It is no secret that nonprofits struggle to make ends meet when it comes to costs that cannot be directly attributed to a specific program. These costs, referred to as “indirect” expenses, “general and administrative (G&A)” costs or “overhead,” include such outlays as salaries and employer related expenses, utilities, rent, computers, and information technology (IT). Many funders, including individual donors, are averse to funding these indirect costs, preferring to support direct program expenses: food for hungry people, medical care for the sick, and childcare for working parents. However, these services could not be delivered if it were not for the trucks that move the food, the computers used for patient records, and the electricity that powers lights and heating at the daycare center.

A study cited by Nobel (2015) showed that individual donors are averse to funding organizations with high overhead rates. “The higher the level of overhead associated with a donation to charity…the lower the percentage of participants who chose to donate to it.” Grantor agencies also eschew funding these necessary expenses. As reported by Knowlton (2016), “…only 7 percent of nonprofits report that foundations always cover the full cost of projects they fund.”

Building the infrastructure needed to properly support an organization as a whole is vital to the entity’s sustainability. In their 2007 Action Guide, Grantmakers for Effective…

To borrow from the song: “Art is a many splendored thing.” Difficult to objectify and quantify. Art is also very subjective. Again borrowing: “One man’s trash is another man’s art.” So, what is the value of art?

Recently, I attended a conference on arts education. At the plenary panel discussion, a woman from the audience, an arts teacher, asked, plaintively, “Why do we have to justify the arts in school? Math doesn’t have to be justified. Science doesn’t.” No one on the panel had a decent answer for her. Her question stayed with me for a long time. I think we have been telling the wrong story. Or more accurately, we have been telling the story wrong.

Impact evaluation in the arts, and its broader use for leaders of any nonprofit, can drive results. Qualitative yet empirically-based impact evaluation bridges the gap left by other evaluative methods providing the context of mission fulfillment for a nonprofit organization. Armed with such data describing the value of the arts for its participants, arts leaders can change the perception that art is merely a luxury to show that, instead, it is a vital necessity to human beings. Only within the last decade has research on the efficacy of evaluating the effects of art on audiences been realized (Brown & Novak, 2013). 

Telling the wrong story

For the past forty or so years, to ‘prove’ the value of the arts, arts leaders, funders and…

A critical issue in the nonprofit sector is staff turnover, often referred to as the nonprofit turnover treadmill. 

According to a survey by Landles-Cobb, Kramer, and Smith Milway (2015), the second most cited reason for staff turnover, behind low compensation, was lack of leadership development and growth opportunity. Experts say a lack of opportunities for young and ambitious workers to advance creates frustration and disillusionment with their career prospects. This problem is compounded by nonprofits’ lack of investment in manager training, leaving nonprofit organizations unprepared for the inevitable succession of leadership (Koenig, 2016). This low promotion rate did not vary by nonprofit size. Larger nonprofit organizations, which have more opportunities to promote from within, are not doing so. This lack of investment in the organization’s future leadership exacerbates the turnover treadmill at a time when nonprofits need experienced leaders more than ever (Landles-Cobb, Kramer, Smith Milway, 2015). 

Selden and Sowa (2015) found turnover in nonprofits to present a significant cost, a reduction in performance, and a threat to their long-term sustainability. When nonprofits fail to invest in their staff, one demonstrable negative impact is high voluntary turnover. Even when employees feel a strong connection to the mission, staff may not stay with that nonprofit if they feel their organization does not invest in their development as a…

Nonprofit organizations have the ability to connect and mobilize individuals. By creating opportunities for engagement, the nonprofit sector is responsible for building cohesion and social capital. According to Frumkin (2002), nonprofit organizations are “ideal vehicles for foraging networks of weak ties that link people together.” Putnam (1994) further illustrates the link between engagement and social capital. He describes social capital as “those features of social organization, such as trust, norms and networks that can improve the efficiency of society by facilitating coordinated actions.” Understanding the benefits of building social capital may be effective in creating a participatory culture.   

Social capital is defined as the “shared values, ideas, norms, and culture [that] shape the kind of political and administrative efficacy that enhances collective action, democracy, and effectiveness in public service delivery” (Kalu, 2010). Existing research identifies gaps in the ways in which community engagement is measured. However, several studies have been conducted on social capital and the benefits individuals can receive from various forms of community engagement. In addition to encouraging collaboration and shared purpose, nonprofit organizations should ultimately aim to achieve sustained engagement and a participatory culture (Atlee, 2009). On the whole, literature suggests that nonprofits play a large role in promoting engagement within…

Within the nonprofit sector, there is a lack of leadership and staff diversity. According to a study conducted in 2011, 86 percent of nonprofit board members are Caucasian (Schwartz, Weinberg, Hagenbuch, & Scott, 2011). The same study reports that the nonprofit workforce is made up of around 82 percent Caucasian, 10 percent African-American, five percent Latino, three percent classified as other, and one percent Asian individuals (Schwartz, Weinberg, Hagenbuch, & Scott, 2011). Katherine Cecala (2016), the current President of Junior Achievement of Arizona, shared research revealing that the human service subsector tends to have more women as a whole, yet Caucasian men tend to hold the majority of the higher-level positions. A lack of leadership and staff diversity poses problems - particularly for human service organizations - because it affects their ability to fulfill their mission. 

Many nonprofits whose missions have a human welfare component are addressing issues that occur as a result of a lack of inclusion and respect for the rights of people who are not part of the dominant culture in America. However, these same nonprofits rarely have leadership and workforces reflective of their mission and the communities the organizations serve. Author Jeanne Bell states, “while the nonprofit sector regularly discusses and addresses programmatically issues of race and class, recent studies reveal a sharp disconnect between our values and our…