One Year Reflections
December 2016

 

It has been a full year since the Nonprofit Repositioning Fund’s launch in October 2015.  In that year we have learned a great deal about this work, including how much more we need to learn about this work!  In the spirit of less is more, some of the key lessons learned follow.


The demand and interest in the Fund in its first year exceeded our expectations.
  While our funders had been rightfully concerned that organizations would not step forward for fear of revealing their plans to existing funders who sit on our board, we have had a steady stream of inquiries to the Fund.


This work is part of a movement of similar projects around the country.
We have been enriched by the open and generous exchange afforded by a movement of similar funds around the country, and have consulted informally to at least four new projects that are emerging. We have even had inquiries from funders and researchers internationally, including the Big Lottery in the UK, and INSEAD business school in Paris (it would be nice to attribute this to our crack search engine optimization strategy, but….).


Outreach efforts are well received.
Our outreach activities across the five-county region and spanning multiple fields have been well attended and always dynamic in Q & A. In almost every room we’ve been in, someone has volunteered their own experience with formal collaboration, and lamented that such a fund wasn’t available when they were navigating their respective organizational processes.


These types of collaborations take time.
They are not for the faint-hearted.  We supported one collaboration that ran the gauntlet from early conversations through an Exploratory and now Implementation grant:  Japan America Society of Greater Philadelphia, which has merged with Friends of the Japanese House and Garden (‘Shofuso’ house).  Kim Andrews, the dogged ED leader of this newly merged entity was very candid in detailing just how challenging the past year was, and estimates that it required on average one day/week of her time.


Not all who are interested are ready.
Inquiries in the first year that resulted in a formal write-up as part of our ongoing pipeline numbered 77. A much greater – though undocumented – number of inquiries were received, but did not fall within the potential guidelines of the Fund.  Most of the organizations that did not make our pipeline fell into three key categories:

  • A single organization was inquiring, but had not yet identified a partner
  • A partner/partners had been identified, but the concept was too nascent and required more programmatic support than the organizational due diligence that the Fund provides
  • Sadly, too many organizations were too fragile to compete for funds. Our mantra has been “Two weak organizations does not make one strong organization”, which is a tough message to absorb, but all too common today

These are not ‘sexy’ grants, as John MacIntosh, my colleague at the New York Merger, Acquisition and Collaboration Fund (NYMAC) says, but there are few instances where a small investment can leverage greater change (our 8 Exploratory grants have averaged $25,688, and our 4 Implementation grants have averaged $41,250).


The three critical triggers for strategic collaboration.
Our experience in this region mirrors what our board member Lois Savage, President of the Lodestar Foundation in Arizona reports from their almost two decades in this endeavor, that there are three critical triggers for strategic collaboration:

  • Leadership change (this has been the case in 7 of the 11 collaborations we have supported);
  • Regulatory change (this has been particularly acute in our local human services community); and
  • Loss of a significant funding stream (anyone leading a nonprofit in this region knows all too well of the vagaries and challenges of obtaining predictable and adequate funding streams)

Using an intermediary as a pooled funding strategy has unique advantages:

  • Most important, the symbolic commitment of a community’s leading funders helps to normalize these conversations and strategic considerations among nonprofit leaders
  • This type of work may not otherwise be supported by funders for various reasons, such as:  it’s outside of traditional funding categories; the grant amounts may be too small; funder grant cycles may not coincide with the timing of grantee needs
  • A 100% fully dedicated intermediary can support a rolling application process. While some organizations have been in our pipeline for almost a full year, when and if they are ready to move with a sensitive process, an application can take as little as a month from proposal to funding
  • Confidentiality in which to explore options is preserved. Our funders do not know who is considering a collaboration unless and until a formal grant proposal is received for their action.  This safe space is invaluable to organizations evaluating what are in some instances extraordinarily sensitive scenarios
  • The intermediary can develop skills and relationships that are additive and dedicated

Better fiscal health data on nonprofits sorely needed. These are tough times, and we need better data about the fiscal health of the region’s nonprofits. We need to move from anecdotal awareness of the challenges (“We’re all tired” reported the chair of a small nonprofit who was seeking a partner institution, only five minutes after the ED of another organization in the same sub-specialty field got off the phone wondering the same thing…) to an awareness grounded in the reality of nonprofit financial health.

 

The shift to ‘nonprofit sector building’. While our nine funders all have had some history with capacity building of one kind or another, what they are building through the Fund’s work is now ‘nonprofit sector building’. We are engaged in supporting collaborations that transcend what have been traditional organizational boundaries. This is bold, and a sign of the times – formal collaboration/restructuring is needed in many instances to maintain the sustainability of mission and service to end beneficiaries.

 

Finally, I will close with a quote from one of our funders, Sara McCullough, of the merged United Way GPSNJ:

 

“Most proposed partnerships require a vision, something awesome and bigger than the sum of the separates.  Not the vision of each of the organizations but the aspired vision together.  In our merger work, we used to call it “painting the sky”.  It’s the thing to get jazzed about…without that, the likelihood of success decreases.  In most strategic partnerships, particularly mergers, there is loss…loss of some sort or another.  It just is.  Without something to aspire toward, sometimes the loss pulls at the respective parties and wears folks out, puts up one too many barriers or starts to make folks question what the win is.  Someone has to keep waving that flag during the exploratory and continued work – not in a delusional/denial way but in an aspirational way.”