Standing Beside Alaska's Non-Profits

Happy New Year – 2010

As you read this, I am spending some time with my family on a much-needed break from my hectic schedule. Still, at the beginning of this New Year, we want to share our sense of fulfillment for the amazing journey we’ve been on for the past nine years – thanks to you. While we have traveled many miles and been to over 200 communities, it seems like just yesterday – actually it was January 2001 – when Ed Rasmuson held a press conference announcing the formation of The Foraker Group.

We truly had humble expectations of what we could accomplish. Our business plan was based on the assumption we would generate enough earned income to be self-sufficient with earned revenue within five years. At least that’s what we told our funders we would do. That goal was truly audacious. We had no clue if anyone would actually pay for the services we would provide. We had hopes they would, but frankly, before Foraker most nonprofits in Alaska were very skilled at getting free consulting help from volunteers at our larger businesses. These volunteers would train our boards or lead strategic planning sessions. The only exceptions to this practice seemed to be the larger organizations or affiliates of national organizations – and even those worked as hard as they could to pay nothing.

In addition, while we had done the research that said nonprofits might actually use shared services such as finance or human resources, it was not a common practice in Alaska, nor anywhere else in the country. Granted, we had many significant institutional donors that were willing to bet on these untested theories, but just think about that for a minute. What if we had failed? What if all those grand schemes were just delusional thinking? Many people would have felt betrayed, and I bet I would have had to leave the state.

Well, nine years later, we’re still here. I recently read the original business plan as well as some of our notes from the first board meetings. It is amazing how many of those untested concepts we have now put into practice. But to be honest, we never planned for, nor hoped for being as large as we are today. Our original vision was to be a very lean staff of full-time employees, and to bring in contracted consultants to do most of the work.

In the beginning, that is what we did. In fact, I was originally a shared service CEO myself – leading Foraker, continuing as CEO at the United Way until early 2003, and from 2000 through early 2002, serving as exec for the Alaska Community Foundation. When Laurie Wolf joined Foraker in December of 2001, the Foraker offices were on the side of my desk at United Way, where Laurie and I shared everything for many months. We developed a great partnership with Cook Inlet Tribal Council that provided the shared financial services for our Partners. We had a few, very skilled consultants; primarily refugees from the oil industry like Steve Mahoney, Mac McCoy, Joan McCoy, Suzanne Lagoni, Todd Allen and Alan Kajikawa.

But soon some of our original ideas could not be sustained. Demand was far greater than anyone had anticipated. The money flowing into our sector from the newly enlarged Rasmuson Foundation coffers, as well as the Charter Agreement Phillips and BP had signed with the state, greatly increased private sector funding. At the same time, quasi-state agencies like the Alaska Mental Health Trust Authority and Alaska Housing Finance Corporation ramped up their funding – and federal agencies like USDA, HUD and the Denali Commission increased support, especially in rural Alaska. I am not sure if nonprofits really wanted what we had to offer as much as the funders’ wanted to ensure their increased support was used in a strategic and sustainable manner. Regardless, we were busier than we could imagine and needed to increase permanent staff to manage the complexity of our work.

Even if funders were the driving force behind our rapid growth, we have worked hard to maintain our independence from their control so we can assure our nonprofit Partners that we were and are primarily here to help them succeed. To their credit, not one funder has ever asked us to divulge what we would consider confidential information about one of our nonprofit Partners. They understand, as do we, that the trust we have with individual organizations is critical for our assistance to be of maximum benefit.

The most effective tool keeping us in touch with the nonprofit sector has been our Operations Board. This advisory board was selected to represent significant nonprofit leaders from throughout the state. It currently has 30 members. I know that seems large, but we have over 90% attendance at every meeting – indicating to me that each member is fully engaged in the success of Foraker and the well-being of the sector. They provide on-the-ground support about the services we offer and the prices we charge. They serve as our ears to help staff and the Governance Board really hear what needs exist and how we are meeting the expectations of our Partners. As we embrace our renewed mandate to serve as the “Voice of the Sector,” their role becomes even more important. Most of the original members of this board have moved on, and we constantly search for the right mix of professionals from around the state to serve. Any experienced nonprofit leader with an interest in building the capacity of the sector should let us know so we can continue to have the right people involved at this level.

Before I speak about the future, I would like to mention a few more things about our past. First, had Elmer Rasmuson and the board of the foundation he and his family formed not embraced this concept, we would have probably tried this concept. However, for sure, we would not be where we are today. In addition to the Rasmuson Foundation, the oil industry, specifically BP and ARCO/Phillips/ConocoPhillips made a significant contribution to help us get established and all continue to provide unrestricted support that has been used to keep our fees below market so our services can be provided statewide. The Foraker Group has not increased its fees since 2003, largely because of our founding funders support.

We have also maintained close relationships with the Alaska Mental Health Trust Authority who was our largest customer, providing more money into our budget than any other source from 2005-2008. The relationships with the Denali Commission and the Alaska Housing Finance Corporation, as well as support from over 20 other businesses committed to our sector and mission, comprise the balance of our support from Alaska’s institutional donors. But don’t think it’s just their support we appreciate. As of today, we have over 470 nonprofit Partners. Almost a third of that group is comprised of organizations with budgets below $100,000. Through their ongoing support and payment for services, they (you) are the financial backbone of The Foraker Group. If all funding from every institutional funder disappeared tomorrow, we would not be able to offer some services like Pre-Development, nor would we be able to do as much “free” work as we do today, but our initial services such as the various shared services, trainings and consulting could be maintained on earned revenue from the fees paid by our Partners.

To close, I’d like to review some of the significant accomplishments over the past nine years:

  • We have increased our membership from our first Partner, Bean’s Café, to over 470 organizations around the state, most outside the Anchorage area.
  • We have generated around 80% of our income from earned sources. Half of the earned income is from nonprofits, the other half from institutions like the Alaska Mental Health Trust Authority. The remaining 20% comes from our founding funders and a number of other institutional donors.
  • We have provided three basic streams of service:
    • Shared Services such as finance, human resources, web design and Pre-Development
    • Training such as the Board and Staff Forums, The Certificate in Nonprofit Management, and the degree through Alaska Pacific University
    • Organizational Development like board and staff retreats, strategic planning and coordination and collaboration assistance
  • The Tides Foundation recently conducted a nation-wide survey on financial shared services and found that our program at Foraker is the only one that appears to be sustainable without a subsidy.
  • Depending on how you categorize Foraker, we are either the largest state nonprofit association in the country (based on budget), the largest capacity building organization in the Pacific Northwest, as well as one of the largest anywhere in the country, or a truly unique model that combines services found nowhere else. The bottom line is we have grown much more complex than we had planned, and there appears to be the need for us to do even more in the future.

So where do we think we will be in another nine years? We hope we will:

  • Provide all the services we offer now that have relevance in the future
  • Continue to expand shared service offerings, potentially allowing us to:
    • Successfully launch the association health plan
    • Enhance human resource services
    • Finally crack the obstacles to provide true IT shared services
    • Provide purchasing discounts on equipment or supplies
  • Become more active in advocacy on broad issues facing the sector
  • Conduct frequent “town hall” sessions around the state for the Partners’ CEOs with the Foraker CEO, as well as such sessions for emerging leaders
  • Become world class in the ability to provide engaging, distance delivery of services, especially training
  • Conduct periodic “Leadership Summits,” gathering the sector both statewide and within regions
  • Provide useful information through research such as:
    • The ISER studies that look at the impact of the sector
    • Measurements that track changes in the sector over time
    • The Alaska Funders Guide
    • Wage and benefit surveys

We are truly proud to be your Partner. Our sector does so much to build community, help those in need, improve and enrich lives, educate, preserve culture, and protect our beautiful state. We are grateful in this New Year to play our part – which is supporting you.