The Mid-Sized Nonprofit Squeeze

March 6, 2013

By Michael Alexander

Mid-sized nonprofit organizations may have one of the toughest challenges of all nonprofits.  They are staffed by professionals who need to be paid.  They are not the beneficiaries of a “labor of love” workforce like many of the small nonprofits that often continue to do their good and valued work with heavy reliance on volunteer labor.    And their communities – including donors, patrons, clients and other agencies – expect them to operate with the efficiency of large budget organizations.

Well run large-budget nonprofits can afford to hire specialists and assign them specific tasks.  Mid-sized nonprofits have to hire generalists who end up wearing many hats.  For example, mid-sized nonprofits have one and two person development departments staffed by a lead generalist and, maybe, one or more specialists-in-training.  Our Development Director has to be good at foundation grant writing, working with high-worth individual donors, selling sponsorships, planning and executing broad community-based membership campaigns and report writing among other skills.   All nonprofits believe they are human resource poor (and they probably are) but the mid-sized struggle to keep delivering services at excellent levels so they can attract greater funding and grow with “thin” labor pools .

While growing, they struggle to get as much use out of every dollar that they have; get full value out of every employee they have; and continue to impress all their stakeholders that they continue to be a value to their communities.  Staff burn-out is a constant concern.  Passion only carries an organization so far.

I often say that I am so busy fighting forest fires that I don’t have time to develop a fire prevention plan.   But I have had time to think about some of the solutions that would be helpful to us.  Of late, a number of foundations have invited mid-sized nonprofit board and staff leaders to attend workshops that provide great ideas on how to more effectively use their time and other resources.  We need hands-on, in-office specialists who can help us figure out how to use our resources most wisely, how to break bad habits and how to position ourselves to stay valuable to the communities we serve.

This is also a good time for the philanthropic community and nonprofits to work together to identify ways that certain specialists could be employed by a collective of nonprofits who need certain services but cannot afford to have them in-house full time.   There are times when each of us prefers to have an employer/employee relationship with a critical service provider because we will have more direct control on how s/he performs the duties of the job.

I believe this opens up a great opportunity for the philanthropic community and collectives of nonprofits to work together.  I would love to hear from others about this issue.

Michael Alexander is the Executive and Artistic Director of Grand Performances

6 Responses
  1. Sue Cross says:

    Michael, good post. Curious: what services do you think might be effectively shared collectively? Financial? Procurement? Creative services for marketing? HR procceses? Sue

    • Sue,
      You hit it right with the list of services that I think we could share among a group of non-profits that want to/like working together. In addition to the ones you mentioned, I have thought about such services as I.T., grant/report writing and some aspects of community and/or government relations.

      I don’t know about any good local models for this so there is the concern that initiating this will be time consuming for people with little discretionary time. But I think some quick conversations might be possible among compatible organization leaders that could lead to some “venture” funding to test the concept. Let’s see!!!!


  2. The mid-sized nonprofit is indeed in a tight spot. Part of the problem is when you have a sufficiently complex organization to require a fairly high level of infrastructure support – finance, HR, IT etc. – but you can’t afford it. Program tends to grow incrementally, think of a gently upward-sloping curve, while infrastructure is built in relatively big investments – stair steps – adding a new CFO position for example. The result is something of a constant mismatch. Most of the time the organization will have too little infrastructure for its needs. Then, periodically, it will make a big investment to “up its game” and for a time worry that its overhead is too high. One solution is sharing back office services with other nonprofits. Another is outsourcing technical needs to professional firms so that you only pay for what you need. The ultimate answer is to grow out of this predicament, get big enough to be able to balance your infrastructure needs with your resources. Of course that may not be possible for most midsized groups, but it is a good reason among many to prioritize growth.

    • And adding to our predicament is the fact that once we have a reputation of delivering our services well at a certain funding level it is hard to get enough funders to increase their annual support so the organization can expand its program and more effectively realize its mission.

  3. Good post, Michael. As a caution, though, I would note that most nonprofits (and businesses) believe that if they were only 1/3 bigger or 1/2 smaller they would be fine. Just as all big boards think they should be smaller and all small boards think they should be bigger, we should be aware that sometimes every size has its own troubles.

  4. Richard Stein says:

    Michael, I agree with your points, and particularly the idea of exploring a way for mid-sized (or small) organizations to share resources. Our own organization (Arts Orange County), has been handling an increased amount of outsourced needs of local organizations that either lack the know-how or the staff to execute them. One of the best-know examples in the arts is New York’s Fractured Atlas. We are not sure if that model will work here for the organizations we’ve been talking with, but I do think there is a way to pool resources in a sensible way.

    And I agree with Jan–we ALL think the grass is greener! (:-)

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