On December 10th, the Council of New Jersey Grantmakers (CNJG) gathered its members for a day of collaboration towards smarter grantmaking. With presentations by the Nonprofit Finance Fund’s Thomas McLaughlin and Grantmakers for Effective Organizations’ Kathleen Enright, and performances by a strings trio from the New Jersey Symphony Orchestra and improv actress Gerry Martin, participants saw how working together—both with other funders and with grantees—will lead to a stronger impact and greater change.
The day opened with a conversation-based workshop on non-profit mergers and alliances by Thomas McLaughlin, Director of Consulting Services at the Nonprofit Finance Fund. Citing the 70% growth of in the number of charities in New Jersey between 1996 and 2006—all states saw high double digit growth over that period—McLaughlin said this increase is a testament to the vibrancy and growing importance of non-profits. “As the government increasingly retreats from key areas it has historically taken responsibility for in many aspects of our social system, it leaves a vacuum filled increasingly and willingly by the non-profit sector. That is, to me, exciting. We are doing things differently already,” McLaughlin said.
McLaughlin encouraged funders to examine non-profits to seek areas where change may be helpful. In this economy, funders should be careful that the organizations they support do not teeter towards failure. “Non-profits generally have their worst year 2 years after the last recession was officially declared. The current recession was declared in December 2007,” McLaughlin said. A strategic alliance may see these organizations through to more stable times.
Mergers and alliances between non-profits often face strong resistance. While systemic job loss as a result of a merger or alliance is very rare, according to McLaughlin, the larger issue is ego. For big organizations, the board of directors may be afraid of giving up control and feel that the organization will disappear on their watch. For small non-profits, there may be an attitude of “They might be bigger, but we’re better.” Both are based in profound misconceptions of what it means to collaborate. “The fundamental reality is the field is becoming more competitive and the more competitive it becomes, the more collaborative it will become.”
“We don’t have infrastructure for nonprofit collaboration so organizations spin their wheels,” McLaughlin said. Funders can help by permitting and approving collaboration while holding both organizations harmless in their own grants or creating a catalyst or critical juncture fund for organizations facing change.
Following this pre-meeting workshop, grantmakers gather for the official Annual Meeting of the Council and a holiday lunch. The theme of collaboration was clearly front and center throughout the gathering. Kathleen Enright, President and CEO of Grantmakers for Effective Organizations, addressed the issue of collaboration from a different angle. Rather than focusing on how non-profit grantees can collaborate with each other, Enright proposed ways in which funders can collaborate with grantees to help create the “new normal” resulting from the current economic crisis.
Enright described the current model for giving as one that “hamstrings non-profit leaders’ ability to adapt” with only 20% of grants going to operating support, mostly through one-year, low dollar grants with unwieldy reporting requirements. As a result, only 12% of non-profits expect to break even each year, 16% will cover their operating costs, 31% have fewer than 30 days in cash on hand, and another 31% have fewer than 90 days in cash.
“The scale of the problems we endeavor to solve has always outmatched our resources,” said Enright, but funders must think of themselves as collaborative problem solvers. “If we do something powerful together at this moment, we will convince others to come join us,” she said.
Enright listed three barriers to overcome in the quest for the new normal: more operating support, more multi-year support and more productive relationships between funders and non-profits. Enright pointed to the Boston Foundation as exemplary of the changes in thinking that philanthropic organizations may undertake to provide greater support to their grantees, also noting that foundation staffs with non-profit experience often mark a key difference in fostering good funder-grantee relationships. In commenting on New Jersey’s philanthropic community, Enright complemented the state’s funding leaders for their efforts to foster collaboration within the field through CNJG. “Foundations in New Jersey have a real asset in the Council…it is a regional association that “boxes way outside of its weight class,” she said, and will continue to facilitate the transition to a new way of giving.
As described by Board Chair Hans Dekker, CNJG provides a forum for reflection and introspection as funders examine critical questions about themselves during this current economic crisis. In her president’s report, CNJG President Nina Stack quoted the African proverb “If you want to go fast, go alone. If you want to go far, go together.” It’s clear that CNJG and its members are going far and collaboration is taking them there.
CNJG gratefully acknowledges meeting sponsors and supporters: Novartis Pharmaceuticals Corporation, the Prudential Foundation, the Provident Bank Foundation, and Brinton Eaton Wealth Advisors.