Navigating Change in the Nonprofit World
Kate Barr

Navigating Change in the Nonprofit World

Kate Barr of Propel Nonprofits says organizations face demographic and funding shifts as well as workforce shortage and governance challenges.

Propel Nonprofits was formed in 2017 by the merger of the Nonprofits Assistance Fund, known principally for its loan fund and financial consulting, and the Management Assistance Program (MAP for Nonprofits), which provided nonprofits with planning, board development, and other consulting support.

The merger enabled Propel, the region’s leading nonprofit service and consulting organization, to provide what its leadership describes as “a holistic approach to services that meet a large set of nonprofits’ needs, including the ability to more closely link strategy, governance, and finance and to support nonprofits throughout their organizational life cycle.” Propel serves Minnesota, Wisconsin, Iowa, and North and South Dakota.

In an interview, Kate Barr, Propel’s dynamic president and CEO, describes the trends and challenges that her organization’s staff members are discovering based on their frequent and deep interactions with nonprofit clients.

What nonprofit themes are you seeing emerge based on your work at Propel?

The big overarching headline that I would use for what we’re seeing is “navigating change.” Navigating change is nothing new for nonprofits. The driving force right now is both what I’d call the force of change and the pace. It’s faster and more intense. There’s not only one area changing, everything is changing at the same time.

One of the challenges that this raises, and one of the reasons that nonprofits often come to us, is that they’re seeking external advice, guidance, or capital, because they’re starting from a place where they are already vulnerable in some way.

Some of this is systemic, because of the long history of nonprofits being undercapitalized. Change is easier to navigate if you have some money. But it’s not only money that’s needed, it’s also time.

Governance is another area where we’re seeing a lot of questions, where nonprofits are doing a lot of work. Some of this is based on whether [the model that] we have all accepted as the standard nonprofit governance model is actually serving the sector. That is actually fascinating.

What would an alternative look like, or rather the continuum of alternatives? There is not one kind of nonprofit board that works. Some of what we see are the bread-and-butter basics, a question like, “What should the board do?” But the actual model itself is what we’re seeing questioned; there is more exploration and conversation about this.

What about emerging or nascent trends? What do you think we’ll be paying more attention to in the future?

Here are the main ones we’re thinking about: The first is demographics. The size of the older population is growing, and that is affecting nonprofits as service deliverers, as employers, as users of volunteers, and as recipients of donations. Just as big are changing demographics in terms of the diversity of the community. We hear many more very real conversations about where power is, where authority is, who gets to decide things. It’s an important conversation and it’s growing. If we actually want real equity, then power [distribution] has to change. And I think that we’re seeing that in evidence at nonprofits. I think that this is one of the big pressures on philanthropy right now as well.

Then there is the economy and a very challenging labor market. The growing economy is affecting compensation, in a good way I think ultimately. But in the short term it’s hard when nonprofits need to pay more. Within the workforce of nonprofits, there has been longtime acceptance of underpayment. So this is a real shift.

Policy work has become more difficult. In the past what anyone would consider rational, reasonable compromise solutions are really hard to do now because solutions are less likely in our partisan political environment. Ten years ago, you could have an advocacy agenda that had to do with a policy around something, especially at the state level, that’s a solid middle-of-the-road solution and everyone could support it. But you cannot do that anymore.

We see significant trends around engagement—how nonprofits engage with their supporters, donors, and audiences is changing. Nonprofits need to approach relationships so that they’re “sticky.” We know that feeling connected is important, and there is a lot of experimentation in nonprofits now. It’s not just having a Facebook page; it affects every area of practice.

And, finally, technology is changing so fast. In a business, there’s a substantial budget line every year for technology knowledge and it’s part of the business because it’s essential in order to make business efficient and productive. Where do you put those costs in a nonprofit budget?

How should business leaders think about nonprofit issues?

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I would like there to be a pledge for business leaders to never again say the phrase, “Nonprofits should operate more like businesses,” and rather to understand that the nonprofit sector and the private sector and the public sector are distinct and different.

They all have roles and they’re all valuable and all completely interdependent. It’s the classic three-legged stool. Nonprofits are not broken businesses. They’re different. So let’s all take the pledge and never say that again.

Sarah Lutman is a St. Paul-based independent consultant and writer for clients in the cultural, media, and philanthropic sectors.