Ten Things We Don’t Know About Nonprofit Systems

March 30, 2015

By Denise Tom

The nonprofit system in Los Angeles County has an identity problem. If you Google it, you won’t find much there. In today’s digital world, if Google can’t find you, you’re not “trending” and therefore not worth people’s attention. So here is a list, a la BuzzFeed, of the 10 things we don’t know about nonprofit systems, in no particular order:

1. What impact does the nonprofit sector have on the economic and social well-being of the society it serves? We’re not sure, because marketing itself is not a high priority of a sector that is too entrenched in the challenging work that government can’t do. Some in the sector also feel that marketing contradicts a mission directed at something more than self-interest.

2. Why isn’t systemic change part of every nonprofit’s mission? If it was, that premise alone might propel them to collaborate more to find solutions. They would look for interdependencies and partner up more with other nonprofits and across sectors to find leverage points to help create change.

3. Why can’t nonprofits and funders get past the “power dynamic”? If they approached each other as equal partners, each needing the other to fulfill their missions, they would be able to find what Nancy Olson of Southern California Leadership Network calls a “triple bottom line,” the sweet spot that connects the two with the needs of the community.

4. Why do people still start nonprofits? If they knew that there are 30,000 nonprofits in Los Angeles County — most of them with annual operating budgets of $100,000 or less — competing for limited foundation and corporate dollars and with missions that cover the gamut of issue areas, they might instead serve on a board, volunteer, contribute financially or get involved in some other way.

5. Are funders listening as much as they should to the nonprofit sector? Yes, funders hold the purse strings and regularly participate in panels at which they share their funding priorities and processes with nonprofit organizations. (See No. 4) But there needs to be more of an intentional effort to have real conversations about strengths, weaknesses, opportunities and threats to the nonprofit system, as well as how nonprofits and funders can work together on shared goals to solve a particular problem.

6. Can we better understand the business models of nonprofits, which are unique to each organization? Funders need to know not only the mission and goals of the nonprofits they support, but also their business strategies and the rationales behind how they create, deliver and track the value they provide to the community. Nonprofit leaders need to ensure their staff members are armed with that same knowledge, so that they understand how their business models lead to their missions.

7. What are the organizational cultures of nonprofits, each of which has its own set of values, norms, beliefs, assumptions and work habits? Understanding why and how nonprofits work will lead to a deeper knowledge about the challenges they face in effectively fulfilling their missions and sustaining their operations. Only then can funders and nonprofits work together to strengthen the sector.

8. Why do organizations spend so much time and effort solving the wrong problems? Is it because they have been in operation a long time and have not diverged from what is expected and what has worked in the past? Is it because they are focused on activities rather than outcomes?

9. What is a nonprofit system? Google aside, we still don’t really know. That’s because the nonprofit system doesn’t see itself as a system and therefore doesn’t see the whole picture of how it connects with and interacts with other systems, like government and business. And what are the right outcomes? Will they lead to systemic change? Perhaps the larger questions are: is the work they do relevant, and do they have the ability to evolve to stay relevant in rapidly changing times?

10. Finally, does the nonprofit system have the ability and the will to think in an increasingly systemic way about problems that need to be solved? Does it have the discipline to spend the needed time to diagnose problems rather than jumping straight to intervention and solutions?

The answer to all of these questions is “we don’t know.”

But here’s what we do know: organizations today are increasingly cooperating, coordinating and collaborating on their own across sectors — sharing thoughts, knowledge and expertise about problems that need solving. They are working together because they know that collaboration with a shared purpose, as muddled as it can be at times, promotes teamwork, deep listening and accelerates change.

And that’s worth knowing.

Denise Tom is the program manager for health care at California Community Foundation.

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