The recession has not only hurt for-profit businesses, it has also harmed nonprofit operations.
Many nonprofits struggle to survive during the recession because they rely heavily on corporate donations and government grants. Both dry up during economic downturns.
“Most non profits are pretty reliant on the business economy as a whole,” said Todd Clausen, data center coordinator at Milwaukee’s Non Profit Center. “Most people don’t really understand that connection.”
According to Clausen, social service non profits rely heavily on government grants and foundations in order to provide their services.
“Government grants have been cut way back,” he said. “Budget cuts, lower business and bank profits and lay offs have made it difficult for corporations and individuals to sort of justify making additional donations.”
More than a few nonprofits in the U.S. have fallen victim to the economy in the past two years. Some local nonprofits have also closed their doors, but more and more are finding ways to do more with less, Clausen said.
“Many nonprofit organizations in our area have cut back on staff,” he said. “Smaller neighborhood organizations have forced their employees to take furloughs or haven’t hired for open positions.”
Despite the setbacks nonprofits have faced during the recession, most organizations have managed to stay true to their mission, Clausen said.
“They understand the importance of fulfilling the organizations’ mission, and so in order to do that most organizations are forced to do more with less, which has forced people in the organization to step up and accept new responsibilities,” he said.
For example, Milwaukee-based Jewish Family Services has downsized some staff positions including a vice president position.
“We’ve had to make sacrifices as well,” said Sylvan Leabman, president and chief executive officer at JFS. “We haven’t lost sight of our mission, though. Our staff has really stepped up their work loads.”
According to Sally Lyne, vice president of development and communication, JFS has frozen salaries and has turned to more electronic marketing and mailing.
JFS recently held its annual Masterpiece event on Milwaukee’s lakefront, and despite the recession, this year the event was bigger and better than previous years.
“We have always focused on this event as a way to say thank you to our donors, and a way to give back to the community and the city of Milwaukee,” Lyne said. “This year, with the economy the way it is we wanted to make it extra special.”
The Masterpiece, which typically showcases cars as “Art on Wheels,” brought extremely rare vehicles to Milwaukee’s lakefront.
“Many of the vehicles we managed to bring into town were one of a kind, the only one made,” Lyne said.
“Cars came from all across the country and even one all the way from Sweden,” Leabman said.
Attendance and ticket sales were up 25 percent at this year’s Masterpiece event. Lyne said the organization benefitted from the “staycation” trend. She also credited JFS for doing a better job of relaying the message about what the organization does for the community.
“It has always challenging for us to convey to potential donors that we are a broad-based social service agency,” Leabman said. “It’s a challenge with a name like we have to portray we serve more than just the Jewish community.”
Collaborative efforts can also reduce redundancy costs for non-profits, Clausen said. About 4 years ago both the Milwaukee-based First Stage Children’s Theater and Milwaukee Youth Symphony Orchestra (MYSO) were looking to move or to build a new facility for their organizations. When they discovered that their needs and schedules were similar the organizations decided to collaborate and together purchased and renovated the building at 325 W. Walnut St., Milwaukee. Sharing the building has saved both organizations money.
“Looking back on it now, it looks like we made an even better decision,” said Fran Richman, executive director of MYSO. “We didn’t know then what was in store for the economy, but the collaboration with First Stage has allowed us to operate more efficiently and get the kind of space we desperately needed in order to expand our programs.”
“Being a young organization at the time, (First Stage) didn’t have the means or the wherewithal to launch a capital campaign for a new building,” said Rob Goodman, founder and manager of First Stage Children’s Theater. “By combining the resources of the two boards and of the two staffs we were able to put together a capital campaign and build the $13.7 million Milwaukee Youth Arts Center.”
According to Goodman, the two organizations have experienced incredible efficiencies in terms of cost savings and fulfilling their mission within the community.
“Both organizations have grown since the collaboration, (First Stage) has nearly doubled its capacity and the new facility has enabled us to really grow our business and serve so much more of the community,” he said.
The new space is utilized well by both organizations, Richman said. First Stage Theater focuses on heavy summer and weekend-based programming, while MYSO has heavy after school and evening-based programming.
“It works out quite nicely, and both of us get use of the facility and can focus on cutting costs in other areas,” she said.
Both organizations have reduced cost in other areas and saved money by sharing expenses. According to Goodman, the new building and the collaboration has increased his organization’s visibility in the community.
“New donors are more aware of us now and our mission, the collaboration has allowed both organizations to operate without a deficit during these difficult times,” he said.
Survival tips for charities from the Milwaukee Nonprofit center
1. Focus on your core mission and consider removing programs that don’t align with it.
2. Collaborate with others. Avoid duplicating services and learn you aren’t alone in your issues.
3. Build networks with and communicate needs to funders. Be transparent.
4. Diversify your funding streams. Don’t rely too heavily on any single source of income, because nothing lasts forever.
5. Understand your neighborhood and the needs of your clients. Stay on top of the changes and shift gears as needed.
6. Measure your impact on the community and report it to funders as well as the public.
7. Recognize the needs and accomplishments of your employees as well as volunteers.
8. Learn to more effectively manage and utilize volunteers.
Volunteerism on the rise here
More people in the Milwaukee area are volunteering this year, according to Todd Clausen, data center coordinator for the Volunteer Center of Greater Milwaukee.
The number of volunteers taking referrals from the nonprofit center is up from 3,401 at the end of 2008 to 2,406 at the end of July, Clausen said.
“Recent college graduates are doing a lot more volunteering in order to network and gain experience,” Clausen said. “Individuals who have been laid off or who are under-employed are also using volunteer activities as a way to keep busy and gain those necessary contacts.”
Wisconsin is currently ranked 12th in volunteering, according to www.volunteeringamerica.gov. Among the 51 largest cities in Wisconsin, Milwaukee is ranked 12th in volunteering activity.
However, according to Clausen. other states have seen a greater increase in volunteer activity.
“Wisconsin has notoriously been among the highest ranking volunteer states, however according to recent national reports Wisconsin’s volunteer activity has remained steady,” he said. “So the state has slipped a little in the national rankings due to the insurgence of volunteering in other states.”