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Public/Private Leadership Required for Innovation in Philanthropy

It has been a rough year for Valley nonprofits and ultimately for the communities and individuals they serve. Mary Reinhart’s coverage of the crisis in health care (“Amid state cuts, non-profits strain to treat uninsured,” September 22, 2012) leaves no doubt about the long-term price we’ll pay for short-sighted public policy and severe funding cutbacks. The narrative about health care, however, is one part of a larger story regarding not just the continuous erosion of our social safety net but also the increasing vulnerability of the nonprofit sector and the need for bold community responses.

Consider the parallel crises in child protection services and in education, each of which have received in-depth analysis by the Republic.

Consider the demise this year of several long-standing community-based organizations (e.g., the WellCare Foundation, Arizona Jewish Theatre, the Arts & Business Council of GreaterPhoenix, Community Food Connections) that have sustained, healed, educated and inspired our community.

Some are gone because of failures of governance, some because of funding cutbacks they could not withstand, or others because of their inability to adapt to a highly competitive marketplace.

They signify another looming reality – that numerous nonprofits  remain at risk for the same reasons, with zero margin for error and limited internal capacity, drawing on their reserves (if they have any), making last minute appeals to live another day, or doing far more with far less.

Consider the additional likelihood of a major shakeout among behavioral health and social service organizations, in large part because of the reforms envisioned in the Affordable Care Act. Many single program-focused agencies will no longer be viable; some will dissolve, and others will consolidate into larger more competitive multi-service organizations.

With at least 12,000 nonprofits already operating in Maricopa County and, given the nearly 40% increase in the number of nonprofits over the last fifteen years, the likelihood of more entries in the marketplace, the competition for financial support will intensify and an already limited reservoir of philanthropy will be strained to meet the demands. 

These developments certainly amount to a compelling case for charitable largesse, particularly as the season of appeals for charitable contributions commences. However, the fact is that that a convergence of social, economic, technological, and political trends are transforming the terrain on which the business of caring is conducted. The community can ill-afford redundancy of effort, deficiencies in governance, and adherence to outdated business models. The nonprofit sector is ill-equipped to handle the challenges of these changes on its own. As is the case in other industries, business-as-usual in the world of philanthropy just won’t cut it anymore, and an each-agency-for-itself attitude does not serve the common good.

Therefore, let me suggest that the scenario I’ve painted calls for a fundamental rethinking of the way we organize, govern, prioritize, and deliver philanthropy in the Valley of the Sun and that, if ever there was a time for a public-private partnership of corporate, philanthropic, governmental, and academic leadership to address this opportunity, that time is now.

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