston, said that late reimbursements from government agencies that are still funding nonprofits are putting additional financial strains on nonprofits by creating working capital issues.

“All that distracts organizations by forcing them to do more with less in an environment that is increasingly focused on outcomes and impact," she said. “Some organizations are throwing up their hands. They can’t come up with a theory of change while trying to meet demand."

Fundraising in 2014

Despite the operating challenges nonprofits face, there are opportunities to make progress raising funds over the next year. This is what the funders had to say.

McKinley: “We’re seeing pockets of the economy getting stronger, seeing more hiring happen, which is a good indicator. This will help philanthropy replace some of the lost government sources. It will be interesting to see how the arts recover, since they get more than 80% of their income from non-government sources."

Dutra: “We’re reasonably optimistic. For our region, during the last three years, we’ve seen strong market returns in assets of foundations. We’re also seeing unprecedented level of philanthropy among corporations. In addition, there is real interest among nonprofits to create networks and collaborative relationships to make a greater impact by being more efficient and collaborative."

Zobel: “Nonprofits are coming to us for capacity building advice, especially on how to find funding. This isn’t new, but we’re seeing more of this."

O’Malley: “More and more, we are seeing donors wanting to be more engaged in their giving and to know the impacts of their gifts. It is important to know your donors and to take care of them. Organizations need to stay relevant and adapt to become more efficient in their operations and more effective in attracting and retaining donors."

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