It has been a special privilege to work in the nonprofit sector for more than 25 years, the past 17 years here in Northern Colorado. As I reflect on those years, I am particularly hopeful that donors, board members, and nonprofit executives will consider three things as they think strategically about the future.
First, nonprofits generally lack the scale necessary to efficiently attack big problems. Unlike the for-profit sector, where mergers and acquisitions have dominated the landscape and the cards often seem unfairly stacked in favor of the largest corporations (many of which have been big winners during the pandemic), the nonprofit sector has seen a proliferation of small organizations with limited capabilities.
Recently, I was part of a discussion about public lands in our region that relates to the issue of scale. Major concerns were expressed about overuse, lack of enforcement, invasive weeds overtaking native vegetation, unauthorized roads, and massive burn areas scorched by unnaturally hot fires — a result of more than 100 years of fire suppression. While we have many excellent conservation and environmental organizations in the region, there is not one that possesses the scale and resources to stand out from the crowd and lead such a complex effort. My hope is that we will see the emergence of “flagship nonprofits” — perhaps as the result of mergers — with the ability to champion collaborative efforts around major issues impacting the environment, health and human services, education, and arts and culture.
How a business manages its inventory can have a tremendous impact on the financial health of the company. Managed properly, inventory can be a great source of increased margins, higher revenue, or a combination of the two.
Second, it has often been said that nonprofits are forced to play by different rules than for-profits. In reality, “nonprofit” is simply a tax status. The term has little to do with strategy. Yet, most nonprofits embrace a very conservative playbook. They are often extremely sensitive to risk, decline to invest in marketing efforts, and tend to compensate talent in a very modest manner. And when tough decisions are required, the “tyranny of the minority” can be a major obstacle. How many for-profit organizations would prosper with a similar mindset? Although a “triple bottom line” approach — social, environmental, and financial — is gaining ground in the for-profit sector, the profit motive still guides decisions about risk taking, marketing budgets, and compensation of staff. The only comparable motive in the nonprofit sector is passion. Organizations driven by a deep passion to address important issues will be far less conservative in the strategies they embrace.
And finally, let’s talk about politics. I have friends and family members with whom I disagree on just about everything. My life is richer for it. Nonprofits are uniquely positioned to bring people together, but we are seeing more and more unfortunate examples where they are doing just the opposite. Now, more than ever, we need nonprofit organizations with the courage to inspire and unify a fractured culture. Pushing political agendas only serves to undermine the most fundamental value of the nonprofit sector — community building.
Not too long ago, I was on a conference call with foundation CEOs from across the state where we discussed the issue of defunding nonprofit organizations labeled as “hate groups.” It is disturbing to note that this label is increasingly applied to Christian humanitarian organizations, such as Samaritan’s Purse — an organization that assisted hundreds of area homeowners during the 2013 Northern Colorado floods. This reflects the growing inability of our society to see the immeasurable value in civil discourse between diverse groups. Yet, this provides an enormous opportunity for nonprofits to step up and serve as peacemakers and community builders. The goal is not to get people to agree, but to encourage all of us to see each other as friends and neighbors who have much in common despite our dramatically different perspectives. For this to happen, nonprofit boards need to reflect the communities they serve. Just as we seek out gender and racial diversity, nonprofit boards should actively pursue diversity of thought and recruit new board members from across the political spectrum.
Fortunately, I can point to dozens of local nonprofits in Northern Colorado that truly are nonpartisan, that approach their missions with entrepreneurial zeal, and that are working aggressively to gain the scale they need to make a greater impact. With all its imperfections, the nonprofit sector continues to be an irreplaceable part of the social infrastructure that holds our nation together. Donors, board members, and nonprofit executives have the power to maintain this tradition and a moral imperative to do so.
Ray Caraway has served as the CEO of four foundations in four different states. After 17 years with the Community Foundation of Northern Colorado, he recently accepted the position of CEO with the JF Maddox Foundation, a private foundation in New Mexico.