Ottawa County nonprofits have been effective stewards of their financial resources, which puts them in a strong position to continue to provide resources during an economic downturn, according to a recent report.
This deep look at the financial health of the local agencies is part of a first-of-its-kind assessment of Ottawa County organizations undertaken by the Lakeshore Nonprofit Alliance
“We have organizations that have a lot more cash on hand, far and away than what you would see on a national level,” says Patrick Cisler, executive director at LNA.
Patrick Cisler is the executive director of the Lakeshore Nonprofit Alliance, which recently completed the first nonprofit community assessment. Photo by Shandra Martinez
The survey of 64 LNA members showed that 74% of them have financial reserves for at least three months, and 27% have enough in their coffers to pay the bills for eight months or more. The majority — 54% — have annual revenues that exceed $500,000.
The assessment is based on answers to more than 150 questions sent to LNA members on a range of issues, from finance to diversity and inclusion efforts. The results show that achieving financial stability can be easier than assembling a healthy and effective board of directors that reflects the diversity of the community.
Cisler sees the assessment as an opportunity to benchmark nonprofits in a variety of areas that will improve strategic planning efforts.
Asking about finances was a way to measure how nonprofits might weather an economic recession or some other kind of economic shock that could lead to a spike in the need for services. By and large, the nonprofits not only reported healthy cash flow levels but diversified funding sources.
“The financial resiliency piece is a really positive story to tell, that our nonprofits are good stewards of their donations,” Cisler says.
Those numbers are higher than national averages, confirms Dennis McMillian, a senior consultant with the Dorothy A. Johnson Center for Philanthropy
at Grand Valley State University.
He also points out that the LNA membership isn’t necessarily representative of the whole nonprofit sector since the majority of the country’s 1.5 million 501(c)(3) nonprofits have little or no staff.
“I think the relative affluence of Ottawa County, along with the sense of community, produces a commitment of giving to nonprofits,” McMillian says.
There is anecdotal evidence that suggests a correlation between a community’s generosity and quality of life, he adds.
Ottawa County nonprofits average 888 donors, according to a report by the Lakeshore Nonprofit Alliance.
The nonprofits average 888 donors, with a range of 4 to 8,000, according to the report. There was an average of 418 volunteers per organization, who collectively contributed 14,000 hours annually.
Providing the nonprofit community with this kind of data is rare because most is sourced at a state or national level, says Elizabeth Kidd, vice president for community impact for the Community Foundation of the Holland/Zeeland Area
Elizabeth Kidd, vice president for community impact for the Community Foundation of the Holland/Zeeland Area, is vice chair of the Lakeshore Nonprofit Alliance. Courtesy Elizabeth Kidd
“We knew it would be insightful, but it surpassed what we expected. It’s so much more impactful to have local data to look at your strengths and weaknesses. It gives us tangible data points,” Kidd says.
LNA might be what some call an invisible nonprofit because it doesn’t work directly with the public but serves the nonprofits that serve the community.
“They are behind the scenes, helping the organizations do their work as well as possible,” says Kidd, LNA’s board’s vice chair, who is serving her second three-year term.
The foundation was one of four entities that provided funding for the assessment. The others were Grand Haven Area Community Foundation
, Herman Miller Cares, and Brooks Capital Management.
The assessment showed that Ottawa County nonprofits, like other employers, struggle with staff retention.
“With low unemployment, everybody's struggling with it. But certainly, we've learned that leadership highly values the staff and feels they have the right staff to help accomplish their mission. But they're concerned about keeping them,” Cisler says.
One way to address that issue is with increased compensation.
“We as nonprofits have long sold the mission side to employees, saying, ‘You can feel good about what you're doing every day.’ But we struggle with compensation. I don't think we'll ever catch up to for-profit, but we have to raise the bar in terms of what we're paying and what kind of benefits we're offering,” Cisler says.
The report collected compensation information for executive directors, but not staff members. Cisler says that data will be collected in future assessments.
The assessment also revealed that nonprofit boards are continuing to struggle with diversity, especially when it comes to their boards of directors. There are few people of color and younger people on boards.
The boards of Ottawa County nonprofits are primarily white or Caucasian and older than 35 years old.
When it comes to race, 87% of board members are white or Caucasian, and 49% of organizations have boards comprised of all white or Caucasian members. Age-wise, only 11% of boards have members that are younger than 35.
Strategic planning tool
More organizations are working toward that goal by adding diversity, equity and inclusion policies and statements or procedures to be a more inclusive work environment. Part of that is also doing a better job recruiting and onboarding new board members.
“We've heard from several organizations that have taken the information, and it's become a strategic planning tool for them to say, ‘Hey, here's where everybody else is. Here's what we're doing and here’s how can we improve?” Cisler says.
One is the Holland Community Aquatic Center
. The nonprofit, whose board is appointed by municipalities that reside in the millage district, is focused on increasing diversity within its staff and leadership.
Jack Huisingh, executive director of the Aquatic Center, describes the report as a crucial resource for his organization to prioritize work and objectives effectively.
“I sincerely appreciate the ability to have so many opportunities to learn from LNA and also to interact with others facing similar needs and concerns. LNA offers an intentional method of collaboration, which we all need to do and yet find difficult and time-consuming to accomplish,” Huisingh says.
Although headquartered in Holland, LNA provides services to nonprofits across West Michigan through a variety of educational initiatives, such as peer-to-peer learning circles, lunch n’ learns, and training sessions for board members. (See story
The plan is to do the survey and report every three years. Cisler thinks that participation will only grow.
“I can almost guarantee, after delivering these results a couple of months ago at our annual Nonprofit Next event, there will be higher participation next time, now that they can see what we can do with it,” Cisler says.
You can read a summary of the report at lakeshorenonprofits.org
This article is part of The Lakeshore, a new featured section of Rapid Growth focused on West Michigan's Lakeshore region. Over the coming months, Rapid Growth will be expanding to cover the complex challenges in this community by focusing on the organizations, projects, programs and individuals working to improve conditions and solve problems for their region. As the coverage continues, look for The Lakeshore publication, coming in 2020.