MANNA FoodBank experienced a 40 percent increase in requests for emergency food assistance last year.
When it started in 1983, the nonprofit distributed 40,000 pounds of food. Last year, the organization distributed almost 10 million pounds of food.
Now, the nonprofit’s leaders, like most nonprofits, are reconfiguring the agency to be able to continue providing services. That is a balancing act, nonprofit leaders say, when their own resources become limited.
MANNA, which started in the basement of Eliada Homes in the Leicester section of Buncombe County, has grown immensely in the past 29 years. It implemented programs to address the specific needs for the area’s most vulnerable populations, focusing primarily on children and elderly residents. The organization adjusted its practices and increased food distribution to area agencies, doing everything from streamlining operations to acquiring new sources of food, including harvesting rights to an apple orchard.
Many organizations across Western North Carolina are finding it tough to raise money and keep up with demand in what is an even tougher economy. There have been closures and layoffs throughout the region’s nonprofit sector at the exact time there are more requests for services. And, MANNA was no exception.
“Unfortunately, MANNA had to close a satellite branch in Franklin in 2011 because of redundancies in service and budget constraints,” said Joshua Stack, communications and marketing manager for MANNA. “However, service to our agencies in those areas has not diminished, and they continue to be adequately supplied by the food bank.”
The strain of having to do more with less is forcing nonprofit leaders to both to look for ways to adapt to continue meeting needs and to proactively find solutions to funding and operational challenges.
Demand up, money down
Most nonprofits receive funding from a variety of sources, including private donors, community fundraising, federal and state grants, local government and the United Way. But as a result of the recession, local, state and federal governments have fewer funds and, in turn, have reduced funding to offer nonprofit organizations.
The Giving USA Foundation and its research partner, the Center on Philanthropy at Indiana University, found that estimated total charitable contributions from individuals, corporations and foundations fell 3.6 percent between 2008 and 2009, from about $315 billion to slightly more than $303 billion. Donation levels rebounded somewhat in 2010, a report by the Association of Fundraising Professionals and the Center on Nonprofits and Philanthropy at the Urban Institute found. But, it continued, philanthropic giving still hadn’t reached pre-recession levels.
The United Way of Asheville and Buncombe County received $1.4 million more in requests last year than the agency had funds to provide, said Vicki Lloyd, director of marketing and communications. Requests for funds are examined each budget year and are distributed to specific areas outlined by the organization’s board of directors.
“We moved our focus a couple of years ago to the areas of education, income and health,” Lloyd said. “Our goal is to make sure there are strong outcomes for our funding and that we are making a real difference in people’s lives.”
The United Way’s 211 of Western North Carolina, a community service information line that links people to health and human services in Buncombe, Henderson, Madison and Transylvania counties, is receiving more calls from individuals seeking assistance for more complex situations, said 211 Director Rachael Nygaard.
“We tend to have a broad picture of what is going on within the community, and what we are seeing is there is a significantly greater need within the community and a trend for nonprofits to do more with less,” Nygaard said.
Trisha Lester, vice president of the N.C. Center for Nonprofits, acknowledges that dealing with challenging times like the current recession is the new reality for nonprofits.
As a source of effective organizational practices for the state’s nonprofits, the center is able to look at the cumulative effect the economy, particularly cuts in funding, has had on agencies.
“In 2008, many nonprofits took a step back and used the recession as an opportunity to look at their core services,” Lester said. “Those nonprofits have maintained vigor and great health and are not feeling the impact as much as some nonprofits. The smaller and younger nonprofits that do not have as much infrastructure as the older, more established ones may be having a more difficult time maintaining in this economic climate.”
One of the wisest things a nonprofit can do to remain functional is to build up its operating reserves, she said.
“The current state of the economy has shown that having a healthy operating reserve is critical,” Lester said.
More nonprofits are coming together to share services, to search for efficiencies and to be good stewards of their available funds, she said.
Merger helps organization survive funding cuts
When the recession hit, The Mediation Center in Asheville saw a spiked increase in the need for its services. It also lost state funding that the agency had relied on for years.
“When families have the stress of not having enough money, that causes conflict,” says Laura Jeffords, executive director of the center, a nonprofit founded in 1983 to help individuals and families deal with conflict. “There is a clear coalition with domestic violence and stressful financial situations.”
The center turned to The Community Foundation of Western North Carolina for guidance and $4,200 in funding, which Jeffords matched with $1,000 from the center’s budget, to develop a two-year strategic plan.
“We had to look for ways to function more efficiently in the midst of greater demand,” Jeffords said. “Fortunately, we have not had to impose any staff cuts or layoffs,” she said. That is due, in part, with a decision to reorganize to combine resources, she said.
The center had worked closely with the Henderson County Mediation Center and the Transylvania Center for Dialogue, and, in October 2011, the three centers, which lost a combined $130,000 in state funding, decided to merge to form a regional center.
The merger allowed certain functions, such as administration and accounting, to be shared. The grant from the Community Foundation also provided the funds needed to connect telephones and network computers among the three centers.
“This has made a huge difference in helping us to meet our operational budget and to continue to provide these needed services to the community,” Jeffords said. “Our goal is to create efficiencies and to be able to push available funds to the residents of Buncombe, Henderson, Polk and Transylvania counties.”
Some nonprofits face office closures, cutbacks
In 2006, The Community Foundation of Western North Carolina partnered with the Cherokee Preservation Foundation, Mission Healthcare Foundation, Mission Hospital and The United Way of Asheville and Buncombe County to form WNC Nonprofit Pathways. Pathways offers training, consultancies and services aimed at helping nonprofits adapt and succeed.
The organization currently recommends a five-pronged approach for nonprofits: get a firm handle on finances; identify available options for reducing expenses and adapting programs to operate in the new environment; make the changes that need to be made; monitor progress by identifying trigger points and understanding choices that need to be made; and adapt continuously.
Fortunately for the American Red Cross, that nonprofit has always tried to operate as lean as possible, said Brian Scoles, chief public affairs offers for the Western Carolinas Region.
“We have not had to cut back (on) staff,” Scoles said. “But, we have consolidated some functions, such as human resources and accounting, across Western North Carolina and upstate South Carolina to be able to operate more efficiently.”
Some time ago, the Red Cross joined forces with the chapter in Greenville, S.C., to form the regional chapter. The Forest City office is slated for closure. By closing some offices, Scoles said, more funding will be available to provide services, Scoles said.
The Red Cross is not a government agency and receives no state or federal funds, he said. The nonprofit relies on grants and donations to in turn be able to help others less fortunate.
“In lean times, we put out appeals to the public,” he said. “Folks are generally very giving during disasters.”
The Good Samaritan Clinic, with offices in Canton and Waynesville, has noticed an increase of patients, while donations and Medicaid reimbursements have decreased. Two medical providers, Don and Martha Teater, said they tried unsuccessfully for about six months to partner with MedWest Health Systems to allow the clinic to continue serving indigent patients.
The clinic will remain open and will continue serving indigent patients, said board chairman David Riggs, although it will be hard to operate with costs going up, grants being harder to get and donations down.
It is not known how long it will take the U.S. economy to recover, however the lessons of the recession should serve as a learning experience for nonprofit leaders, Lester said.
“These nonprofit leaders should not throw in the towel,” she said. “They can draw on the collective intelligence of other nonprofit leaders. Strategic analysis of their operations will be essential for nonprofits now and in the future.”