Building Healthy Nonprofits

The Executive Service Corps movement is fueled by a belief that we can make the world a better place. We can strengthen our communities, provide all kids with an excellent education, and stamp out hunger, homelessness, and poverty. We believe open spaces and the arts are not just nice to have, but essential to healthy communities.

We are also know that nonprofits have limited resources and stretched staff. We ask them to solve the hardest problems but to do so with underdeveloped infrastructure and administrative systems. By making volunteers with professional skills in human resources, financial management, technology, planning, operations, and management available to nonprofits we can help them build stronger more sustainable organization.

The members of Executive Service Corps across the US are helping nonprofit invest in their people, processes and systems. They are helping board do a better job of governance and executive become stronger leaders.

The comprehensive management support that Executive Service Corps provide is all the more important because their services are available on sliding scale basis making them affordable to nonprofits of all sizes.

Advocating for Sustainable Funding

The ability of any capacity building organization like Executive Service Corps to build healthy nonprofits is impacted by the lack of funding many nonprofits have for internal infrastructure, capacity building and organizational improvement. Despite many studies and advocacy by some funders, most grants are restricted to program costs and do not cover overhead or capacity building.

The impact of chronic and systemic underfunding of administrative costs and systems is demonstrated in two studies: the Nonprofit Starvation Cycle and CompassPoint Nonprofit Services’ Daring to Lead which looks at executive tenures. The difficulty of the funding environment results in most executive directors serving short tenures, and refusing to accept future executive director positions, in part because of the chronically underfunded nonprofit infrastructures. In fact, the majority of executive directors stay in their jobs for four years or less. The reason why these tenures are so short is telling: Most of the respondents cited high stress, long hours, and concerns over organizational finances as factors of burnout.

In the Nonprofit Starvation Cycle, Ann Goggins Gregory and Don Howard summarize the dilemma: “Our research reveals that a vicious cycle fuels the persistent underfunding of overhead. The first step in the cycle is funders’ unrealistic expectations about how much it costs to run a nonprofit. At the second step, nonprofits feel pressure to conform to funders’ unrealistic expectations. At the third step, nonprofits respond to this pressure in two ways: They spend too little on overhead, and they underreport their expenditures on tax forms and in fundraising materials. This underspending and underreporting in turn perpetuates funders’ unrealistic expectations. Over time, funders expect grantees to do more and more with less and less—a cycle that slowly starves nonprofits.”

Grantmakers for Effective Organizations has done research that demonstrates that the types of financial support most associated with long-term nonprofit success are:

    • General operating support (also known as unrestricted support)
    • Multiyear support
    • Capacity-building support

Despite this evidence On March 12, 2012, a recent TCC study: “Is Grantmaking Getting Smarter?: A National Study of Philanthropic Practice” reported that general operating support has remained static at 20 percent of all funding for more than a decade.

Because the members of the Executive Service Corps often have ties to business, government and philanthropy, we are well positioned to be advocates for changes in the way nonprofits are formed and supported.

Committed to Change

We are committed to improving the management practices of nonprofits and the giving practices of philanthropy so that the problems facing communities in the US and around the world can be solved. We know that thousands of talented professionals are willing to join in this cause.