Too much of a good thing?

When it comes to strengthening nonprofits, is there power in numbers?

There are 33,000 registered nonprofits in Massachusetts.  Some leaders and experts feel that is way too many competing for funding, and efforts should be made to eliminate duplication of services and encourage mergers.  Others argue that focusing on “what’s the right number” is a red herring for what the real focus should be – whether nonprofits are being resourced effectively and whether there is enough collaboration in the sector to make a significant, positive impact on complex, entrenched issues facing our region.

Rick Jakious, former chief executive officer of the Massachusetts Nonprofit Network (MNN) and current district director for U.S. Representative Seth Moulton, recently raised the topic at a meeting of Board chairs of United Way partner agencies and had this to say in the Boston Globe:

“The frequent implication that nonprofits should dissolve when faced with a little competition…attacks the problem from the wrong side of the equation. Nonprofits, just like private-sector businesses, succeed based on their ability to compete for and secure resources. It is the funders and philanthropists who bear the responsibility of establishing financial incentives that allow great ideas to thrive and bad ones to fail.”

Current MNN Board Chairman David Shapiro, President and CEO of MENTOR: The National Mentoring Partnership and MNN CEO Jim Klocke recently weighed in on the topic of “too many nonprofits” too, stating the sector needs to focus on innovation, resources and doing more of what works.

Because of United Way’s role in the community, we are in a unique position to appreciate both the birds-eye view and the ground-level challenges of the non-profit sector.  And we know that when problems are addressed strategically, we can achieve a lot more than any of us could alone.

Funding what works

United Way funds over 200 partner organizations in the region each year.  The organizations have been carefully selected, vetted not just on their financials and board governance but also on whether they are doing what works.

“Having solid 990s and strong leadership gets you to the table, but it does not guarantee funding,” says Jeffery Hayward, chief of external affairs at United Way of Massachusetts Bay and Merrimack Valley.  “Our staff experts and volunteers from the business, academic, government and nonprofit sectors take a hard look at what strategies our partners are using to address the complex issues we are focused on, and whether those strategies are having the greatest impact on the children, families and communities we serve.”

Once the partner organizations are approved for funding, United Way works side-by-side to measure their progress on agreed-upon objectives and provide them with extensive support.

Hayward cites United Way’s focus on funding organizations serving the homeless through a “Housing First” approach as an example of both funding what works and helping organizations achieve their community goals.

“When we decided to only fund organizations that embrace the Housing First philosophy of getting the homeless into housing first and then providing support services verses extensive shelter stays, we worked closely with a cohort of 13 organizations to help them make that service delivery shift.”

After three years, 77% of the 1,200 individuals housed through this effort were still stable.

Resources and revenue the number one challenge

Nonprofits we work with cite revenue and resources as their number one challenge.  It’s one of the reasons United Way has continued its long-standing tradition of strengthening nonprofit partners with funding that is unrestricted, so organizations can apply the funds where they are needed most.

It’s also why United Way has a strong voice and presence on Beacon Hill.

“We recognize that challenges like ending family homelessness and closing the educational achievement gap are going to need more dollars than United Way alone can provide,” Hayward says.

Last year, this policy work helped to leverage $95 million in state funding for the issues we are working on this year, from increased state funding for early educators, workforce development programs and capital improvements to early education facilities, to rental assistance to prevent homelessness and expansion of the successful Earned Income Tax Credit.

Organizations need more than funding

Dollars are always needed, but our nonprofit partners also frequently cite a need for skill-based volunteers and professional development opportunities for strengthening nonprofit staff. Fortunately, local corporations have stepped up to the plate time and time again with skill-based volunteers. In the last year, 324 United Way volunteers have engaged in skills-based volunteer projects – donating 1,768 hours to our partner agencies, valuing a total of $71,133 to the organizations served.

For example, EY employees recently volunteered financial coaching services at our Quincy Financial REACH Center, and employees from the Federal Reserve Bank of Boston will volunteer this week with Asian American Civic Association and College Bound to offer mock interviews and financial coaching for youth.

For the past two years, State Street and United Way have partnered to provide technical assistance to 16 agencies that help economically disadvantaged youth and adults acquire skills and credentials they need to succeed in school and employment. The goal of the partnership is to improve these agencies’ ability to monitor performance, to use data to inform strategy, and, ultimately, to achieve positive results for local youth and adults.

Citizens Bank and United Way have also partnered over the past two years to provide a series of comprehensive professional development training to the front line staff of organizations that provide financial coaching services. Staff from more than 55 organizations attended the Financial Empowerment Leadership Institute this past year.

Innovation doesn’t have to come from start-ups

That was reaffirmed last month when we announced the winners of our first IF Challenge, a prize competition sponsored by United Way and the Boston College School of Social Work to uncover feasible, effective solutions to end family homelessness in Massachusetts.

“We believe that there is great innovation within the existing nonprofit sector, and with the right kind of stimulation and support that great work can be taken to scale in our region,” said Michael K. Durkin, addressing the winners at a recent breakfast hosted by Boston College and United Way.

Winning solutions include developing a smart phone app to help families search for housing and other resources, a campaign to expand the Earned Income Tax Credit to help low-income working families pay for housing costs and funds to take a successful eviction-prevention partnership in the City of Boston to a larger scale.

United Way deeply believes in harnessing the power of nonprofits, businesses and government working together to create lasting change. It is this approach that will solve our community’s challenges.

When problems are addressed strategically, with the right mix of innovation, resources and best practices, there IS strength in numbers.