THE CHRONICLE OF PHILANTHROPY

Major Gaps in Training and Coaching Hobble Nonprofit Success

September 6, 2019

OPINION: Major Gaps in Training and Coaching Hobble Nonprofit Success

Take away the nation’s roads, bridges, and power grids, and our modern society would quickly become paralyzed. Yet this infrastructure is often taken for granted because it fades into the background.

That’s also true in the nonprofit world, which relies on its own set of structures to ensure that nonprofit organizations are equipped to achieve important missions — such as educating communities serving vulnerable populations, promoting vibrant cultural landscapes, and more. In fact, we’ve often seen that the organizations that achieve the most social good are the ones that possess strong internal management, technological, financial, marketing, fundraising, and evaluation capabilities.  

 

Yet for many nonprofits, getting the funding to build these skills and capabilities can be elusive, if not downright impossible. This is the case even if that nonprofit has many committed supporters who provide unrestricted funding. In fact, the need for more unrestricted dollars to operate effectively is a refrain we hear frequently from organizations supported with grants recommended from our more than 123,000 Fidelity charitable-giving accounts, where about 60 percent of donor-recommended grants are designated for use where the nonprofit needs it most.

 

At the Fidelity Charitable Trustees’ Initiative, we have been seeking ways to close that gap. This grant-making program is entirely separate from the donor-advised fund program for which Fidelity Charitable is best known, and we believe what we have learned is instructive for other donors and foundations to consider.

 

In administering more than $25 million in grants through the Fidelity Charitable Trustees’ Initiative, primarily to nonprofits working in underserved communities, we have historically focused on providing grants that upgrade the leadership, technology, fundraising, and other management abilities of nonprofits, especially small organizations, because they have told us they need that kind of support more than just about anything else.

 

Low Cost or Free

Over time, however, we noticed that the bulk of the training and coaching nonprofits relied on to upgrade their skills came from nonprofit providers that specialize in providing low-cost or free services to nonprofits in need. But we noticed that support for those organizations is relatively meager, despite the essential role they play in helping nonprofits become strong and effective.

 

We wanted to know whether our observation was valid and whether a paucity of funding was hobbling the ability of highly skilled organizations to boost the capabilities of the nonprofits so many communities depend upon. We interviewed 25 nonprofit and philanthropic leaders representing more than 30,000 organizations to find more answers.

Those leaders not only affirmed what we had observed; they saw it as a major gap that grant makers and big donors can and should help fill because the needs of these nonprofits are far more than one, two, or even a handful of philanthropies can provide. “Solving the complex problems facing us,” one nonprofit director noted, “is going to require that all sectors work collaboratively to resolve them. To do that, they need to have strong infrastructures that provide the kind of field-wide data, policy analysis, and management support that drives high performance.”

Their perceptions are substantiated by data. According to a recent study by the Foundation Center, U.S. foundation support for so-called nonprofit infrastructure groups accounted for less than 1 percent of total giving in the most recent years for which data is available. While overall giving by U.S. foundations grew 66 percent during these years, giving to organizations that support the entire nonprofit world grew just 25 percent. 

 

Moreover, grant makers that support infrastructure continue to be in short supply. While 881 foundations provided at least $10,000 in support for infrastructure organizations from 2004 through 2015, the top 20 foundations of that set accounted for 54 percent of all funding received by infrastructure organizations. Three foundations — Ford, Gates, and Kellogg — accounted for 24 percent of all infrastructure funding during those 12 years.

 

Greatest Needs

We also asked leaders what they saw as the greatest needs. Six areas topped the list: policy advocacy, especially at the state and local levels; governance; technology; financial management, planning, and literacy; equity and diversity; and professional development, particularly for young and midlevel staff. There was also a desire for more rigorously collected data about the nonprofit world’s economic contributions and the regulations and policies affecting them. Many also wanted to know more about the role of charitable donations, especially from individuals, and sounder analyses that allow leaders to make sensible strategic choices.

 

Evaluation, especially rigorous and independent assessments that go beyond simple facts like how many meals were served or rivers protected or how many students had graduated was another major need. Many of the leaders we interviewed underscored that nonprofits’ work can’t be easily distilled into an Excel spreadsheet or understood in the formats businesses use to evaluate their performance. Nonprofit leaders felt that most grant makers need a better understanding of “the nuances and challenges of measuring what nonprofits do, as well as their impact.”

 

Based on this feedback, which is summarized in more detail in this report, our board has decided to shift the trustees’ fund grant-making strategy to focus exclusively on strengthening the nonprofit world’s infrastructure. We define this as the shared resources, information, networks, research, and advocacy that all donors and nonprofits need to achieve their intended impact.

 

Though such investments may not always be flashy or glamorous, they’re critical to ensuring that nonprofits have a strong foundation for their work. Our conversations with nonprofit leaders revealed the many gaps to be filled to maintain a strong and sustainable social sector — one that operates in a vital partnership with the private and public sectors. It’s now up to donors to help nonprofits upgrade their technology, financial, and leadership capabilities so they can play this essential role.

 

The good news is that investing in organizations that help nonprofits do a better job leading, managing, and fundraising is one of the most cost-effective ways donors can have broad impact. We’ve just announced our first cycle of grants since implementing our new strategy. We hope other grant makers will put more of their resources into these and other essential organizations as well.

THANK YOU TO THE CHRONICLE OF PHILANTHROPY

Pamela Norley is president of Fidelity Charitable, a nonprofit that provides donor-advised funds. Catherine D’Amato is  CEO of the Greater Boston Food Bank and a member of the Fidelity Charitable Board of Trustees, chairing the committee that oversees the Fidelity Charitable Trustees’ Initiative. COPYRIGHT OF THE CHRONICLE OF PHILANTHROPY

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