These past few weeks, I have had the opportunity to listen to nonprofit leaders and board chairs talk about how the nonprofit sector can advance its work and the challenges they face. Five forums across the state discussed the sector-level themes that emerged from DANA’s summer Leadership brainstorming session. I also had an opportunity to meet with Delaware state division leaders to listen to their perspective about the challenges of servicing the community. What is interesting is that there were some common themes.
The first is shrinking and shifting resources. Many nonprofits are feeling the impact of funding shifts over the past few years. It is coming from all sides: changes in federal or state funding for specific programs, shifts in focus areas by foundations, and challenges in engaging individuals. What’s more, the funding seems to be more restrictive, thus causing nonprofits to try and identify ways to generate new unrestricted funds. Division leaders are faced also with capped budgets, requiring them to make tough priority calls on where to support the community.
At the same time, both government officials and nonprofit leaders indicate that demand for services is growing, the second most common theme. No wonder: from 2007 to 2013, we saw the state population grow. The 65+ population has increased 10%, and visitors to the state have increased 12%. However, nonprofit revenue to support Delaware citizens and visitors has dropped 13% (Urban Institute, NCCS). Delaware nonprofits provide services that create a quality of life which attracts people to Delaware. Their payroll and spending generates funds for the State government, which helps the economy. The financial scarcity could erode the good work nonprofits do, thus reducing the positive impact they provide.
Listening to the creative solutions individual nonprofits are exploring to find ways to generate money is inspiring. There needs to be more of this. But there also needs to be an infusion of financial resources into the sector. In 2015, 61% of Delaware nonprofits indicate they have less than 4 months of cash (Nonprofit Finance Fund, 2015). This means nonprofit leaders are spending more and more of their time seeking funding, and less time pursuing mission and innovative ways to deliver. Certainly, opportunities to reduce costs exist within the sector. And nonprofits are collaborating on program delivery to improve impact. However, the systemic issue has to be addressed as well.
Both nonprofit leaders and government leaders agree that we need to understand what is needed to serve the citizens of Delaware in the social sector. Only then can we create the case for support to invest, and identify creative ways to generate the nonprofit sector revenues needed to ensure the quality of life we value in Delaware continues.