INDIANAPOLIS-Nonprofits in the Indianapolis area face significant challenges in obtaining funding, volunteers and new members or clients, according to a new survey by the Indiana University Center on Philanthropy and School of Public and Environmental Affairs (SPEA).
Preliminary findings also indicate most area nonprofits have basic management structures and policies, but many lack other standard organizational tools to manage and enhance their activities. The report examines management capacities and challenges of nonprofits in the nine-county Indianapolis area and is based on a statewide survey of more than 2,200 Indiana nonprofits completed in 2002. Statewide and regional results will be reported in coming months. The initial Indianapolis findings are online at http://www.indiana.edu/~nonprof/results/npsurvey.aspx.
"We believe our project will help the public, policy makers and others understand how nonprofits function within communities and shed more light on the depth of civic engagement in Indiana. This new report offers benchmarks nonprofits can use in their own evaluation and planning," explained Kirsten Grønbjerg, project director for the Indiana Nonprofits: Scope and Community Dimensions project begun in 1999.
The project, which is an ongoing examination of the critical role Indiana nonprofits play in communities across the state, includes the new report prepared for the Central Indiana Community Foundation. Grønbjerg holds the Efroymson Chair in Philanthropy at the Center on Philanthropy, headquartered at Indiana University-Purdue University Indianapolis (IUPUI), and is SPEA professor in nonprofit management at IU Bloomington.
"Such information is particularly critical during this time of uncertainty when Indiana nonprofits are encountering major changes in government policies, funding sources and community needs and interests," Grønbjerg said.
More than half (59 percent) of local nonprofits reported that funding is a "major challenge." Grønbjerg said that is not surprising since nonprofits often face greater needs than they can meet. However, she noted "this may have become an even more widespread challenge since the survey was taken, as the economic downturn and government cuts increase needs, while the economy and the stock market decline threaten donor, corporate and foundation giving."
More than 40 percent of organizations said that recruiting and/or keeping qualified, reliable volunteers and effective board members was a "major challenge." Although two-thirds of local nonprofits used volunteers in the previous year, less than 17 percent of surveyed nonprofits have formal volunteer recruitment and/or training programs, including 36 percent of those reporting these issues as major challenges. Even among nonprofits that have such programs, 56 percent say recruiting and retaining volunteers is a major challenge.
Grønbjerg emphasized that there is wide variation among the estimated 16,000 nonprofits in the Indianapolis area in the nature and extent of both challenges and management capacities. The report includes findings specific to various fields, such as human services, public benefit, religious and other organizations. Researchers also plan to look at other factors that could help explain differences, such as nonprofits' age, size and funding sources.
The report shows several strengths as well as aspects that may need closer attention, Grønbjerg said. For example, strategic planning was a major challenge for only 32 percent of nonprofits, but the survey results do not indicate whether that is because they have good planning resources or because few undertake such planning.
Nearly 90 percent have formal governance policies or by-laws. Almost 75 percent produce annual reports, and 69 percent have a recently completed audited financial statement, two key indicators that a nonprofit regularly takes stock of activities and is transparent and accountable to constituents.
Almost 40 percent report having completed a recent evaluation or assessment of program outcomes or impacts. Grønbjerg said that is relatively high, given that there are few established assessment models and that most of what nonprofits seek to do, such as changing individual behavior, is hard to observe and measure, occurs over time, and may be affected by factors outside the organization's control.
The findings also show that of the Indianapolis area nonprofits surveyed for the study, 32 percent lack written job descriptions, 45 percent lack written personnel policies, and 66 percent do not have written conflict of interest statements.
"Nonprofits do not have to have these tools to be successful," explained Grønbjerg, "but they are among the standard management tools that allow an organization to more easily monitor its activities and ultimately become more effective, operate more efficiently and communicate this to external audiences. However, simply having such management tools does not indicate whether or not they are used effectively."
Other findings in the report include:
- Widespread use of technology for internal operations but low use of this technology for communicating with external audiences.
- Attracting new members and clients was a major challenge for 58 percent.
- Almost 40 percent said that delivering high quality programs and services was a major challenge.
"The Efroymson Chair allows us to help strengthen the Central Indiana community. Assessing issues affecting local nonprofits and working with community and nonprofit leaders on ways to address them is a primary goal of the chair and the Center," said Gene Tempel, executive director of the Center on Philanthropy.
"The Indianapolis Foundation is so proud to have established the Efroymson Chair to honor the Efroymson family's impact on our Foundation and the community as a whole. This endowed chair allows one of the top researchers in the field to plan research that is beneficial locally and nationally and that informs funders, legislators, and others about how to improve the community," said Brian Payne, President of Central Indiana Community Foundation and The Indianapolis Foundation.
The Indiana nonprofits project is the most comprehensive state study of its kind ever compiled in the United States, Grønbjerg said, because it includes but also goes substantially beyond the types of nonprofits most familiar to the public. It covers traditional charities, but also incorporates churches, advocacy and voluntary associations and includes nonprofits identified through a wide variety of national, state and local listings.
Grønbjerg said that the project contributes to SPEA programs in nonprofit management because it improves understanding of nonprofits in general and Indianapolis and the state of Indiana in particular. She said SPEA programs at other IU campuses assisted in the research, as well as the IU Center for Urban Policy and the Environment, Ball State University and the University of Southern Indiana.
Primary funding for the study was provided by the IU Center on Philanthropy's Indiana Research Fund, supported in part by Lilly Endowment Inc. Other major funding came from The Indianapolis Foundation's support of the Efroymson Chair in Philanthropy and the Aspen Institute's Nonprofit Sector Research Fund.
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