The foundation of social capital 

Social capital has many definitions, but a universal definition for nonprofit social capital is establishing trust, norms, and networks that can advance organizational mission impact. Social capital comprises three fundamental elements: relationships between individuals and groups, trust within those relationships, and beneficial resources. Nonprofits are a perfect match for social capital since they are driven by the cycle of reciprocity: support and collaboration between the organization and the community. 

Hierarchical framework

Bixler & Springer (2018) illustrate the hierarchical framework of healthy nonprofits as a pyramid with three layers, each dependent on the other. It starts with a strong base as a foundation of organizational capacity. The next layer is social capital, which becomes the power to…

Nonprofit organizations thrive on the vision of the organization and leaders who fulfill the mission, driving lasting impact. Nonprofits need to harness the energy of the entire multigenerational workforce to ensure sustainability and ultimate fulfillment of the organizational mission- including Generation Z. Gen Z is poised to redefine nonprofit leadership with their unique values, perspectives, experiences, and skill sets. But how can nonprofits effectively engage this unique generation to create empowered leaders?

The rise of the Gen Z workforce

Generation Z represents individuals born between 1997 and 2012, a significant portion of today’s workforce. This generation is considered to be digital natives, growing up surrounded by a changing digital landscape influenced by social media and instant access to information. Gen Z has been further shaped by the life altering events that caused societal shifts like 9/11 and COVID-19. This generation is suited for nonprofit work with a heightened interest in social change and community impact through their values of diversity, creativity, and authenticity. Gen Z’s approach to work is driven by innovation, finding their purpose, and creating impact. They prioritize jobs that align with their personal values specific causes such as climate action, racial equity, and mental health resonate deeply with Gen Z. Their interest in meaningful work provides nonprofits with a unique opportunity to engage this generation to…

Let’s explore what these expectations look like as well as how to attempt to alleviate that pressure on staff.

The overhead myth and the nonprofit starvation cycle

Overhead refers to costs to the organization that are not specific to programming or service delivery. This includes payment for office space, salaries of non-programmatic employees, and fundraising costs. If your nonprofit occupies a building, you have to pay for electricity, heat, and water. Unless previously agreed upon, you have to pay a salary to your CEO, CFO, and Human Resources staff. You have to pay for office supplies. If you plan on doing any serious fundraising, you have to pay to print off fliers and mailers.

The nonprofit starvation cycle comes into play with charity watchdog sites who rate nonprofits based on the percentage of revenue they spend on overhead as opposed to their total revenue. For example, a nonprofit reports a 6% overhead expense rate. This will attract donors who look upon nonprofits with a higher overhead percentage as inefficient. And that nonprofit with a 6%…

The nonprofit sector faces challenging declines in charitable giving, created by economic uncertainty, global conflict, and the lasting impacts of the COVID-19 pandemic. Reports from Giving USA show that individual giving has continuously decreased, reaching levels not seen in decades. Along with this, Baby Boomers, who have been the backbone of charitable giving, are retiring and passing on their wealth to younger generations. The New York Times (2023) highlights that $16 trillion in wealth will be transferred to Generation X, Millennials, and Generation Z within the next decade. However, with current philanthropic practices being tailored to the Silent Generation and Baby Boomers, nonprofit leaders must consider the best strategies to engage Millennials and Generation Z. After all, these donors may be the key to reversing the decline in charitable giving. To ensure sustainability, nonprofit leaders must implement innovative strategies to recruit, retain, and solicit the next generation of donors.

Enhance transparency to build trust

Increasing an organization’s transparency is a crucial step in building trust with younger donors who often distrust institutions and large-scale fundraisers. These donors also value autonomy and prefer to extensively research an organization before making a donation. Nonprofit leaders can practice transparency by making financial documents, such as the IRS Form 990, audited…

Why community collaboration matters

Community collaboration refers to the partnerships fostered between NPOs and the communities they serve, including local organizations, businesses, and individuals. These partnerships are aimed at achieving common goals that benefit the community. Effective collaboration strengthens the community as a whole and enhances the impact of nonprofit missions.

Research shows that when nonprofits engage with their communities, they are more likely to improve program outcomes, expand services, and increase funding. Direct engagement leads to better community satisfaction, more relevant programs, and improved access to local resources. By building partnerships, nonprofits can address complex issues more effectively fostering a sense of trust.

Trust is a cornerstone of successful collaboration. NPOs must ensure they authentically represent and involve the communities they serve, particularly historically marginalized groups. A…