By Clay Holtzman
Puget Sound Business Journal
Originally published February 26, 2010

Seven of Washington’s leading charitable foundations want to strengthen the nonprofit sector by asking other grant makers to fund gaps in how individual nonprofit groups— and the sector as whole — operate.

By funding administrative services and even shared resources rather than specific programs, grant makers can help nonprofit organizations better weather hard economic times and ultimately improve the quality of their work, according to recommendations stemming from a statewide study of the nonprofit sector commissioned last year by the seven foundations.

It is unclear whether other grant makers will follow the recommendations.

“The goal of this endeavor is about learning what the sector needs and how private philanthropy can support it,” said Marie Sauter, associate program officer in the Pacific Northwest division of the Bill & Melinda Gates Foundation, one of the seven groups that funded the study.

Because many grant makers typically fund programs instead of the operations required to deliver them, the report’s recommendations could change where foundations allocate their grants and create a new source of revenue that is sometimes challenging for organizations to secure.

Also, the nonprofit groups in Washington’s rural areas could gain access to resources that are more readily available in the Puget Sound region.

The seven foundations say they will make grants, individually and collectively, in support of their position. Already, the Walla Walla-based Sherwood Trust says it has pledged to support creation of a “learning center” at the city’s community college that will provide a six-part series of workshops this year examining topics such as recruiting and training board members.

“There is a huge need from the perspective of nonprofits,” said Jock Edwards, president and board member with the Sherwood Trust.

In response to the financial crisis in late 2008, the seven foundations commissioned the study of the nonprofit sector’s operations, or capacity.

The “Nonprofit Ecosystem” study, which is available on the Philanthropy Northwest website, examined the sector at an individual, community and statewide basis and compared it to an ecosystem that requires essential components to maintain overall health. Investigators traveled to 14 locations in Washington to evaluate which resources are present and which are needed to help organizations operate more effectively.

“We realized that there are common problems, but not common solutions,” said Barbara Dingfield, partner with The Giving Practice, a consulting arm of Philanthropy Northwest, the Seattle-based association for grant makers in the region.

“In a way the economic crisis pointed out to funders that we can’t meet our objectives unless these nonprofits continue to function well in our community,” Dingfield said.

The study examined eight essential elements, such as the presence of professional consultants, and found that no geographic area — including King County — possessed all eight attributes.

For example, Bremerton lacks an association for nonprofit organizations, while Yakima needs a better network to coordinate volunteers.

“My hope is that by looking at this (report), it will not only have governance and management impact, but also community impact as well,” said Michael Bisesi, director of the Center for Nonprofit and Social Management at Seattle University.

Tags: Nonprofit Ecosystem, nonprofit partners, The Giving Practice

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