Nonprofit Partnerships: Central Indiana’s Secret Weapon

Stories of Change |

Written by Guadalupe Pimentel Solano, Program Director, Herbert Simon Family Foundation; and Erin Tanner, CICF Chief Financial Officer  

Uniquely, the Central Indiana region committed to a robust nonprofit landscape in its earliest years. Over the decades, Central Indiana became home to an impressive number of service-minded, charitable organizations.   

This year, of course, three major challenges have imperiled that landscape: Major cuts to government funding; socio-political pressure around race, immigration and gender; and a volatile market impacting philanthropic giving. Our region’s nonprofits and philanthropic sector are both on high alert.  

While increased philanthropic giving will be critical to the continued survival of many nonprofits in this era of instability, it may not be enough for every organization that experiences funding cuts from government sources.  

However, our region, like few others, can respond to this moment with increased partnership and collaboration. It is not always easy, we know; the CICF Collaborative, itself, is an elaborate partnership among many regional entities, funds and funders. 

But as cliche as it may sound, and as our organization can attest, in this moment we will be stronger as a team. 

 

FINDING YOUR BEST OPTION 

Even as philanthropy works to deploy added resources this year, many organizations will face difficult decisions. For some, there may be no viable alternative but to dissolve a nonprofit.  

Groups will be especially vulnerable if a significant source of funding comes from government grants and no new source of sustainable funding can be located. Sustainability is key, as we anticipate several years of government funding instability.  

Yet, even in this worst-case scenario, the mission can continue through strategic donations of a dissolving entity’s remaining assets to similar organizations or programs. For many nonprofits, that may be spelled out in your Articles of Incorporation. 

Next, and only slightly less painful, a nonprofit can reduce services that it provides.  

Here, an organization may still need to maintain or discover diverse sources of funding due to government grant losses. That funding goes to sustain core services and personnel, along with any current or new revenue-generating efforts.  

 

PARTNERSHIP AND COLLABORATION 

Finally, many nonprofits will find a way to sustain services through cost-relieving partnerships with other groups.  

There are several routes: 

  • Two or more organizations can combine forces and share costs. They might be groups that offer duplicative services in a similar service area; once they consolidate staff and assets, they have lowered costs as well as reduced competition for outside funding. In fact, they may even expand their total geographic reach. If so, that will begin to attract new and bigger funders.  

It’s important to note that even groups who aren’t mission-aligned can still benefit through a partnership. Two or more orgs can share their back office—roles like HR, payroll and IT—since they typically aren’t mission-driven roles. They could also share the cost of a physical location, cutting their operations budget significantly.  

  • Conversely, a larger organization can support a smaller one. For example, think of a neighborhood-serving nonprofit moving under the umbrella of a regional, statewide or even national entity. Often, the advantage is that a smaller organization can maintain many or all its core services while receiving administrative relief.  

Though partnerships can greatly reduce one’s financial vulnerability, there are a couple risks to consider. Organizational cultures can clash when brought together without due consideration; staff hierarchies need to be clearly defined and agreed upon; governance over the organizations and any operating agreements should be made explicit. Even something as simple as a written responsibility matrix can prevent misunderstandings and improve a new partnership. 

In this moment, the Central Indiana nonprofit sector can model the sort of collaboration, generosity and partnerships we may find lacking elsewhere. Just as we tout our region’s sizable nonprofit sector, we can also demonstrate our ability to work together.  

Suggested Resources: 

 

Leave A Comment