WhyNeed | Objectives

 

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The nonprofit sector is of fundamental importance to the Greater Philadelphia region’s fiscal health. A 2010 study supported by The Philadelphia Foundation (TPF) showed that there were 7,300 active nonprofits in the five counties, which employed an estimated 242,000 people, accounting for a total of $11.3 billion in annual wages (which would make it the third-largest sector in the region by employment and wages).

 

However, an recent study The Financial Health of Greater Philadelphia Nonprofits reveals that nonprofits in the Philadelphia five-county area are fragile: roughly 7% are technically insolvent (i.e., liabilities exceed assets); over 20% have less than one month of cash reserves (i.e., virtually no margin for error); and over 40% have net operating margins of zero or less).

 

Whether a nonprofit is focused on alleviating poverty, or raising the bar for artistic or scientific excellence, the value these organizations share is their commitment to elevate social good above the pursuit of profits.  Nonprofits matter to this region, and we need to focus on supporting these organizations to maximize their impact at a time of rapid change and social turbulence. 

 

In the corporate world, businesses come and go, repositioning with the benefit of working capital, and as well as generous golden parachutes that may be provided to outgoing executives.  Among nonprofits, however, too many leaders are engaged in a desperate battle to raise adequate funds just to keep the lights on, let alone to look up long enough to imagine strategic opportunities that might enhance their sustainability.  Nonprofits that seek to explore and implement well-conceived collaborations confront many unique challenges.

 

In response to these challenges, as well as to requests from nonprofits, a consortium of funders launched The Greater Philadelphia Nonprofit Repositioning Fund (“the Fund”) in October 2015. The mission of the Fund is to:

Support long-term strategic alliances and collaborations to build organizational sustainability and improve program and service delivery across the 5-County Greater Philadelphia region.

 

We believe that in a rapidly changing environment for the region’s nonprofits, long-term collaboration can be an effective strategic option to enhance performance for two or more organizations – where the resulting whole can be greater than the sum of its parts. We also know that nonprofits need help to both explore and implement wise collaborations.

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The Fund seeks to routinize the consideration and practice of strategic alliances and restructuring as an important option for nonprofit leaders, boards, and funders.

 

To do this, the Fund:

  • Provides funding support for thoughtful exploration and implementation of formal long-term collaborations between and among nonprofits;
  • Learns from and elevate examples of successful collaborations as a means to inspire further market movement in a rapidly changing external environment;

  • Further develops the region’s capacity to provide wise and experienced technical assistance to nonprofits exploring these collaborative opportunities; and
  • Models collaboration as a group of funders unified around a vision – and pooled funding – to strengthen the region’s nonprofit sector through strategic alliances and restructuring opportunities.