Statement of National Council of Nonprofit Associations

Thank you for your attention to the critical issue of charitable organizations’ service to diverse communities and for the opportunity to provide information on this topic. On behalf of the National Council of Nonprofit Associations (NCNA), we are pleased to submit comments in reference to the committee’s hearing, “Charitable Organizations and Diverse Communities.” 

The National Council of Nonprofit Associations (NCNA) is the network of 42 state and regional nonprofit associations serving over 22,000 members. NCNA links local organizations to a national audience through state associations and helps small and midsize nonprofits:

• Manage and lead more effectively;
• Collaborate and exchange solutions;
• Save money through group buying opportunities;
• Engage in critical policy issues affecting the sector; and,
• Achieve greater impact in their communities.

NCNA’s network of state associations provides direct assistance and builds capacity for the nonprofit sector. They understand the challenges nonprofits face daily as they work to serve and respond to the needs of diverse communities. It is with direct experience and information from those on the front lines that we offer our comments to the question at hand.

We appreciate the comments from our colleagues in the field that testified on September 25, 2007. Their issues and recommendations are important. However, what was missing in the testimony was the extent of the problems facing charities trying to reach diverse communities and the urgency of the problems they are confronting. An overwhelming majority of charities (70%) have budgets of less than $1 million. Because of their size, the challenges they confront are overwhelming, especially in terms of demand for their services.

America’s nonprofit organizations are on the front lines of the battles against society’s most pressing problems: drug addiction, AIDS, homelessness, hunger, illiteracy, crime, immigration, civil, and voting rights. Nonprofits provide care for our most vulnerable citizens – the young, the sick and the aged. Government has cut back funding for these essential services and left the nonprofit sector holding society’s safety net. Nonprofits are reaching out to businesses and individuals to fill the gap left by government disinvestment, but even with the best will in the world—and Americans are extraordinarily generous donors and indefatigable volunteers—charitable donations and volunteers alone cannot do the job. To keep the safety net strong we need a partnership of the government, business, and nonprofit sectors working together for the public good.

 From the perspective of the small and often unheard nonprofits we offer the following general observations in three areas: budget constraints, relationship issues and proximity problem.

Budget Constraints: Direct and Indirect Funding Opportunities are Insufficient

Fewer dollars are directed to organizations serving diverse communities, both from organized philanthropy and individual giving. Organizations serving diverse communities are likely to be located within the communities they are serving. They are grassroots and tend to be small. Because they are not part of a larger, heavily funded entity, they must rely upon the generosity of individuals to support their programs. The complexity and requirements of applying for public funds is often out of the reach of these small organizations. Many public funding programs require matching grants or require an organization to “front” the payment of services while awaiting reimbursement. These smaller organizations do not have the resources to cover the costs of delivering much needed services while awaiting reimbursement or payment for services rendered.

There are numerous examples of larger, more established organizations seeking to partner with grassroots organizations that have access to diverse communities. Such partnerships between these large, well-funded organizations and smaller, locally-based groups seldom involve adequate transfer of funds to support the local group;s work. In many cases, these larger groups operate on a national level and devolve the outreach efforts to a grass-roots local nonprofit. While the underlying premise–that an indigenous organization familiar with the needy population may be better-positioned to address that need–is sound, the operating costs required to perform this service are not fully appreciated.

Relationship Issues: Government and Small Nonprofit Partnerships are Embryonic

Historically speaking, small nonprofit organizations have very little direct partnership experience working cooperatively with larger governmental structures. While familiar with the protocols of town and/or county operations, these levels of government often function differently from national agencies. Additionally, federal-level government agencies seek assurances of quality service and sound guiding principles before funds may be directed to these small nonprofit groups. 

Small nonprofit organizations possess the ability and know-how to serve their communities. They are often doing the most innovative and exciting work. If an inability to serve does exist, it likely stems from limited or restrictive funding. However, the front line nature of these small organizations puts them face-to-face with pressing problems, voiced by communities in need. Unlike a silent stack of regulatory forms, hungry mouths cry for attention and small nonprofit groups try to do what they know to be right - they respond. They direct their money at people, not paperwork. Unfortunately, this does little to establish trust – in either direction – or a track record which the federal government may use as justification for expanded funding. Restrictions on public or philanthropic funds often do not provide the flexibility that allows front line nonprofits to deal with the most pressing issues at hand.

Proximity Problems: Federal Government is Buffered from Causes and Suffering

As noted above, the distance between the federal government and some of the underserved diverse populations shrouds the urgent needs of these communities. Letters and emails expressing the critical need for funding do not command attention in the way that the unblinking eyes of a hungry child motivate immediate intervention.  Ringing telephones do not resonate with the same solemnity as the knocking of a single mother at the front door of the small community shelter. Despite the commitment and concern of government officials, lawmakers, and leaders, the isolated nature of these diverse and underserved communities makes it difficult for those in Washington, DC to truly appreciate the urgency of these problems.

Another distance, also of great concern to those who strive to improve the ability of nonprofits to serve diverse populations, is the growing gap in service levels between well-served (high-profile, accessible) populations and these diverse (largely minority, heavily rural) groups.  Efforts to connect nonprofit organizations with needy populations should, in theory, use a blind eye in evaluating who amongst the disadvantaged receives critical, life-preserving aid.  But in the current situation, where our eyes are not trained to recognize all who require our attention, judicious oversight is sometimes necessary.  Indeed, to ensure that such blindness does not enable discrimination but rather prevents prolonged inequality, money must be raised for the exclusive purpose of serving diverse communities.  The responsible use of charitable funds transcends “how” it is used to include “who” it helps.  Our awareness of the “who” is incomplete, rendering our efforts, no matter how noble, inefficient.

In summary, we agree with the intent of the hearing that developing a plan to serve diverse communities is important and beneficial to the well-being of our entire country. We encourage the committee to consider the budget, relationship and proximity constraints inherent in serving diverse communities when making future recommendations. We appreciate this opportunity to share our perspective and observation and welcome the chance to continue to inform this very important dialogue.