Archive for the ‘Non-Profit Work’ Tag

The stock market: Alternative financing for non-profits

Lucy at Philanthropy 2173 has started an interesting discussion regarding cross-platform philanthropy:

“Just as a radio program or tv show must now be developed with an eye toward its other media platforms and outlets, our public/philanthropic financing of these ventures need to be considered within these “cross sector” financing opportunities. We need to think of philanthropic funding strategies – and the public goods they support – as cross-platform. Public goods are now provided by private firms, public agencies, nonprofit organizations, and social enterprises. They are funded by public dollars, charitable donations, fees for service, corporate sponsorship, licenses, social investments, sales, and search engine/ad revenue. Oh, I like this metaphor – I’m gonna have to expand on it — next post.”

Taking the idea further, I started thinking about changes that might take place if non-profits were traded on the stock market like for-profit enterprises.

1. More secure and steady source of funding

Currently, non-profits compete for a limited set of funds among possible donors. A donor’s choice of the beneficiary may be influenced by media coverage of the cause the organization supports. Because there is a finite source of funds, prevailing priorities determine which causes and organizations gain the most. Reliance on quarterly fundraising totals can swing between feast and famine with any number of factors affecting donors: economic conditions, other pressing events, etc. Companies participating in stock exchanges generate profit from the value they offer through goods and services. Generating profit is not a zero sum game in the market; all organizations have the opportunity to show the value that their organization brings about and earn profit.

2. Changes in the organizational governance structure

Trading non-profits on the stock market also democratizes the governance structure of the organization. Shareholders have a financial stake and hopefully a personal interest in effective programming. Members of the community can share their insight about how the organization can be most effective directly with management. Involving more opinions in the direction and governance of the organization diversifies perspectives and strategic direction, much like some organizations hope to do by recruiting millennials to non-profit boards.

3. Altered definition of organizational accountability and responsibility

Non-profits would have an external measure to determine how well they are at doing good. Right now, most accountability for evaluation and demonstration of effectiveness is less of a requirement for continued donor support. Within the market, organizations that could prove they actually accomplish what they set out to accomplish will see the dividends literally in the stock dividends. Developing and maintaining effective and sustainable programs would affect the bottom line, promoting evaluation and the incorporation of best practices.

What do you think about the idea of nonprofits on the stock market? Worthless adaptation from for profit enterprises or the future of nonprofit fundraising? Let me know what you think in the comment section below.

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Localism and its influence on social change

I work in one of 43 community health centers located in the metropolitan area of La Plata, Argentina. These centros de atención primaria de salud or CAPs form the backbone of the health system with a community-based approach that does not have an equal in the United States. Having the clinics in the particular communities helps to alleviate the financial burden of transportation and provides ready access to care for people with limited mobility. The particular clinic that I work for is located in the middle of the city in spite of the fact that most of the patients live in the farther suburban areas. Patients feel more comfortable receiving medical care for HIV and other STIs without facing stigma from running into their neighbors.

flickr image by kansasexplorer

In the United States, there are also other community-based approaches in other sectors. The localism movement has grown in environmental circles; buying food produced within 100 miles of your community reduces the pollution produced from transportation and has the added benefit of helping local farmers. The shift toward “going local” or localism has a broader impact than simply food choice. The movement is indicative of a growing desire to foster community needs and community activism. This increased community focus has a distinctive effect on social change efforts and the work of nonprofits.

1. Revival of strong community ties

Encouraging people to buy locally produced goods and use local businesses has a positive impact on the ties that people feel for thair community. People are bound to feel closer to a community that they feel they know better.

Bolstering community connections has the ability to improve local philanthropy and activism. Community foundations facilitate philanthropic efforts dedicated to improving local services and institutions that community members use. Knowing more about your community is a way of encouraging a feeling of personal responsibility making improvements. I am more likely to help the neighbor that I know rather than the one I do not know.

2. Community can be a resource for itself

Greater knowledge of one’s community combined with stronger community ties allows community members to seek assistance and information within the community rather than relying on external interventions. John Robb examines this concept of resilient communities in the context of conflict and security. If the local youth sports team needs to buy equipment, they can seek sponsorship from a local business rather than hoping that the state youth sports association will grant them funds. The local business feels some loyalty to the team because the parents use the services that the business offers. The business receives a public relations boost from the sponsorship and the team is happy that they have their new equipment.

Focusing social change efforts on the local community can be considered a way of institutionalizing social change. It allows people to be more involved in nonprofit programs due to proximity. I can teach reading to adults at the local library rather than simply giving away old books to a national literary program. Within the community, there is an established network of friends and family to tap into for organized efforts. People choose to participate in a 10K walk/run to raise fund for research dedicated to breast cancer. Rather than completing it alone, they recruit family and friends so participate as a team.

3. Localism runs the risk of isolationism

The intention behind the saying “think globally, act locally” is distorted when considering increased dedication to localism. Although I may be helping my local community by opting to teach literacy at my local library rather than supporting a national program by donating books, they are several people who could have benefitted from those donated books. Turning change efforts inward to our communities may leave others without the assistance that they may need. Applying a local focus to social problems may also ignore the real need for institutional and system-wide change that is needed for collective action problems such as failing health systems and climate change. Localism must be tempered with an ability to see the larger picture of how the community fits in its surroundings.