Charities struggle with a unique set of problems
In the aftermath of hurricane Katrina, when many government agencies were slow to respond, the American people working through nonprofit organizations rushed in with food, shelter, clothing and manpower. It was an example of the nation’s can-do spirit at its finest.
Major disasters such as Hurricane Katrina and the terrorist attacks of September 11, 2001 shine a bright spotlight on nonprofit, charitable organizations. But the fact is a large and diverse nonprofit sector is hard at work every day. And, it is a rapidly growing sector as more and more Americans see the limits to what government can accomplish and, as we have throughout our history, find ways to get the job done ourselves.
According to a 2005 study commissioned by the Pennsylvania Association of Nonprofit Organizations (PANO) and a number of other key players in the sector, 634,098 Pennsylvanians are employed by the nonprofit sector. They comprise 11% of the state’s total workforce and account for more than $21 billion in annual payroll.
By virtue of both the important services they perform and their financial impact on the economy, nonprofit organizations are vital to the overall economy of both Pennsylvania and the nation. But, two recent reports indicate the sector is struggling with its image, and it has a specific problem when it comes to attracting and retaining qualified executives.
A report entitled Ready to Lead? Next Generation Leaders Speak Out found 69% of nonprofit employees responding to a nationwide survey feel they are underpaid. The report indicated two-thirds are concerned that they can not work their entire career in the nonprofit sector and be financially secure in retirement.
The report’s co-author, Patrick Corvington of the Annie E. Casey Foundation told the Washington Post: “Next generation leaders are finding ways to get involved in social change and do good work, but they’re finding ways to do that outside of the (nonprofit) sector.”
Pennsylvania nonprofits are also feeling the pinch. The Lincoln Institute of Public Opinion Research, Inc. in conjunction with PANO recently conducted the 2008 Pennsylvania Charitable Organizations Survey. That survey found 45% of the responding nonprofits are having difficult hiring/retaining staff. Fifty-one percent said the biggest reason for the staffing problem is that nonprofits usually offer lower salaries than for-profit organizations.
In addition to organizational difficulties, the nonprofit sector is also suffering from identity concerns. A succession of high profile scandals and problems at leading nonprofits has caused a trust issue in a sector that depends on the trust and confidence of givers to fund their operations.
The 2008 Pennsylvania Charitable Organizations Survey found 75% of the nonprofits polled rated the public’s level of trust at “medium.” Just 15% rate the level of public trust in charities as “high,” and 10% said the public has a “low” level of trust in their efforts.
Joe Geiger is the executive director of PANO. He said the dip in trust in the sector is directly attributable to the recent scandals. “When a high profile individual or organization behaves badly, it creates doubt about how others are behaving,” Geiger explains. “Overall, the charity sector is highly ethical and efficient in the delivery of their mission.”
Geiger is correct when he says Pennsylvania nonprofits are being “efficient in the delivery of their mission. And therein lays the good news in the survey. Thirty percent of the nonprofits said they are better equipped to fulfill their organization’s mission than they were in recent years, while only 21% say they are less effective.
Helping nonprofits fulfill their missions is the fact funding has increased over the past year at 35% of the nonprofits surveyed, remained constant at 42%, and dropped at 20% of the organizations. Over half of the nonprofits say they expect to raise more money in 2008 than they did in 2007.
While much of the nation’s attention is focused on the ills of the for-profit sector, nonprofits continue to struggle with their own set of unique issues. Fortunately there is a deeply imbedded component of the American psyche that compels us to support charitable organizations financially and otherwise. Thus, despite the challenges, the sector continues to be a vital part of our society.