Nonprofit organizations are beginning to collaborate in an effort to adapt to a challenging financial environment, according to a quarterly report by the University of San Diego.
“We are continuing to see financial challenges, especially around government funding,” said Laura Dietrick, director for the Caster Family Center for Nonprofit and Philanthropic Research at USD. “As state budgets constrict and federal dollars grow more scarce, two things are happening. First, nonprofits are being asked to take up the services that government is cutting. Second, they are not getting adequate funding to take on those services.”
The demand for increased services is strongest among nonprofits that provide critical services, such as food, shelter and housing. In response to this conundrum, organizations are seeking to collaborate, consolidate or compete for market share, according to the school’s State of Nonprofits Quarterly Index.
“The trend toward collaboration continues,” the report quoted one nonprofit CEO as stating. “We continue to hear from other nonprofits interested in sharing resources to reduce costs and spread resources as far as possible.”
Dietrick said she expects innovative collaboration to be the main theme for 2013.
“We are seeing real innovation around how to bring different people to the table to solve problems,” she said. “Whether they are partnering with corporations, government or other nonprofits, this is really intriguing and exciting.”
One such example is Connections Housing in downtown San Diego. Family Health Centers of San Diego is working with the Alpha Project and Path San Diego to bring numerous resources to homeless people. Connections Housing will include 223 housing units, a health center and other social services to provide a one-stop homeless service center. The City of San Diego provided the building — the old World Trade Center building at 1250 6th Ave.
Dietrick said it makes sense for nonprofits to work together to solve countywide problems. Her center is currently helping three food banks map the flow of food.
“They overlap so much, they recognize they have to work together,” she said.
USD’s quarterly index tracks six different areas and provides commentary from nonprofit CEOs. The current report shows that the demand for services was down slightly in the second quarter of 2012, the most recent period from which information is available. But Dietrick said the warmer months are typically slower for services as well as volunteer activity and donations. Donations were down 6.4 percent and volunteerism was down 30.9 percent on hours per household basis.
“We expect volunteerism to go up in the giving season, when people give more money and time,” she said about the fourth quarter, which includes October, November and December.
The report also shows that nonprofit job postings were up 14.3 percent in the quarter.
“There will continue to be job growth in the nonprofit sector,” Dietrick said. “But the jobs do require training and expertise. So it is not so easy to switch from one sector to another. But nonprofits are hiring and will continue to do so.”
The No.1 concern between nonprofit CEOs is funding, according to the report. One CEO stated that corporations are seeking more advertising return on investment for sponsorship and donation dollars. There has also been an increase in in-kind goods and volunteer hours from those who used to contribute cash gifts.
“Simply put, we need our volunteers, food and monetary donors like never before, and they need to know it,” said one CEO in the report.