A New Series of Articles and a New Approach
In the past, we have written numerous articles based on the national research we think has relevance in Alaska. I have been amazed at how many people report having read these articles and how many have commented on their usefulness. I hope the next series of articles will be as useful, even though we will intentionally make them short and to the point. We will spend less time with expert opinion from Outside and focus on the “facts, just the facts” as we see them.
One reason for the new approach is to reinforce some of the key concepts expressed in past articles. More important, we hope to attract new readers in order to increase discussion on some large and complex issues facing our sector. Quite frankly, after eight years of spreading the word on effective nonprofit management, it sometimes feels like we are pushing some concepts up a very steep hill, on ice, and with a 100-mile-an-hour headwind.
You may disagree with some of our thoughts. If so, we encourage you to let us know. We also appreciate any insight you may have. Through such interaction we continue to learn, and at The Foraker Group, we want to learn all that we can.
The reason for some urgency to encourage this discussion is that I believe the nonprofit sector in Alaska is at a critical juncture. We need to be clear about who we are and how we operate. And we need to use the tremendous support we have enjoyed up to now so we can continue to thrive during the next decades.
The ISER (Institute for Social and Economic Research at UAA) study provided useful facts on our sector’s strengths and vulnerability. I have presented these facts to over 1,000 community leaders around the state in 20 communities at local Chamber and Rotary meetings. We published a detailed summary of these findings in our newsletter, as well as continue to provide a link from our site to the entire study for anyone’s use.
The summarized findings were:
- The sector employees over 30,000 people, 10% of Alaska’s workforce and more than the national average – this percentage is even higher in rural Alaska.
- The total sector – including charities (501(c)3’s) and the remaining 26 IRS classifications – is comprised of 6,000 organizations, one for every 115 Alaskans, one for every 77 adults – more per capita than any other state.
- The total nonprofit expenditures are $3.4 billion — $2.4 billion from the charitable organizations, the remaining one billion from the other IRS classifications.
- Alaska’s charitable organizations depend much more than others in the nation on contributions from foundations (approximately 20% in Alaska versus 12% nationally) and corporations (approximately 20% in Alaska versus 4% nationally). The inverse is that charities in Alaska depend less on individual giving (60% in Alaska versus 83% nationally).
- In addition, governmental funding comprises two-thirds more of the funding for charities in Alaska than it does Outside.
We are concerned about these findings because our state depends on the nonprofit sector to provide critical services and enhance the quality of life for all Alaskans. Yet:
- If we have one nonprofit in Alaska for every 77 adults, how do we encourage enough adults to get engaged at that level in their community? All research indicates the health of an organization is directly related to the competence of its board – where we will find sufficient board leadership?
- Another concern about the density of organizations is that with lower salaries and benefits, where will the next generation of leaders come from? This is especially troublesome when every industry in Alaska will compete for skilled workers as a result of the smaller number of people in Generation X compared to the Baby Boomers? (44 million Generation X’ers/81 million Baby Boomers.)
- Total philanthropy includes corporate, foundation and individual giving. National data shows that 25% of 501(c)3’s income is derived from philanthropy. But in Alaska, we raise only 9% of our budgets from philanthropy, and overly depend on corporate and foundation giving which has historically been less sustainable. Since individual philanthropy can become a sustainable source of revenue, what can we do to grow philanthropy in Alaska? A Boston College study last year found that our citizens with the most income, over $200,000 a year, give less than in any other state.
- And finally since governmental support for charities in Alaska is significantly larger than Outside, what can we do to depend less on government funds that will likely decline because of the current political climate?
Not all is lost. We have some amazing progress in our sector including:
- The growth of the Rasmuson Foundation with annual contributions now nearing $30,000,000! (Every state should be so lucky.)
- A dynamic and growing Alaska Community Foundation with almost $38,000,000 in assets and an initiative to develop local community foundations throughout Alaska
- The opportunity to grow individual philanthropy with the recently passed Permanent Fund Dividend Contributions Program. We have a real opportunity, thanks to the vision of the Rasmuson Foundation, for supporting this effort.
- The growth in skilled development directors who are starting the long-term but necessary work toward sustainable development plans in their organizations
- A sector full of social entrepreneurs who are thinking in new ways and seeking solutions to these potential problems
Peter Brinkerhoff, a national nonprofit leader, spoke at our first Foraker Leadership Summit in January. He had a simple saying that reinforces some of these thoughts. First he believes in our sector’s good works, but he warns, “It’s about mission, mission, mission; but no money, no mission.” In Alaska we have the resources and the tenacity to have it all, so let’s do it.