Rescuing the Rescuers
Some of our most important nonprofit service agencies are in fiscal trouble—which could mean trouble for us all. Can they change their ways? More important, can we?
Illustration by Robert Burch
As Joan Moallem plays an old upright at the Francis X. Norton Center in Wilmington, 200 people pile in from the streets of West Center City. Many are homeless. Some are HIV positive. Others are addicted to crack. They’ve come together to share a Thanksgiving feast.
Moallem, who’s spent decades in mental hospitals battling schizophrenia and bipolar disorder, identifies with her audience. “I’ve been there and back,” she says. Her walk is slow. Her hands shake. Yet Moallem’s trembling fingers produce a nearly perfect “Oh Holy Night.”
“The music is a gift from God,” she says. “But without my group, I’d be institutionalized for life.”
The group is Connections CSP, a statewide agency that provides treatment, housing, and rehabilitation services for people with mental health and substance use disorders. Last year, when Moallem was committed to the Delaware Psychiatric Center for the third time, Connections CSP picked up her case, then provided her with a managed apartment. “I owe them my life,” she says.
Executive director Catherine Devaney McKay assumes most folks have never heard of Connections CSP. “Homelessness and substance abuse are not exactly subjects people talk about openly,” she says. Yet without such charities, nonprofit leaders agree that Wilmington’s homeless situation could mirror Philadelphia’s.
“The amount of charities that are here and the amount that goes on, on a per capita basis, is phenomenal,” says Cam Yorkston, a consultant who has guided 150 nonprofits in 32 years. According to the National Center for Charitable Statistics, 5,233 operate in Delaware. Of those, 2,865 are 501(c)(3) public charities. The groups fall under myriad categories, from culture to social service.
And many are in trouble. The money needed to sustain them, it seems, is shrinking. And without them, people like Moallem will suffer.
So will any Delawarean who patronizes a theater, museum, Little League, community center, hospital, college or church.
“If nonprofits cease to exist,” says Pam Cornforth, chair of the Delaware Association of Nonprofit Agencies, “we all lose.”
What we’ve had to do in the last five to 10 years is change people’s thinking to make the individual donor a larger part of the revenue stream,” says Yorkston.
The economics are basic.
“If you don’t have charitable dollars flowing in from people who care, nonprofits will not meet their operational costs, will accumulate debt and possibly go out of business,” Yorkston says. “The business of providing services then falls to the public sector. There would be more unattended homeless people in Delaware.”
Charitable giving in Delaware is unique among states. In most, individual donations make up 70 percent of all funds, with the remainder donated by corporations and institutions. Here, that figure is reversed, according to Peter Morrow, president of the Longwood Foundation: Corporations have, historically, done 70 percent of the giving. Some have curbed their giving over the past couple years. Individuals have yet to make up the difference.
Why? Most of us—66 percent of those surveyed—don’t believe nonprofits operate efficiently, according to a 2001 study by DANA. The group’s Image of Nonprofit Sector Task Force also discovered that only 19 percent think charities actually help people.
“You’re talking about people (nonprofit workers) who’ve been trained not to toot their horns,” says Audrey Alvarado, executive director of the National Council of Nonprofit Associations. Their modesty and selflessness, it turns out, has harmed them.
“Nonprofits have to tell people what it means to give, who the giving serves and why it helps,” says Valerie Pletcher, chair of the DANA task force. “We also need to do a better job of showing how accountable we are and give colleagues tools to improve transparent operations.”
“The problem,” she says, “is that there’s confusion when groups appear to share the same mission.”
For example, art enthusiasts can support OperaDelaware, the Delaware Theatre Company or any of Delaware’s 314 cultural nonprofits. Education: 49 groups. Environmental groups, such as The Nature Conservancy in Delaware: 54. Religious, like The Ministry of Caring: 536. Community improvement, such as Wilmington Housing Partnership: 156.
Large nonprofits such as the University of Delaware and Christiana Care Health System employ specialists to perform marketing functions. Smaller groups have to be creative when trying to build awareness.
When the Delaware Breast Cancer Coalition throws a gala, local breast cancer survivors become star attractions, proving that breast cancer affects everyone. Faithful Friends makes pet adoption easy by taking animals to shopping malls to show them off. The Reverend Thomas Laymon himself buys radio airtime to tout the Sunday Breakfast Mission. David Amado, music director of the Delaware Symphony Orchestra, is quashing snootiness by regularly appearing on cable access TV programs. And United Cerebral Palsy of Delaware gets ink as the official corporate charity of the Blue Rocks.
The duty of public relations at many nonprofits falls to executives and development directors, though most of their time is spent securing program subsidies. It’s easier to get funding for brick and mortar than it is for operating expenses. Fred Sears, president and CEO of the Delaware Community Foundation, which manages charitable funds and awards grants, says The United Way and the legislature’s Joint Finance Committee are the only groups that continually fund operating costs, unless the organization has a contract to perform services for the state, federal government or other groups.
“The vast majority of foundations will only provide funds for capital projects because they’re one-time requests,” Sears says. “Operating funds tend to be annual needs, and funders don’t want to get involved in annual requests.”
Medicaid, Medicare and the state fund Connections CSP, where McKay runs 325 units of housing and a fleet of 50 vehicles. Yet she can barely afford basic operating expenses such as gas and utilities. The nonprofit is the largest of its kind in Delaware, yet McKay did not meet capital campaign goals last year. “The total project cost was $10 million,” she says. “We borrowed $7 million. That tells you how well we did.”
The ramifications? Last year, Connections CSP served 5,000 people, most of them homeless. If the organization folded, the state would find shelter for some clients, but most would fall through the cracks.
Cornforth, of the DANA, says, “Nonprofits need to talk about the value they bring to the Delaware economy.” DANA reports that Delaware nonprofits have $9.1 billion in assets and represent 7 percent of the gross state product. “Good public awareness inspires donor loyalty.”
Robert Egger, founder and president of the DC Central Kitchen and one of the 2007 NonProfit Times 50 Most Powerful and Influential Leaders, says people in Delaware are very generous.
“But it’s rare that nonprofits get any regular media coverage, save for seasonal stories or, in too many instances lately, when there is a scandal to report,” Egger says. “In that vacuum, folks don’t get a real accurate read on how influential and important the work of the sector is in every community.”
Recent bad press—The Red Cross 9-11 problem, the Washington, D.C., United Way scandal—is one reason nonprofit leaders have to prove their effect. Groups have to rebuild consumer confidence and boost transparency by quantifying and qualifying goals. “The old model a decade ago asked how many kids came through the door,” says former United Way of Delaware president John “Drew” Langloh. “Now we need to qualify how those kids are better off.”
The Beautiful Gate Outreach Center, a nonprofit run out of the Bethel African Methodist Episcopal Church annex in Wilmington, has served 15,000 people affected by HIV and AIDS since 2000. “It’s a mixed bag,” says executive director Renee Palmore Beaman. “We’re faith based. We have medical on site. We teach. We can quantify most things. But some of our success is intangible. And intangible isn’t always measurable.”
Intangible doesn’t fly anymore, especially at the Longwood Foundation. To win a grant, presenters must clearly articulate the uniqueness of their missions. “We need to know the details of what [nonprofits] plan to do,” Morrow says. “Then we want to know where the money will come from to complete the project. Many fall apart at that juncture.”
Beaman knows collaborations ignite public relations. By pooling resources and sharing costs, there is less duplication of services, less public solicitation for the same dollars and more money to hire shared marketing professionals.
One merger proves how communities are impacted when nonprofits join forces. The Delaware Aging Network (known as DAN), a consortium of 30 agencies, serves older adults in the areas of transportation, health care, housing and advocacy. In two years DAN has provided individual support to 1,200 people in Kent and New Castle counties. The collaboration partners Jewish Family Services, the Modern Maturity Center, the Sussex County Mobility Consortium, CHEER, Easter Seals, Generations Home Care, Kent-Sussex Industries and Nanticoke Senior Center, among others.
“We’re creative and innovative because we have to be,” says DAN executive director Susan Getman. “Our resources are constrained by various factors, while the need for our services never goes away—and often increases in slow economic times.”
Helen Berman of Dover says DAN came through when the government didn’t. When she developed a narrowing of the spine called spinal stenosis, she had to stop driving herself to physical therapy. Medicare wouldn’t cover transportation, so DAN found her a van. “These are dedicated people,” says Berman. “I have to believe they get something back.”
They get lots back, says Peter Drexler, chairman of Connections CSP. Drexler, an attorney at Barclays Bank Delaware, brings legal expertise to the group. Other board members are accountants or writers. “I’ve been fortunate,” Drexler says. “I want to give something back.”
Though nonprofits are service oriented, they must be run like businesses. “If you’re good at what you do, you’ll succeed,” Yorkston says. “ If not, you’ll go out of business.
“What makes a nonprofit successful is its ability to articulate clearly, to be succinct and, in a compelling way, make its case for support,” says Yorkston.
Sears encourages Delawareans to visit community centers to see the good they do. “You can’t resolve the teenage dropout or drug issue by arresting people,” he says. “It takes mentoring, gyms. You have to give kids hope. And the hope is coming from organizations that are barely surviving.”
“No doubt about it,” says Cornforth. “Nonprofits have stories to tell. We have to tell them better.”