Jackson — Getting by with fewer dollars and facing the possibility of new federal regulations while serving an increasing number of needs are just a few of the issues that Mark McCrary, executive director for the Mississippi Center for Nonprofits, faces on a daily basis.
The Mississippi Business Journal chatted with McCrary about these issues and asked him what the Center is doing to help Mississippi nonprofits.
Mississippi Business Journal: How is the Mississippi Center for Nonprofits grappling to avoid the ongoing national trend of fewer attendees at conferences and workshops?
Mark McCrary: All over the country, associations are facing a drop in participation by nonprofits in conferences, training seminars and workshops to help them perform better. We’re doing OK, so we’re not really “grappling.” Like any business, we can expect some years to be less than others. We have also, however, expanded our offerings throughout the state to reach deeper and provide more readily accessible training. Although we think the economy is affecting nonprofits’ decisions to attend conferences, we’ve seen a 5% decrease in attendance at our workshops and seminars. Next year, we will be working with the Mississippi Commission for Volunteer Service by joining conferences. This will allow nonprofits to attend one bigger and better conference rather than two in a year.
MBJ: Tell us about your expanded offerings to meet the needs of the nonprofit sector in Mississippi.
MM: We’re expanding our programs and services by trying to create a Nonprofit Management Institute to be launched on the Gulf Coast, establishing a statewide Consultant’s Council to build the capacity of nonprofits and opening a part-time office in Tupelo. We also offer a regional conference in Hernando and intensive training in Meridian, specifically for boards of directors. Our vision is to serve any nonprofit within 90 minutes from its home base, which will reduce travel time and expenses and provide critical training for success. Finally, our intention is to also begin re-framing the nonprofit sector into economic and social development terms to begin a dialogue throughout the state about the impact of the sector. Although this is in its formative stages, we will be unveiling a nonprofit report this fall to begin demonstrating the economic impact that the nonprofit sector has on this state.
MBJ: Can you give us an update on the Senate Finance Committee hearings concerning nonprofit organizations, which you have described as “a double-edged sword that will have a serious impact on the sector?”
MM: The Senate Finance Committee in Washington is conducting a very thorough evaluation of the nonprofit sector because a few large nonprofits have made choices that reflected poorly on the entire sector. They had a “closed door” roundtable discussion last month to gather further information. We anticipate that this will have a nationwide impact on nonprofits, foundations and possibly religious organizations. The hearing, “Charity Oversight and Reform: Keeping Bad Things From Happening to Good Charities,” is driving their interests in expanding governmental oversight for nonprofits throughout the state.
Many of the elements that were discussed in the Senate staff document are good nonprofit “best practices,” such as board oversight and evaluation of organizational management. Others, however, are a significant concern because they restrict an organization’s self-determination for board policies and give the IRS the power to set the size of the board and remove board members. The discussion also addressed issues, such as increasing penalties for reporting errors and charging a processing fee for 990’s (the nonprofit tax return) to pay for regulatory enforcement, which could have onerous and potentially devastating effects in some nonprofits. We are hoping that the results of the hearings will encourage uniform policies in management excellence and ethical governance by the board.
MBJ: Managing Mississippi nonprofit organizations and foundations during recent troubling economic times is a daunting task, but area nonprofits and corporations have found ways to work together to minimize the impact of fewer dollars for the state’s charitable needs. In 2002, $2.4 billion was funneled into the state’s nonprofit sector. How is charitable giving trending now?
MM: The giving base in the U.S. increased slightly to $240.72 billion in 2003. This is a 2.8% increase over 2002 (not adjusted for inflation). With inflation figures, total giving adjusted for inflation increased by .5%. The research for giving (Giving USA) looks at individuals, bequests, foundations, corporations and corporate foundations. Individuals are, by far, the largest sector of contributions to nonprofits and charities. Last year, individuals gave about 75% of contributions for a total of about $180 million. The other categories that increased were bequests and support from corporations and corporate foundations. There was some increase in corporate giving, but the giving from corporate foundations decreased, which brought overall corporate support down (from a 9.1% increase in 2002 to a 1.9% increase this past year). The hardest hit group that supports nonprofits was the foundation community, which is directly tied to the economy. If you look at the funding pie, individuals give 75%, foundations give 11%, bequests are 9% and corporations and corporate foundations account for about 5% of all giving in the country.
Now, if you look at where giving is headed in terms of organization type, the largest increases were in health-related organizations, arts (including culture and humanities) and international affairs. This is really indicative, in my opinion, of what’s going on in the world. The AIDS epidemic and wartime efforts probably increased the giving in health and international affairs. What is interesting is the increase in arts, culture and humanities giving. The reason this is interesting is because it supports the theory that during war, economic hardships and other difficult periods, people are more apt to attend cultural and entertainment venues than at other times. The rationale was that arts, culture and humanities helped people cope more effectively with life during difficult times, which means the giving trend makes some sense. Smaller increases were seen in environment, public benefit and religion-based organizations. There was decreased giving in education and human services.
Of course, this is national giving overall. With the upcoming elections, expensive campaign chests are competing for fundraising dollars, which will have a negative impact on giving to nonprofits that serve their communities. In Mississippi, our estimates are that giving has increased slightly. From conversations with the sector, however, we are also seeing increased interest in new strategies to garner contributions as well as new foundations being formed to address social needs. The Center is looking at different fundraising types of workshops to help nonprofits understand the challenges they face and how to put in place the best strategies to reach their goals.
MBJ: Have you noticed a change in volunteer patterns?
MM: Actually, we have observed a greater desire within the state of people to volunteer, especially in start-up nonprofits. In fact, the Mississippi Commission for Volunteer Service has indicated that there is an increase in some demographics of the community, which echoes national trends. The main growth in the past two to three years has been in youth (under 25) volunteerism. The types of volunteering in which younger people are participating are those efforts where they can see a tangible result of their efforts and feel as if they are making a difference in peoples’ lives. Rather than volunteering for political organizations, they seem to be much more interested in groups such as Habitat for Humanity, where they can see direct results. As the demographics change, we are going to see the “boomer” impact in volunteerism. In the next 15 years, the largest opportunity for nonprofits will be the experienced baby boomers that will be retiring and, hopefully, will use the freer time commitments to volunteer for their favorite charity.
MBJ: Last year, you mentioned that the Mississippi Center for Nonprofits was mulling how to better help nonprofits merge or develop strategic alliances while streamlining. How’s that going?
MM: As we reach a much greater level of need for services, especially with government cutbacks, the nonprofit sector continues to do an excellent job in helping communities thrive. There continues to be substantial growth in the number of nonprofit startups by dedicated and creative community leaders who want to provide new services and address needs that are not being met in local communities. Research suggests that there is an average of 90,000 new nonprofits in the U.S. each year. If we look at Mississippi as a straight percentage of that, without accounting for population density of each state, we should see an increase of about 1,800 each year. As it is now, we are experiencing about 1,200 new organizations incorporating with the Secretary of State’s office annually. With that in mind, Mississippi is experiencing above average growth, given its population without a marked increase in giving. The market could well force many organizations to develop strategic alliances, mergers or go out of business. We continue to build on our workshops and technical assistance knowledge to help nonprofits in all aspects of management and planning. We have also, unfortunately, worked with some organizations that were hard hit with state government budget cuts, to help guide the dissolution process. In some of our workshops, we broach the subject of collaboration and partnership and have begun to gather research and materials for our library on mergers and strategic alliances. In fact, as an organization, the Center is looking at maximizing our own efforts for strategic alliances, one example being our joining conferences with the Mississippi Commission for Volunteer Services in 2005. We are in a very exciting and challenging time for the Center and the nonprofit community in Mississippi.
Contact MBJ contributing writer Lynne W. Jeter at firstname.lastname@example.org.