Building more sustainable nonprofits

  • by Roger Doughty
  • Wednesday April 20, 2011
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In Part 1 of this piece, I raised some of the big questions facing the LGBT community about the future of our nonprofit organizations. Why do they matter, and what does it mean if they fail? I certainly don't pretend to have all the answers, but here are some suggestions for how our community can begin to figure out those questions and build more sustainable organizations.

1. Support LGBT boards of directors

Organizations are likely to be healthy only so long as their boards are capable. Volunteer board members deserve our appreciation – and our support. Nobody is born knowing how to be an effective board member, but right now, just a handful of the people leading LGBT nonprofits get trained on topics like financial oversight, strategic planning, fundraising, and board roles and responsibilities. We have to invest in our community's volunteer board members by helping them develop the skills they need.

2. Sharpen our picture of community needs and capacities

We lack a clear, community-wide picture of community needs and organizational capacities. Because Horizons Foundation works with many groups, we know a fair amount about these. Other nonprofits and government agencies know a great deal about particular issues or populations. But nobody has a full picture.

A serious assessment would take time and money, and it wouldn't be easy to keep the process from becoming politicized. But it would be an invaluable tool for individual organizations in their decision-making, for donors, foundations, and government agencies – and for thinking about our community's future.

3. Help nonprofits explore partnerships and mergers

Notwithstanding the optimistic hype they sometimes get, mergers aren't the answer to everything. They're difficult, complicated, and often backfire (just think about AOL-Time Warner or other famous disasters). They don't always even end up saving money. But given the hard realities at hand, it's almost inevitable that closer partnerships and/or mergers will prove the best option – or even the only option – for some.

Our community can help in three ways. One is to remove the stigma; a merger doesn't mean that a group has failed. It more likely means that times have changed, and the best answer to a new situation – the best answer for the community – is a merger. Second, we can deepen connections among both the boards and executive directors of LGBT nonprofits so that working relationships and trust become stronger. And third, organizations considering mergers need access to expert advice and experience so they can explore, hammer out, and implement plans that work in the real world as well as on paper.

4. Increase LGBT giving

We also simply have to look at the money side. Organizations can cut and cut – striking deeper and deeper into vital activities – but even that won't be enough if we can't boost the supply side of the equation.

We have little control over the collapse of public funding or the fall-offs in foundation endowments and grantmaking. But we do have control over our own giving.

We've got work to do – and vast potential. Horizons' research has shown that less than 5 percent of LGBT people in the Bay Area make financial contributions to local or national LGBT groups. Sadly, the just-released Movement Advancement Project report reinforces that lowly figure – they found that fewer than 3.4 percent of LGBT Americans gave to any one of the 39 major organizations surveyed.

Let's be clear: this means that fewer than one in 20 LGBT people contribute financially to LGBT causes.

What if we could double the percentage of LGBT people giving to 10 percent? Or 15 percent or 25 percent? The money wouldn't suddenly solve all nonprofits' problems; it wouldn't bring us freedom and equality overnight. But it would make us much more powerful; much more capable of winning (and safeguarding) our rights; much better able to ensure that LGBT young people, elders, people with HIV, and many, many more can get the help they need and deserve. What's more, it would allow our nonprofits to focus a bit more on their missions, and a bit less on scraping together next month's rent.

And there's more to giving than bolstering LGBT nonprofits financially – the act itself builds community. Once you've given, be it $25 or $25,000, your relationship to community changes. It deepens. You become connected in a different and powerful way – not just a member by association, but as a contributor, an actor, a leader in the movement. There are reasons that research shows that people who give are happier.   (How we increase giving is a matter that requires its own articles, and merits much more discussion, research, and action than it's received.)

5. Find a long-term answer

Finally, we've got to think bigger, past today's challenges and toward the long-term strength and sustainability of our movement. I doubt there will ever come a day when nonprofits don't have to fundraise. And that's not all bad, since having to fundraise is one way that nonprofits stay accountable to the communities they serve.

What we need is a better way of fueling and funding our movement than scrambling to raise every dollar every year. That system leaves us profoundly vulnerable to economic fluctuations, or shifts in public policy, and we have little reserve capacity to respond to crises or take advantage of opportunities. (Remember how difficult it was to raise early money against Prop 8? Or to pay for life-and-death programs early in the HIV epidemic?)

It's time we lay a financial foundation under the LGBT community. There's a way to do it, too: by tapping into the staggering financial potential in bequests and other planned gifts.

One illustration: if we assume that LGBT people are roughly as wealthy as non-LGBT people, Horizons' analyses show that we collectively hold more than $20 billion in Bay Area residential real estate alone. (That's "billion" with a "b.") Even 1 percent of that total, put into something like Horizons Foundation's LGBT Community Endowment Fund, would yield a permanent fund exceeding $200 million to support LGBT needs year in and year out. And that doesn't even include other wealth that will be distributed through estates, like stocks, IRAs, life insurance, and so on.

Yes, this will take years to build. It's also arguably the single most viable way to lay that kind of financial foundation (other than await our own Bill Gates or for manna to rain down from heaven). But if our community is here for good, it's time we start planning like it. If such an endowment had been started 25 or 30 or 40 years ago, today it would be easing the recession's pain on LGBT organizations – and, more importantly, on the thousands and thousands of people whose lives they touch, help, heal, and even save.

We can't re-do yesterday, but we can plan and create for tomorrow. Generations will be following us. Let's leave them a community they'll be proud of.

Roger Doughty is the executive director of Horizons Foundation. The link to Part 1 of his op-ed, is