- 34% of Americans studied have ‘not too much’ or ‘no confidence’ at all in nonprofits. Only 16% expressed a ‘great deal’ of confidence.
- The percentage of people who feel charities do a ‘very good’ job in helping others has fallen from 34% in 2003 to 25% in 2008.
- 70% say charities waste a ‘great deal’ of money. Only 11% feel they spend money ‘wisely’.
While this news is alarming, the fact that when asked the same questions about the nonprofits in their own town or community, the responses, while a bit better, are not statistically so, and would fall within the margin of error (3%).
These critical and depressing findings can be found in the April 2009 Brookings Institution report: “How Americans View Charities, A Report on Charitable Confidence“, by senior fellow Paul Light.
Couple this with the following from Strategy and Business, published this month by Booz, Allen Hamilton.
The shifts in global output are striking. The International Monetary Fund projects the world economy will have shrunk by 1.1 % in 2009, with mature economies, including the United States, Germany, and Japan, contracting by 3.4% and emerging economies growing by 1.7%. In 2010, overall global growth is expected to hit 3.1%, but China is forecast to grow by 9% and India by 6.4%. Meanwhile growth in the United States is projected to be 1.5%…
So, if China and the U.S. started even at the end of 2008, the result by the end of 2010 is China’s economy has grown by 10.7% and the U.S. economy has shrunk by 1.9%, a differential of 12.6%. Nonprofits are not immune to cascading effects of this global reality.
The article goes on to say that US companies, if they are going to remain competitive must commit to three things: innovation, strategic approaches and operating models aligned with new realities, and cost containment. The consequences for American business of not responding are self evident.
So, when I couple the negative view of nonprofits in general with the downward pressures on America’s wealth building engine, it’s no surprise that for the first time, I am hearing business people (who are in a fight just to survive), local civic and political leaders (with less and less to work with), and heretofore generous individual donors (whose wealth has shrunk markedly) expressing little patience with nonprofits who do little to innovate, maintain their historic business model, and run up ever-increasing deficits instead of containing costs.
Our field must respond. Why? Because if diminished confidence and a shortage of available resources weren’t enough, shifting consumer economics are driving new behaviors (saving vs. spending, deciding what’s necessary vs. what would be nice to have, becoming more price conscious); demographic shifts are influencing preferences (preferring experiences to presentations, wanting to engage instead of simply attend). While all this is happening outside our organizations, inside our organizations, long periods of denial and excess optimism have conspired to create high levels of stress, and in some cases, outright paralysis across the institution. This stress and paralysis is stifling artistic vitality. Time and energy—human capital—gets spent putting out fires, fighting over limited resources, and deciding who to blame.
Well, the good, and the bad news is that no one is to blame, and that we are all to blame, in assuming for far too long that everything could remain the same, while the world shape shifted on us.
Getting started requires courage. First we must stop the hemorrhaging—confront the brutal truths— and decide what’s most important—what’s mission critical; because without cash and without clarity of purpose, there is no future. Once this hard step is taken, innovation is required—challenging openly and honestly the assumptions that got us here, and finding fresh ways to achieve something worthwhile.
Finally, in achieving these two outcomes, we must build an effective and collaborative culture around the unique value that each stakeholder—artist, trustee, manager—brings to the table. By embracing these three responsibilities—priority setting, innovation, and engagement—we can reclaim our vitality—organization by organization, and in so doing, remain a force in assuring our nation’s rightful place as a major contributor to a better world.