Standing Beside Alaska's Non-Profits

The Foraker Group Blog

In our May newsletter we let you know about changes that are occurring in the Pre-Development Program, or what has become known at Pre-D. Pre-D was launched in 2006 with the goal of helping to plan sustainable capital projects – or those that contribute to the long-term viability of the organization and the community it serves.

Pre-D has been supported by the Alaska Mental Health Trust Authority, Denali Commission, Mat-Su Health Foundation, Alaska Housing Finance Corporation, and Rasmuson Foundation.

We want to remind you that even though Pre-D is not accepting new projects, a wealth of information has been gathered over the 12 years of the program and much of it is available on our website. Included on this page is a handbook we developed – Preparing to Fund Your Capital Project in Alaska and Beyond – which is available at no charge.

If you are considering a capital project, please feel free to call us if you have questions about it. We’ll be happy to refer you to people who can help you.

We thank our funding partners and all the organizations that have worked with us for more than a decade to make Pre-D a successful program

Seventeen-percent – that number represents the average of Alaska’s workforce that works for nonprofits. In rural and remote rural Alaska, it can be as high as 40%. Rarely is the sector talked about as an industry, but if we were, we would be the second largest Alaska industry based on employment – right behind oil and gas. The data is compelling for many reasons. One is the opportunity to look closely at what we are doing in the sector to both attract and retain this workforce.

In 2006, Tom Tierney published an article in the Stanford Social Innovation Review called The Leadership Deficit in which he articulated his view of our future as a sector. A key element of that future was a high turnover of Baby Boomers and a serious gap in both the number of Generation X and Millennials and their interest in the work as it was or is currently framed. He warned this was coming in the next decade. Well it’s a little late – perhaps because of the national economic recession – but we are here now.

As complex challenges go, this is a big one and we have been preparing for it on many levels at Foraker. We have focused on retention strategies to support current nonprofit employees to stay in their jobs. At the same time, we have created opportunities for people to explore new skills and the emotional IQ sides of leadership so they could advance in their careers. All of this work can be framed under “Leadership Development,” but for us we know it also has the added bonus of organizational effectiveness, and even greater impact to our communities overall.

In complexity there are also mistakes. For example, we learned the hard way that few like to think of themselves as “emerging leaders” because it diminishes the contributions they are already making. We also continue to clarify the leadership gaps that exist related to executives and board members from diverse cultures and ethnicities. We are diving into these aspects of leadership and look forward to sharing more in the future about ways we can grow together in these areas. In the meantime, we are dedicated to looking at leadership as more than a title, and certainly not something you achieve solely with age.

So, as the “silver tsunami” breaks across our sector as the Baby Boom generation retires, we can evolve to meet the next generations in the workplace. This evolution can mean we find ourselves with far more leaders than job titles or organizational charts convey. The questions then become: How can we support leadership development no matter which chair is occupied? And how do we grow when there is nowhere to go?

How will you answer these questions? What will you do in your role today?

I ask, because a recent article in the online publication Quartz at Work suggests that together we are not doing enough. The writer cites persistent national statistics and studies on the revolving door of leadership. I know budgets are tight but a well-executed retention program and a focus on developing leaders are worth the time and expense. We simply can’t afford not to do it, so let’s do more of it together.

If you are not sure where to start or you simply want to do more, here are my top 10 recommendations to put into practice in 2018 and beyond.

  1. Be loud and clear. If you are the CEO/Executive Director, lead by example to let your team know that their development as a leader is important regardless of their title or seniority. Talk about it in staff meetings and in one-on-one time with employees. Do one of the other nine ideas or all of them. Do it yourself by getting a coach or a mentor. If nothing else, make space for the conversation. Invite the opportunities. Explore the possibilities.
  2. Offer opportunities outside the box. If you are a senior leader, look at your day, week, or month and consider inviting other staff into new rooms and experiences that they likely will not get invited to on their own. Exposure to new ideas and people is important, but so is sharing the larger ideas and the bigger scope of issues and concerns at a meta level rather than the tactical level that they might be exposed to on a daily basis.
  3. Know which room to be in might be the opposite of suggestion number 2 but not mutually exclusive. Sure, you can go to every meeting and be at every podium as a leader but what if you didn’t? Consider how not being in the room allows others on your team to grow, to speak, to learn, and to own their own experience.
  4. Include “heart” questions in your employee evaluation tools. Evaluation should not be a punitive exercise nor should it be focused on deficits (If you are there with an employee, you need an improvement plan, not an evaluation). Consider including at least one goal that is employee driven about how they would like to build on their strengths as a leader – not just in the workplace but in their daily lives. Consider a question and goal that gets to motivation, resilience, or growth. Agree on ways to meet this goal together or by engaging other team members who would see it as a benefit.
  5. Join an affinity group. This is more than networking – leadership is about a supportive framework to listen, learn, and share. It is about a safe space to test ideas and gain new insights, not just exchange business cards.
  6. Stretch to strengthen. Sure, sometimes it is easier to do a project yourself than take the time to engage someone else on the team to have a go at it. But learning by doing and especially learning where real mistakes can happen is golden. There is much wisdom around how mistakes are both information for the organization, for the team, and for the person who made them if the organizational culture truly allows for learning to happen. So go ahead, give away a key project that stretches someone in a new direction. Build on existing strengths, trust the process and the person, and step back to let the process go.
  7. Celebrate the wins. Of all the things on this list, I think nonprofits struggle with this aspect of leadership development the most. We are doing so much with so much pressure to do good in the world that when we get to a milestone or win or cross a finish line we just put our heads down and keep going. Yikes! The next generation on our team has reminded me this is not okay and they are 100% right. Stop. Celebrate. Breathe. Reflect. Recognize the strengths of the team or a personal milestone of one person. Talk about how it makes a difference to the mission you serve. Yea! Okay, now you can go to the next thing.
  8. Allocate annual funding. A lot or a little money is only one consideration to ensuring a leadership development result. Make sure to engage each staff person in picking the right opportunity – one that they are excited about, that builds skills, and that is applicable in many ways to their life and their work.
  9. Create a safe space to connect the dots, brainstorm, test ideas, and critically reflect. Most leaders will tell you that it is lonely at the top and that that there are few safe spaces to think out loud. Journaling might be just the spot to work through your next big idea or greatest challenge.  Want to know more? Check out this article by Dan Ciampa in the Harvard Business Review.
  10. You choose. Not the CEO/Executive Director? What do you need to succeed? Pick one of these and ask for what you want. You might not get it all, but you won’t get any of it unless you ask and fully participate in making it happen.

We may be experiencing a leadership deficit in sheer numbers, but we can all do more to encourage, engage, and expand the leadership potential right in front of us. Nonprofit leaders – we see you. We need you. Let’s take the next step together.

We have two new series for you to take this summer:

Managing Your Nonprofit – The Essential Toolkit
A  webinar series featuring courses on sustainability, human resources, board development, finance, and fundraising.

Are you new to a management position or to the nonprofit sector? Are you looking to apply nonprofit best practices to your workplace? In this series we’ll explore the core framework for running a nonprofit and the elements that will help you to make sound management decisions. The series will include five courses – each two hours in length – to enhance your nonprofit management skills. The fee is $200 for the series; $125 for Foraker Partners.

Learn more here. 

Your Guide to Media Relations: The Strategies & Techniques for Effective Communication
Join us for a webinar series taught by media expert John Tracy. Sign up for all three courses or choose the ones that are right for you. This series will be held on Wednesdays from 1:00 – 3:00 starting on July 18. The fee for each class is $40; or $25 for Foraker Partners.

The Alaska Division of Insurance is working to stabilize and reduce health care coverage costs in the small group market – those employers with 50 or fewer employees, which includes many nonprofits. To develop a clear path forward, the division is surveying small businesses and nonprofit organizations to identify issues and barriers to affordable health care coverage. Foraker supports the state’s efforts, and we encourage you to participate in this survey to help them develop realistic, effective options for improving affordability in Alaska’s small group health insurance market. The deadline to participate is June 30.

Happy Summer, everyone. I bet you were thinking: “there is no better topic to celebrate summer than tax reform.” Right? Well, lucky for all of us, this isn’t as much about the policy of tax reform as about what we need to do to follow the new rules and position ourselves differently for philanthropic success. So pour yourself a glass of iced tea, open the window, and let’s talk.

When nonprofit leaders are asked about what their organization is doing as a result of tax reform, the common response over the last six months has been “nothing.” I understand how that can sound like the right answer, especially if you don’t have staff. However, you really can do things right now to adjust to the new rules.

If you do have staff and you are following the new rules from the IRS – everyone should be nodding “yes” at this moment, but if you aren’t sure click here – you might want to find appropriate ways to check in with your staff on the impact they see in their paychecks. From what we’ve been able to learn, most employees saw an increase in their paychecks when changes took effect in February. However, in some limited cases, paychecks were reduced. If this happened to any of your staff, perhaps you can draw from other options to support them if they are struggling. Often the place our sector shines is in flexibility and support even when that doesn’t look like cash.

Undoubtedly Congress continues to hear from groups on every part of the political spectrum about undoing or shifting or creating new pieces of tax reform. If you are curious about the top 15 or so ways that nonprofits were directly affected, the National Council of Nonprofits has a helpful summary sheet. If you are a small nonprofit, many of the benefits that went away likely never applied to your organization. Still, it is good to keep current and just double-check. Important in all of this, don’t ever give tax advice to your employees, donors, volunteers etc. unless you are a credentialed expert. We all have enough work to do without taking on the role of tax advisor.

Two areas that still have our close attention are the potential to repeal the Johnson Amendment, which protects nonprofit nonpartisanship, and changes that will impact philanthropy. On Johnson, yes I thought we were done, too, but guess what? True, it didn’t pass as part of tax reform legislation – yea! But it is still a current topic. If you want to learn more about why the Johnson Amendment matters to you (even if you have never heard of it) click here, and here. While we will also keep you up-to-date on any new threats to the ability of all charitable nonprofits to stay nonpartisan, I hope you are also remaining alert and ready to call our delegation with your concerns. The National Council of Nonprofits is also tracking this issue so there is one more way to stay engaged.

The other issue we all need to pay close attention to is the impact (both positive and challenging) in philanthropy. Last month we celebrated the fun in philanthropy, this month we need to make sure we are doing all we can to be positioned for success. Before we jump into things you can be doing in your organizations, I want to highlight a new bipartisan bill to expand charitable giving incentives in the House of Representatives. H.R. 5771 would enable all taxpayers to deduct charitable donations from their taxes, regardless of whether they itemize. Unlike the former effort on a universal deduction, this bill does not cap the amount.

In describing the bill, Representative Smith (R-NJ) said “Americans have been generous patrons of charitable causes, and we want to ensure that everyone has the support they need to continue their generosity to charitable and philanthropic causes.” Representative Cuellar (D-TX) added, “This bipartisan bill not only encourages us to help our fellow neighbors, but it also makes sure that taxpayers can receive their due deduction for charitable giving if they choose not to itemize.”

Keep an eye on this bill, and we will too. It has the potential to support Alaskans who want the added benefit of tax relief on top of feeling wonderful about the investments they are making in our communities.

What else can you be doing with or without new legislation? Our message is the same as it was in December: stay focused on your donors. Remember that philanthropy means love of humankind and focusing on the people will bring money, but focusing on the money rarely brings people.

However, being donor focused in the age of tax reform means that we have to do things a little differently for our mid-range and large investment donors. Our mid-range donors likely used to at least consider itemizing as part of their tax strategies. To generalize for them, the use of a tax deduction was likely not a motivator for giving, but simply icing on the cake. While this isn’t about whether you can or can’t itemize, it is about whether there is enough incentive to do it with the new reforms. The best national estimates are that only 5% of Americans are likely to itemize. By comparison, about 22% of Alaskans itemized before tax reform. Mid-range donors who still want to take advantage of itemizing may decide to bundle their charitable giving – meaning that they will give two years’ worth of gifts in a single year. High range investors might do the same. This is a creative strategy that we have already seen play out at the end of 2017 and only expect to see more frequently in the future.

What that means for all of us is that if we have not fine-tuned our recognition strategy, then today is the day. Most of us are used to saying “thank you” and engaging in stewardship after a gift is received. But if your 2018 gifts already were given in 2017, then your methods of engaging donors need to keep up. Consider ways to celebrate and recognize donors who are bundling their gifts.

Options could include:

  • Creating special giving levels or giving circles with mission connected activities to ensure your donors are hearing about the causes and programs they care about even in the years that no gift is given
  • Updating your database to reflect the donor’s choice to give this way
  • Actively engaging in one-on-one conversation with donors about this option – again, not as a tax advisor but as an interested partner in their philanthropic engagement

Ann Hale, local Alaskan and current national board chair of the Association for Fundraising Professionals, created a great tip sheet for all of us with more useful ideas.

For those of you with pledge programs, shifting your recognition strategies won’t be as much a stretch but will still take some creativity. But for the rest of us, we have work to do. Another option that our higher level investors will likely use is the donor advised fund. This is a vehicle to make one large investment that gets carried out over time (often measured in years). Many investment firms and community foundations hold these funds which means that depending on how they get dispersed the gift can look like it is either coming directly from the donor or from another source. Again, good relationships and open communication with your donors will mitigate any potential confusion in how to say thank you and to whom, so just stay alert and have a plan. As a side note to all of these predicted changes in individual philanthropy, be aware that all of the national data is based on itemized tax returns and nonprofit 990s. If it turns out that far fewer of us itemize, our understanding of giving in this country and in our state will only get worse.. This means, now more than ever, you must have a good donor database to know your own trends and see your future. Too many Alaska organizations are trying to do individual donor engagement without a database. Today is your day – for so many reasons including this one – to get started on your database. (Need help knowing what questions to ask when selecting a good donor database – click here.)

Tax reform also had the potential to change the giving of corporations and foundations. While I have no news to report on any significant shift in positive investments for Alaska, I do believe this is a possibility. Again, all the rules still apply in terms of approaching a funder with the question “what can we do better together for our community than either of us can do ourselves?” This is a far more successful strategy than thinking of them as ATM machines who have more money to disperse (trust me – this thinking still exists, although thankfully in less obvious forms). Consider projects or programs that the funder is clearly interested in seeing happen in your community and begin the conversation. It won’t be fast but it could yield a win-win-win for mission, the funder, and the community you serve.

There are so many ways to be great advocates and ambassadors to your staff and your donors as a result of tax reform. This conversation is just one of many. Remember that we are all adjusting together. As we learn new ways of working we will share them widely. We hope you will share your strategies, too.

Happy June, everyone. Tax reform will wait for you to go outside, breathe the fresh Alaska air, and drink another glass of iced tea. When you return, if you need some help, give us a call. We will be ready.

Are you an Alaska nonprofit or tribal leader? Do you want to enhance your management skills and explore new techniques to effectively lead your organization? The Foraker Certificate in Nonprofit Management program features courses developed to apply classroom teachings to your workplace, case studies directly related to issues facing Alaska nonprofits, and a network of fellow professionals to last a lifetime.

Learn the essentials in each of the key areas of nonprofit management:

  • Strategic Planning & Direction
  • Organizational Development
  • Board Development
  • Marketing & Communications
  • Fundraising
  • Public Policy
  • Human Resources
  • Volunteer Engagement
  • Budget & Finance
  • Business Planning
  • Evaluation

Apply today – the deadline to submit an application is June 1, 2018! 

Foraker’s Catalyst for Nonprofit Excellence program is moving to a winter/spring schedule! The application period will open in the fall. Let us know if you want to stay up to date on program details – email Kate Rose at krose@forakergroup.org with your interest!

Foraker has been honored to work with our funding partners – the Alaska Mental Health Trust Authority, Denali Commission, Mat-Su Health Foundation, Alaska Housing Finance Corporation, and Rasmuson Foundation – to bring the Pre-Development (Pre-D) program to Alaska nonprofits. The purpose of the program, which was launched in 2006, is to plan sustainable capital projects, which we define as projects that contribute to the long-term viability of the organization and the community it serves.

“Pre-development” describes the phase of a capital project between the origination of the concept and the initiation of design.  It is the period of gathering information, exploring options, and making decisions about the direction of a project.

Since the program began, more than 100 nonprofits have been part of Pre-D and have gone on to successfully complete a variety of projects across the state including libraries, museums, senior housing, homeless shelters, health clinics, community centers, and domestic abuse shelters. We have worked with organizations, borough governments, and tribes to ensure that each project was well conceived and that it was the right size and scope to meet its mission for years to come.

We want to let you know that for the foreseeable future, Pre-D will not be accepting new project applications. However, we will continue to offer resources on our website and answer any questions you may have. If you are considering a capital project, we encourage you to review a handbook we developed – Preparing to Fund Your Capital Project in Alaska and Beyond – which is available on our website at no charge.

We thank our funding partners and all the organizations that have worked with us to make Pre-D a successful program.

Last week I had two inspiring and unexpected conversations. The first went something like this:

“I love meeting one on one with donors and showing them the results of their investment .It is just so much fun.”

The other one was:

“It is so much fun to connect with potential donors who care so much about mission and help them connect the dots with their philanthropy.”

What was interesting about these comments is that one of these people has been in this work for over 30 years and one is a month into the work. And, what they both know is that fundraising is fun.

Consider now your own experience. Make a mental list of all the things you think are fun in the nonprofit sector and chances are that fundraising is not at the top of the list for many of you. Besides the fact that F, U, and N are the first three letters in fundraising, why is it that this important job doesn’t always (or maybe never) feel like fun?

First, let me say that fun does not have to include cheerleading pompoms or cake, and it certainly does not exclude incredibly hard work. Fun is certainly in the eye of the beholder, but for many fundraising doesn’t even come close to “fine” let alone fun.

I have spent a career being excited about fund development and the philanthropy that follows. Along the way I have seen a few things that may be contributing to the lack of fun. Tell me if you notice any of these things happening for you or your team.

  1. Expectations vs action: If there is one thing that gets us squarely in the “not fun” category it is the feeling that other people are letting us down or not doing what they are “supposed to do.” This seems like a daily occurrence when it comes to what staff think board members should be doing about fundraising and what is actually happening. One reason is that many board members are recruited with a set of verbal and sometimes written expectations (often known as job descriptions). These expectations usually outline some version of 100% board participation in raising money and 100% of the board making individual annual financial contributions. What these job descriptions and conversations don’t do is move from expectation to action. Expecting 100% board giving and never asking gets you – well, failed expectations. Expecting 100% participation but never providing a plan or a specific request to act gets you – well, no action. Moving away from failed expectations to successful action means we have to be clear and be specific in our follow-through. Also remember that follow through should focus on short, achievable tasks that can be accomplished by board members within their level of comfort and time availability. There is no “one size fits all” approach, so customizing plans is essential. Moving ahead in this way connects our expectations to our actions and will put us back on track to find the fun in the team sport called fundraising.
  2. Training vs osmosis: Have you ever tried to be really good at something by just hoping you would be good at it? How about expecting it to be effortless? For some of us, fun is found in doing something well, without too much struggle and just enough challenge. Fundraising can be this combination because it’s a science. Really. You can get a PhD in it. Some of us have made it a career. I have often said this work is about 70% science and 30% art. The art is about being values driven and donor focused and that is hard to teach. But the science can be learned. Still, that is not how we set up most of our teams. Instead we expect that they are magically experts in the science because they are on a board and the nonprofit needs them to be good at it – TODAY. This is clearly a recipe for low fun and high failure. And it happens EVERY SINGLE DAY in nonprofits big and small, mature, and new. Fun and success go hand-in-hand. Commit to getting your team the training they need and make sure it is both motivational and grounded to your mission and values, and that it is rooted in the science of the work in front of them.
  3. Opportunity vs obligation: As adults it seems safe to say that we are less inclined toward fun in a “have to” situation and instead we veer toward “want to” or “get to” opportunities. Fundraising can and often does get placed in the “have to” category. How often have you found yourself feeling cajoled into asking friends and family for money who in turn give because they feel obligated? Unfortunately, this is a regular occurrence. Imagine instead creating opportunities for donors to make choices about how they want to connect, donate, or respond. See yourself as the catalyst for the donor to support a mission they care about. Doing this you create meaningful opportunities that are mission connected and donor focused. Remember, your role as board or staff is not to convince anyone to care, it is finding the people who already care. This approach may help you more easily shift your language, your approach, and your follow through with a donor or potential donor to create opportunities without guilt, or quid pro quo, or any other feelings of obligation – it might be easier than you think.
  4. Negative language vs core values: How is it that we have developed so much negative language around a word that means love of humankind? Philanthropy is about joy and connection, opportunity and investment, and change. It is not about, nor was it ever about, “hitting people up” or “twisting their arm,” or “giving until it hurts,” or even “targeting our donors.” When we combine something that has the potential to be so joyful with words that are layered with harmful connotations, we say much about the way we approach our work. The path from negative language back to fun starts with how we think about this work and then what we say about it. Donors want to connect to the causes and missions they care about. Leading with our core values is a way of making that connection and regaining our sense of joy in the work. We can find opportunities that are mutually beneficial and moments of true understanding. This becomes possible when both our language and actions express our values. Then, selecting tools and tactics becomes easy.
  5. Tactics without a plan: I have said this before, but this list would be incomplete without saying it again. Fundraising without a plan ensures a lot of energy expended for little result. It means a few people doing a lot of work instead of creating a team and working together. It means lots of tactics with no strategy. It means low donor retention and lots of entry level gifts. It means low success and, yes, it means no fun. Plans don’t have to be complicated or complex but they do have to generate energy, engage the team, and be deeply rooted in values. And the best of our plans are building fun into every major step. (To learn more about a fundraising planning click here).

I’ve just outlined five ways – but there are more – to shift our work toward generating the fun in fundraising. In each of these experiences there’s opportunity to shift and reframe our approach. The time could not be better to bring our team together, focus on mid-level, major, and planned gift donors, and perfect our recognition and stewardship plans. Finding our fun means starting with ourselves. As a CEO it means instilling a positive culture of philanthropy throughout the organization and in each and every donor engagement. As development staff it means ensuring the approach has as much “why” as it does “what” and “how,” and that it means bringing small and manageable options for success to the rest of the team. As a board member it means getting the skills, finding your comfort zone, committing to values, and focusing on donor relationships. For all of us it is a reminder that while we may each define fun in our own way, together we can create a space where donors find meaning and the possibilities are endless.

Alaska’s nonprofit sector represents a wide variety of organizations that provide public service and have an impact on the lives of nearly everyone living in the state. Although most Alaskans do not think of nonprofits as an economic powerhouse, you know that we play a critical role in the state’s economy both as major employers and as revenue generators. No industry in Alaska can prosper without the nonprofit sector. We provide both a financial and social return on investment by leveraging public and private resources. We are part of the healthcare, utilities, fisheries, and oil and gas industries, and provide essential services such as firefighting, early child care, basic utilities, housing, and food security — just to name a few.

Nonprofits are the safety net across Alaska. Every Alaskan is the beneficiary of a nonprofit because our work is woven into the fabric our communities. At the same time, nonprofits can’t do all that needs to be done with diminishing support — financial or otherwise. When policy makers make financial decisions, create rules and regulations, or develop programs, we are consistently urging them to remember that every dollar cut from the nonprofit sector will result in higher costs in the long run. Indeed, each decision has an impact on the health of the sector and, thereby, the wellbeing of every Alaskan. It is a challenging time in our state — our resources are limited, our safety net is thin, and the tendency to cut rather than invest is high. Today, we can change that story.

Part of changing the story is to gather and share new and better information. To that end, we are excited to present the latest research on the economic impact of Alaska’s nonprofit sector. Every three years we embark on this analysis to better inform policy makers, industry, and nonprofit leaders about Alaska’s nonprofit sector. This is our fourth economic impact report. It required an enormous amount of research to produce because no single source exists for comprehensive data on the sector at either the state or federal levels. We are confident that we are using the best and most trusted sources available for both raw data and research from the field. Those sources include the IRS, State of Alaska Department of Labor, U.S. Census Bureau, National Center for Charitable Statistics, Institute of Social and Economic Research, and our new partners at the Center for Economic Development, a program of the UAA Business Enterprise Institute. The data in this report is from 2015-2016, the last years when complete data sources were available. While we make every attempt to replicate the data from one report to another, the data sources do shift as better information is available.

New this year, the main report is written specifically for policy makers. This allows all of us to use the information with those who are making decisions about federal, state, and local government funding and policies that impact the sector. As a nonprofit leader, we want you to use this report in your work and in your conversations. For this purpose, we hope you will read the full report and spend some time with it. We are taking this report and additional information around the state to meet with nonprofit, business, and government leaders and, I hope, with you. Until then, here are some highlights.

Of course, we know people are curious about how many nonprofits we have so… drum roll… we now have 5,765 nonprofits in Alaska. In our last report, we noted that the number of nonprofit organizations in Alaska had fallen significantly between 2007 and 2013. In large part this was the result of a 2010 IRS rule that disbands nonprofits if they fail to submit the tax form 990 for three years in a row. (Note: religious congregations are exempt from this filing requirement.) While continued enforcement of the three-year rule is resulting in nonprofits dissolving, the introduction of the IRS nonprofit filing form 1023 EZ in 2014 simultaneously made it easier to form a nonprofit with roughly 99 percent of all applications accepted by the IRS. These two trends are offsetting each other, resulting in flat growth. New data shows that between 2013 and 2016, the total number of nonprofits in Alaska stayed about the same at roughly 5,700 organizations. Of these, the number of 501(c)(3) organizations decreased by about 350, offset by an increase in other nonprofit classes. The result is that one nonprofit exists for every 130 Alaskans as of 2016, compared to one for every 100 residents in 2010.

Far more important than how many nonprofits we have in our state is the impact of what they do. Given the state of Alaska’s economy, nonprofits are making changes today to increase that impact– becoming more creative, spurring innovation, and looking for efficiencies. In this report we highlight five ways that show how we’re doing our part.

  1. Nonprofits are a significant source of Alaska jobs. We often lose sight of this because nonprofits are not considered to be a single industry. When the state tracks jobs, it classifies them by industries – oil and gas, tourism, healthcare – not by the sector where the work originates – nonprofit, government, or for-profit. In fact, all three sectors are integrated, and a vibrant nonprofit community helps generate jobs, both directly and indirectly, in all the state’s industries. When nonprofits spend money on supplies, services, or payroll, it circulates around the state creating more jobs for Alaskans and their families. In 2015, nonprofits accounted for 17% of all employment in Alaska compared to 10% nationwide. The nonprofit sector directly employed 44,092 Alaskans. Counting indirect and induced effects, nonprofits were responsible for sustaining 66,700 jobs in the state. These jobs translate into $3.8 billion in total income generated by the sector that ripples through our communities.

If nonprofits were treated as their own industry, they would be the second largest source of non-government employment behind oil and gas in Alaska. Nonprofits are the largest source of employment in many rural communities. In three rural census areas in Western Alaska, nonprofits make up over 40% of all direct employment. Alaska’s major industries — oil and gas, mining, seafood, and the visitor industry — all benefit from nonprofit organizations. Industry and trade associations, convention and visitor bureaus, oil spill response organizations, and aquaculture associations are some examples of nonprofits making Alaska’s industries stronger.

 

2. While Alaska’s nonprofits are resourceful and innovative, and many struggle to meet the increasing demand for services as state and local governments cut programs and federal funding remains flat. Nonprofits are doing their best to carry out their critical role in the community. Their use of earned income, private philanthropy, and limited public resources is judicious. Every day nonprofits work to maximize and leverage each resource. This is a public/private partnership that must continue.

 

 

3. Nonprofits work hand-in-hand with government to deliver essential services. Federal, state, local, and tribal governments often contract with nonprofits to perform key responsibilities efficiently and effectively. Particularly in rural and unincorporated areas, nonprofit organizations deliver a variety of public services that are normally associated with government – like public safety, water and sanitation, fire service, and workforce development. This social safety net strengthens the fabric of Alaska communities. This is the time to infuse government resources into nonprofit organizations to maintain critical public services.

 

 

4. The economic engine of philanthropy from foundations, corporations, and individuals coupled with Alaska’s high rate of volunteerism has a powerful influence on programs, infrastructure, education, and jobs across Alaska. At the same time, local, state, and federal policies have a profound impact on philanthropy as does any financial investment from government. Each donation leverages another. We need to be realistic and excited about the possibilities for growth, while understanding that philanthropy alone cannot replace the role of government. To increase Alaska’s civic engagement and private investment, we need to work together to encourage — not stifle —philanthropy of all kinds.

 

5. Prosperous economies and healthy communities create a rich quality of life. As a partner to local governments and industry, Alaska nonprofits provide essential services like medical care, housing, and utilities. Nonprofits also bring us joy and purpose through art, religious and cultural expression, education, and recreation. Let’s celebrate nonprofits for caring for our people, our pets, and our planet. Together, we can foster healthier and more prosperous communities.

 

 

Nonprofits, like all other businesses, want a stable and healthy economy that ensures all of our communities thrive. Together we have an opportunity to strengthen the state through the nonprofit sector. As nonprofit leaders, we must be ready to work together to further strengthen what is already strong, and redesign what needs work. We must partner with government, business, and with each other to ensure healthy missions.

Again, I encourage you to use this report to stand for your mission and stand for the sector. Specifically:

  • Use the data to better understand the economic impact of Alaska nonprofits. Then do the math and apply the data to your own organization.
  • Use the stories in the report as a reminder that the sector is a place of innovation and opportunity if we nurture rather than stifle it. Then write your own story.
  • Engage with each other as nonprofit leaders and with government and industry partners in finding solutions to our common challenges and strengthening what works for Alaska. Then do it again and again.
  • Use your position and your voice to stabilize our safety net, secure points of leverage, and collaborate to maximize our resources. Then engage your team to do the same.
  • Ask for a stable, long-term fiscal plan for Alaska to ensure a vibrant place for all Alaskans to work, grow, and engage. Then celebrate.

Alaskans love to be unique, and this report highlights all the ways we can be proud of our work and of our impact on the state. I know each and every day, for every amazing story that we tell, there are unceasing hours of labor, determination, and perseverance. We know that great missions require intentional effort. We don’t always get it right, nobody does. What we hope for at Foraker is that we are learning, growing, and putting our tools to work. This report is one of those tools. We look forward to hearing how you use it.

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