Supporting Organizations, Not Just Programs

What are these other resources nonprofits need? Generally, community groups need the following in order to succeed: 

• Core support to ensure consistent funding over time to sustain staff, plan ahead, and launch multi-year programs and organizing efforts; 
• Organizational development to promote effective management practices, organizational planning, and capacity-building;
• Program development to provide the necessary technical assistance and economic analysis skills to implement economic development programs and other employment-related services; and
• Public policy support to help them have an impact on issues.

The resources required for success are commonly provided in other sectors. Larger nonprofits such as hospitals and museums are supported by an array of services and organizations. Private sector businesses also invest considerable resources in internal development. These same investments and resultant core competencies are needed on the neighborhood level. 

Affordable housing is a useful model here. Community housing development organizations (CHDOs) and community development corporations (CDCs) are supported by an array of services: community design centers, community loan funds, university-based centers, regional and national technical assistance providers, and major intermediaries. In cities such as San Francisco and New York, grantmakers have nurtured the creation of an interlocking system of support - development financing, technical assistance on development, a funding collaborative for operating support, management consulting, and intensive management training. 

Even though this supportive infrastructure is inadequate (as CDCs and CHDOs would readily attest), philanthropy has provided far stronger systems of support in this sector than can be found in any other field of grassroots activity. These investments demonstrate what could be done with comparable systems of financial, technical, and other support for community organizations as they engage in jobs-related activities. 

Using the lessons of affordable housing as a guide, let's explore the basic areas of support nonprofit organizations require and how foundation resources can be best applied to meet these needs. 

Core Support is Essential

As grantmakers know, most funding opportunities are for specific programs and special initiatives, not general operations. This trend in philanthropy has increased substantially over the past decade. Program-specific funding offers certain advantages, notably an emphasis on individual grant performance and greater targeting of resources to preferred activities. However, when this form of grantmaking becomes the dominant source of revenue for community organizations, other trade-offs result. 

Unless they can meet core funding needs, community groups are unable to lay a strong foundation for more specific work on jobs and economic development. Without the ability to cover basic expenses, these same organizations have difficulty maintaining good staff and creating stability and continuity in their programs. It is even harder for them to think ahead and plan strategically. 

The decision to target resources to specific activities or programs is well-founded in many instances. However, all community organizations require a basic level of core support for operation. When a disproportionate share of resources is tied to specific projects within the organization, the economies of project budgets are often adjusted to compensate. Community groups add part of the core costs of the organization into program-specific grants or otherwise cross-subsidize their core needs with these funds. 

This cobbling together of program-specific grants artificially inflates the costs of special initiatives. In this sense, inadequate core support undercuts one of the key advantages of project grantmaking - the ability to assess the performance of individual grants accurately. 

Lasting solutions to unemployment and welfare reform will require more than the sum total of individual programs. They are best confronted by strong and diversified organizations with adequate staff support. Here, too, the affordable housing experience is informative. The relative stability of CDCs is partly attributable to the consistent income they have received through rents and management service contracts. Unlike program-specific grants, this income has been flexible and continuous. Community groups also need a steady revenue stream in order to plan strategically and launch multi-year initiatives on jobs issues. 

Organizational Development

More established organizations often have procedures to handle these issues. Over time, these organizational systems are institutionalized through stable management and clear lines of accountability. Even long-established groups, however, may need assistance to promote effective planning for new or unfamiliar endeavors, such as an economic development initiative. Both old and new community groups need the assistance of organizational development specialists from time to time. The creation of sound, well-functioning, effective organizations is facilitated by specialists who have skills in planning, management, organizing, and leadership and staff development.

This type of support has generally been available to housing organizations. In many instances, the assistance has been connected to external mandates placed by funding sources. For example, federal Department of Housing and Urban Development resources stipulate some organizational conditions, ranging from the composition of governing boards to complex accounting systems. Banks and other financial intermediaries have also insisted on sound internal policies for housing groups, especially in the areas of capital management and bookkeeping. 

These external mandates have encouraged better management practices within the affordable housing sector. The experience of funders in developing housing support organizations is a blueprint for building similar support in the jobs arena. The absence of federal resources for general organizational development (which has been available in the nonprofit housing sector) places a greater share of this responsibility on private philanthropy. 

Program Development and Technical Assistance

Few community organizations have expertise on these subjects. Most do not have the luxury of devoting staff resources to investigate these subjects thoroughly during the early phases of a jobs or economic development program. They can benefit from access to people who have dealt with these issues before, and who are committed to transferring such knowledge and skills. 

From a grantmaking perspective, there are at least two reasons why technical assistance is important: 

• Technical Assistance Helps Ensure Quality Control and Appropriate Standards of Performance 

The absence of practical advice and assistance to organizations increases the potential that work will not be done well. Left to their own devices and without adequate support, community groups may make mistakes in complex program implementation. From an evaluation standpoint, work done in isolation may not be consistent with accepted standards from similar initiatives. 
 
• Technical Assistance Allows the Organization to Stay Focused on its Primary Mission: Helping to Revitalize its Neighborhoods, Communities or Region. 

In economic terms, the opportunity cost to an organization which must develop technical expertise "in-house" - without assistance from others - is less time for other program areas or the overall mission of the organization. While any new initiative should constitute a learning experience, too much learning can be inefficient when this same knowledge is accessible from others. A modest amount of technical assistance leaves the organization free to devote more time to the problems affecting its community.

Public Policy

All of these issues relate to public policy. In a very real sense, without the involvement of community organizations in public policy development, the neighborhoods they represent are likely to face further decline in living conditions and opportunities. 

Among philanthropists, the issue of grantmaker support for changes in public policy has sometimes been controversial. Some foundations have made the decision not to invest in these activities at all. Others support citizen participation strategies like community organizing, but not specific efforts to affect public choices. Still others invest heavily in the public debate over local, state and federal decisions. 

Because the purpose of this Toolbox is to provide advice and guidance on jobs issues, rather than build the case for a single approach, the merits of these positions are not compared. But for those grantmakers who do choose to fund public policy, the following are some observations about good grantmaking in this area. 

• Community Organizations and Policy Organizations Make Good Partners. 

Community-based organizations are found in nearly every part of the country. Similarly, policy organizations are found throughout the nation - especially in the form of statewide coalitions or watchdog groups that advocate on a particular issue. Some grantmakers have specified partnerships between community-based organizations and policy groups in exchange for joint funding. The Open Society Institute and other members of the State Welfare Redesign Grants Pool take this approach; (see resource section for references), recommends a regional approach to public policy in order to address urban distress. The mismatch between job seekers in the central cities and job vacancies in outer-ring suburbs is one example of this regional connection. Key publications of these authors are cited in the reading list at the end of this Toolbox.
 
• Community Organizations Often Need Technical Assistance on Public Policy, Just as They Require Assistance on Program Implementation. 

Although effective public policy work is not nearly as complicated as administering an economic development program, it is not wholly intuitive, either. For those grassroots organizations with no experience as policy advocates, technical assistance can help them engage in the debate more productively. Lack of policy experience is particularly common among CDCs and community-based service providers. Technical assistance may include guidance on how relevant decisions are made, what has worked elsewhere, and new strategies for policy options. Providers of such support are usually based at the state or national level.

Public policy strategies to tap corporate or public resources for jobs are examined in the employment training and sectoral development discussions. Community organizations will need to explore innovative policy proposals to make full use of these opportunities. 

1301 Connecticut Ave NW, Suite 500 • Washington, DC 20036 • Phone: (202) 833-4690 • Fax: (202) 833-4694 • nfg@nfg.org
Copyright © 1998-2008 • Web Site Usage Policies