1 of 3: Re-examining Nonprofit Economies
pursuit of a just and equitable society can invite a measure of paralysis when
you’re faced with the simple challenge of where to start. Even if you narrow your focus to the
nonprofit sector in particular, there are countless ways to approach the
question of how to effectively promote positive change.
At NFF, our
approach has been to help nonprofit organizations develop the financial
capacity to keep providing the programming their missions demand. The end goal of this work is the facilitation
of social change, but the approach demands an initial focus on the welfare of
individual organizations. But what if
we approached the question from another angle?
What if we started by focusing on the needs of whole communities and
then asked what resources individuals and organizations - including nonprofits
- could provide to fulfill those needs?
spoke with Cheyenna Weber of SolidarityNYC, a collective which seeks greater
visibility and networking opportunities for organizations such as cooperatives,
collectives, and credit unions - participants in New York City’s “Solidarity
Economy” - in order to foster grassroots economic development and social
justice. Drawing on that conversation,
we plan to present a series of three posts, where we look at how the solidarity economy reframes
the problem of the economics that undergird an institution-focused nonprofit
sector, then we’ll flesh out the solution a solidarity economy framework
proposes, and, finally, we’ll look at real-world examples that suggest
practical steps funders, nonprofits and their communities can take to bring about
more comprehensive strategies for change in particular communities.
know that nonprofit organizations exist, first and foremost, to achieve social
missions. However, the current economic
crisis has also made it quite clear that regardless of tax status, nonprofits
navigate the same economy as their private and public sector counterparts.
Because nonprofit programs are designed primarily around criteria of mission
achievement rather than stand-alone economic sustainability, and because these
programs are often intended to serve clients who are unable to pay market rate
for services, they rarely earn enough direct revenue to cover the
organization’s costs. Instead,
nonprofits must rely on economic subsidy from other sources - often government
or private sector wealth.
it’s not just that nonprofits are in the same macro-economic boat as everybody
else – nonprofits rely on these other sectors to survive. For nonprofits, this often means navigating a
dual relationship, trying to meet the priorities of those paying for services
on one side and the needs of those receiving services on the other. In this relationship, each party comes to the
table with a set of priorities which can sometimes vie for attention.
if a nonprofit relies on grant funds in order to maintain operations,
leadership may feel forced to adjust the program structure in order to pursue a
particular piece of programmatic funding (and the overhead coverage it
provides) even if it does not quite fit with the mission or client . Furthermore, two nonprofits with similar
missions can find themselves in competition for funding from the same sources,
and may therefore be less likely to undertake collaborative efforts with one
another, even if those collaborations might best serve their constituents.
other words, the power of money - even the most well-intentioned money - can
decrease the power held by clients and the organizations that serve them to
shape the programs intended to bring about change in their communities.