Finances continue to be ‘big struggle’ for nonprofitsNovember 30, 2018
By ALLEN LAMAN
The way Clayton Boyles sees it, nonprofit organizations fill the gap left by government agencies and the private sector. If tending to an issue isn’t the government’s responsibility, and private sectors can’t turn a dollar on it, that’s where nonprofit groups step in.
But nonprofits have needs of their own, and they are presented with a unique set of challenges that come with the pursuit of the success of their individual missions.
According to a survey recently completed by the Welborn Baptist Foundation in the Greater Evansville Area, nonprofit organizations in the Indiana counties of Gibson, Posey, Vanderburgh and Warrick, and Kentucky’s Henderson County, need help. Their communities need their help, too.
“I’m just going to say, high level, that whatever’s in that study can’t be very dissimilar to our community, because we’re so close,” said Boyles, executive director of the Dubois County Community Foundation. “I would say that we even utilize that study to a degree on how we connect to our nonprofits to help them where we can.”
Welborn Baptist’s survey found that most of the studied nonprofits are working with budgets valued at less than $500,000, and half of them have less than six months of revenue in their reserves. It also reported that other than funding, the top challenges area nonprofits face are related to recruiting and maintaining staff and volunteers.
The Herald spoke with the DCCF and representatives from two area nonprofits about their challenges, and heard similar reports.
“I would say what we hear the biggest challenges are are fundraising, board development … and the third biggest is just being financially sustainable,” said Nicole Lampert, communications and engagement manager with the DCCF. She explained that building a sustainable nonprofit model can be challenging.
Tammy Lampert is the director of the Southwestern Indiana Child Advocacy Center Coalition, a nonprofit that provides forensic interviewing services to children reporting abuse in seven counties, including Dubois County. She wasn’t surprised with the study’s financial findings.
“I will say on the financial side, and then when they were talking about the reserves, that is 100 percent accurate for probably a majority of nonprofits,” she said. She explained that grants often reimburse the cost of tangible items — salaries and training — but they don’t go directly into cash flow. “That is a big struggle for any and all nonprofits I’ve ever talked to,” Tammy said.
According to the Welborn Baptist survey, a diverse funding mix — especially one with a healthy base of individual donors at all levels — helps organizations weather financial changes like the loss of grants or market fluctuations. Just under half of the surveyed nonprofits’ revenue comes from private donors, as compared to upward of 70 percent nationally.
SICACC has a roughly $150,000 budget that is made up mostly of dollars from the Victims of Crime Act federal grant, and a state grant that goes to child advocacy centers across Indiana. The rest comes from fundraising. The amount in the organization’s reserves varies, and depends on those fundraising efforts.
“The reality is, your nonprofit organizations ask for funds like donations and contributions, and they host fundraisers because they have to have that money in order to operate,” Tammy said. “It’s not that they’re being greedy, it’s not that they’re being wasteful of their funds. I mean, they need those in order to be able to survive.”
Boyles stressed that the amount of a nonprofit’s budget alone does not dictate much. Budgets at different nonprofits cover different things: from employee salaries at some, to programming costs at others, depending on the work they are completing.
“I don’t think that an organization or a person should look purely at budget and say, ‘Oh, they have too high of a budget,’” Boyles said. “Or, ‘Oh, they have too low of a budget.’ Because we have to ask the second question, and that is, what are they doing with those numbers?”
The DCCF has an operating budget of $450,000, for example, and a lot of that goes to personnel costs because it takes a considerable amount of skilled employees to complete the nonprofit’s work. SICACC’s budget goes mostly to salaries, benefits, travel and training.
Boyles explained the community foundation’s budget is unique in that it comes from an annual grant from an endowment and administrative fees that are collected from their work throughout the year.
Crisis connection, a regional nonprofit that offers domestic and sexual violence services in an eight-county area that includes Dubois County, builds its budget on dollars mostly from federal and state grants. About 18 percent of the organization’s budget — which was about $610,000 last year — comes from local sources.
“You’ve got to get creative, and I’m sure locally the same people are approached for so much,” said Director Paula Rasche. “But we do have some generous individuals and organizations in our community, which makes that easier for us.”
Beyond finances, each of the aforementioned nonprofits have other hurdles they need to overcome to meet their missions. Boyles explained some community members don’t understand the endowment work the DCCF does. Tammy said child abuse isn’t an easy topic to talk about, which can make it difficult for SICACC to engage the community. Crisis Connection could always use more volunteers, like Spanish-speaking interpreters and help-line monitors.
The study also stated that collaboration with others can help nonprofits reduce financial burdens and increase efficiency. Rasche said she’s seen that overall sense of togetherness strengthen locally.
“I think we’re all doing a better job of articulating what our mission is and what we’re working on,” Rasche said of local nonprofits. “And then we all kind of work together to make referrals and use each other as resources. I feel like, on a positive side, it feels like that’s improving.”
Boyles noted the DCCF plans on taking a deeper look at the survey, and will continue to reach out to nonprofits to understand their needs and how his organization can play a role in supporting them.
The full findings of the Welborn Baptist Foundation’s survey can be viewed on the organization’s website.
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