Vermont’s 2500 Non-profits

Vermont has over 2500 non-profit organizations. They are either mission-driven or overhead-driven. They are focused either on achieving their stated mission or on their survival. There is a great deal of mission overlap and contiguity in Vermont’s many non-profits. Competition is healthy in the for-profit sector but merely duplicative in the non-profit sector.

Some of our most vital non-profits began as the benevolent vision of an individual. Sadly, it takes more than a dream to fulfill a mission in the non-profit world. It takes money. There are 650,000 people in Vermont and 2500 plus organizations competing for the donations of those who can or will be philanthropic. In the recent past, Chittenden County alone played host to over forty capital fund drives.

Is this healthy and should we let “natural selection” take its course as it does in the for- profit world, or is there a higher ground that might ensure better use of our limited charitable revenues and the wealth of volunteerism for which Vermonters are famous?

At the very least there is a strategic opportunity to share and reduce overhead among similarly positioned non-profits. The Vermont Historical Society, the Vermont Arts Council, the Vermont Humanities Council, The Vermont Folklife Center, all struggling to fund mission and overhead, might consider combining those overheads, using their amplified scale to achieve cost reductions that would accrue to the benefit of their unique missions.

As these cultural non-profits extend their reach and mission onto the Web, they will be called on to acquire very expensive technology to archive, parse and serve their broadband assets like recordings, documents, photographs and films to audience well beyond Vermont’s borders. Will each try and raise the money to acquire this technology when one properly designed system could serve the needs and assets of all? Does each organization need a unique financial manager when the combined revenues of all four are less than a small business? Mission must remain sacred, but who cares about overhead?

Share accounting, non-mission-based personnel, common space, class rooms, exhibition space, technology, and contracted services.

Maintain unique missions, directors, governing boards and program development staff.

Much of Vermont’s work is accomplished by non-profits operating in healthcare, culture, the environment, education and social services. It is critical that non-profits conserve energy and resources to preserve mission. Boards and Directors of all Vermont non-profits must look inward and assess how hard they are working at mission and how hard they are working at survival, by which we mean supporting overhead. An honest accounting of revenues allocated to mission versus overhead will be a key to an organization’s intrinsic strength. Non-profits that are ego-driven rather than mission-driven are often fund raising for overhead rather than mission. A development officer hired to fundraise for his or her own salary and that of the Director, though inappropriate, is not uncommon.

This may apply to State agencies as well. The trend for cash-seeking State agencies to emulate non-profits and look to individuals and businesses in the private sector for donations to accomplish their mission is disturbing. The State sets rules for and regulates the society it governs. Citizens give the State the power to tax individuals and businesses to do so. The State also draws heavily on private citizens to accomplish the work of government on myriad boards and commissions. This is as it should be.

To solicit donations, however, on top of tax revenues and volunteers in the name of a “private-public partnership” suggests, to some degree, agency ineffectiveness. It also competes with the 2500 non-profits have no power to tax and must rely on mission effectiveness and the generosity of the private sector to survive.

A local example is the cleanup of Lake Champlain for which the private sector is being asked to provide an additional $10M as well as leadership. Is it not the job of State to regulate and remediate this cleanup funded by state and federal tax dollars? At the federal level we see a continuing decrease in funds for the National Park Service slowly starving our environmental treasures, support for which is being sought in the private sector. Why pay taxes?

We must find ways to be more efficient. Government agencies should do their jobs with tax revenues and Vermont’s non-profit boards should apply the generous donations of Vermonters to mission while considering new and innovative ways to share common overheads.