While many nonprofits are fighting for survival amid the COVID-19 pandemic, the Steamship Historical Society of America knows better than most what it is like to be on the verge of sinking – and manage to struggle on.
Ten years ago, the Warwick-based organization, founded in 1935 to preserve the history of steamship navigation, needed to change course to stay afloat. Membership was declining and a print magazine was the organization’s only means of sharing information on steamship history.
“We were in a death spiral,” recalled Executive Director Matthew Schulte.
While the society implemented changes to raise its public profile and keep going, including boosting its social media presence, Schulte and his team still struggle to increase awareness about the group and raise money.
The Steamship Historical Society isn’t alone. Nonprofits across Rhode Island are grappling with declining donations and figuring out on their own how to remain sustainable over the long term.
Adding to the strain, the ultimate existential threat – the ongoing pandemic.
While organizations that offer food, health services and social services are managing the crisis relatively well thanks to short-term donations, others, such as arts and culture groups and other niche organizations, are laboring because of the economic shutdown in the spring and its lingering effects, according to those in the nonprofit sector.
Even before the pandemic, some local nonprofits felt the sector might benefit when it comes to training and funding by the creation of a singular organized voice or advocacy group. Most states have designated nonprofit associations that offer both resources to assist organizations serving diverse causes and advocacy efforts on behalf of those nonprofits. That’s not the case in Rhode Island.
United Way of Rhode Island CEO Cortney Nicolato said COVID-19 has done “nothing but elevate” the need for a “true support network” for nonprofits in Rhode Island.
While it’s difficult to determine how many nonprofits are in peril because of the pandemic, Nicolato said United Way has received calls from organizations worried about their future, and some are considering mergers in a bid to shore up finances.
Nicolato believes a collective voice for nonprofits on particular issues – such as having them included in discussions about small-business funding – is a “critical avenue” to make politicians, policymakers and the public aware of their financial struggles.
While getting thousands of disparate groups on the same page can be challenging, “when we do come together, it’s incredibly powerful,” Nicolato said. “We should have a ‘chamber of commerce’ for nonprofits to be … advocating for the sector at-large.”
Angela Bannerman Ankoma, United Way’s director of community investment, said nonprofit directors have told the United Way how “lonely it is” not to have colleagues to share ideas with. She cited the United Way’s Executive Director Learning Circle as a program providing an “informal network” for organizations and leaders to connect with one another.
The United Way is now evaluating a model for an association or a council for nonprofits in Rhode Island, Nicolato said, though not everyone is convinced of the need.
‘DOES NOT COME UP’
Rhode Island Foundation CEO and President Neil D. Steinberg said he hasn’t heard talk about it in local nonprofit circles. And in the past, he added, nonprofits already have shown they can mobilize quickly around an issue – such as tax legislation – when called upon.
“If somebody makes a strong case [to have an association], we’re the largest funder and have a strong impact for the community, we’d be glad to talk to people or listen,” Steinberg said. “To me, the issues [affecting the community] are more important. I’m seeing more activity within [specific or certain] sectors than I am [regarding a] broad thread across the whole nonprofit sector.”
Steinberg said RIF would “always” advocate for nonprofits to be included in loans or grant programs offered by state or federal government that are meant for small businesses. Nonprofits, he noted, were included in the U.S. Small Business Administration Paycheck Protection Program to help organizations endure the coronavirus crisis.
“We haven’t needed an association to [advocate for] that,” he said.
Still, Rhode Island is one of just 10 states – and the only one in New England – without a designated nonprofit association representing the entire sector, according to the National Council of Nonprofits.
The Massachusetts Nonprofit Network, formed in 2007, provides a “unified advocacy voice” for more than 850 nonprofits that employ about 551,000 people – or 17% of the state’s workforce, according to Jim Klocke, the network’s CEO.
The network’s focus is threefold, Klocke said: Help shape public policy, such as working with state legislators on crafting language in proposed laws and regulations; offer nonprofits building-capacity services; and raise awareness of what nonprofits do on a daily basis.
“A lot of people don’t know until they hear about it – the scale, the impact of the sector, the innovation going on in the sector and kind of the hundred ways in which the sector touches everyday lives,” Klocke said.
Constance Ferber, a former knowledge director of New York-based nonprofit association Nonprofit New York who now works in the Rhode Island nonprofit sector, said a statewide association can be “really impactful” in making the public aware the challenges, such as funding, workforce development and financial management that nonprofits face.
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LAB WORK: Rebeka Mazzone, right, leads a work session at the Nonprofit Innovation Lab in January with staff members from several nonprofits. The lab, held at United Way’s office in Providence, is a collaboration of United Way of Rhode Island and Social Enterprise Greenhouse. /PBN PHOTO/MIKE SKORSKI[/caption]
HELP NEEDED
It has always been challenging for nonprofit organizations going it alone, though Rhode Islanders have been especially generous during the pandemic.
The COVID-19 Response Fund, formed in mid-March by the United Way and Rhode Island Foundation, has distributed more than $8 million in grants to local organizations on the front lines.
On April 1, United Way held its inaugural 401Gives Day, a one-day, online event in which individuals donated to nonprofits of their choosing. More than $1.3 million was raised for 365 nonprofits through 401Gives Day, exceeding the event’s initial $1 million goal.
“[April 1] was filled with gratitude, hope and community all day long. I feel like everybody needed [that day],” Nicolato said.
But turning such short-term support amid crises into long-term funding streams is more challenging.
Rhode Island has regularly ranked near the bottom nationally in giving, and data on donations by local foundations have been mixed in recent years. Both the Rhode Island Foundation – the state’s largest nonprofit funder – and the Champlain Foundation have seen year-to-year increases in charitable giving over the last three years.
But other organizations have seen dips in their charitable distributions as donations have declined. The van Beuren Charitable Foundation went from giving $10.7 million in the 2017 fiscal year to $6.3 million in 2018. United Way of Rhode Island has seen similar decreases the last three years, giving $10.2 million in 2018 – down from $18.4 million in 2016 and $11.7 million in 2017.
Demographics are partly to blame. Nicolato said most monetary donors are of an “aging” generation – a sentiment that Jessica David, a former executive vice president of strategy and community investments at Rhode Island Foundation, agreed with. Younger generations, including millennials, want to “give their time first,” said David, who is now a consultant helping nonprofts with strategy and project planning.
Another challenge: recruiting qualified individuals. A 2019 national survey by human resources consultancy Nonprofit HR of 1,000 workers nationwide found that 23% said nonprofits would not be among the types of organizations in which they intend to pursue a career. Half of those respondents cited inadequate pay and 19% said nonprofits don’t offer “good long-term” career opportunities.
“Nonprofits are often smaller,” David said. “There may not be that clear, delineated career path that exists within a corporate environment.”
That perhaps explains an additional problem: a short supply of fundraising professionals.
“There’s just not enough [fundraisers] around with the skills and experience,” said Christine Pellegri, past president of the Association of Fundraising Professionals Rhode Island Chapter and senior philanthropic adviser for the Rhode Island Foundation. “Every time there’s a job that’s open, people call me all the time ‘do you know anyone? I have this position.’ ”
Even grant funding, which organizations seek from foundations to help create or finance specific initiatives, can present a dilemma.
Joshua Riazi, manager for Providence-based Genesis Center’s culinary education department, said organizations have to write a plan to the giving entity noting what the funds will be used for. However, if an emergency occurs that requires a shift in financial need, a nonprofit’s hands may be tied.
“You might be able to take that money and reallocate it,” if there were less restrictions on its use, Riazi said.
Jonathan Kabak, CEO and captain for Newport-based Oliver Hazard Perry Rhode Island Inc., said grant funders wanting all awards to go to program delivery is “unrealistic.”
He said there should be a general agreement that nonprofits should also ask for 25% of the grant application to recognize general-operation expense.
“There needs to be a better acknowledgment of that piece of the pie,” Kabak said.
Nicolato said a statewide association could look at ways to streamline operations and create efficiencies and help drive better relationships between nonprofits and donors.
“There’s a wealth of things that can help the bottom line of these nonprofit organizations,” Nicolato said, “which in turn [can] give donors more confidence that dollars are going directly to programs that are changing the lives of individuals.”
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MAKING AN ASSESSMENT: Cortney Nicolato, CEO and president of United Way of Rhode Island, says the organization is evaluating a model for an association or council for nonprofits in Rhode Island. / PBN PHOTO/MICHAEL SALERNO[/caption]
MAKING ADJUSTMENTS
For long-term sustainability, both David and Nicolato said nonprofits need to take a hard look at their business models and the way they raise money. “You have to continually diversify your portfolio to make sure you have that strength and stability,” Nicolato said.
Some nonprofits have made adjustments while staying true to their mission. Dana Ginestet, College Crusade of Rhode Island’s chief program officer, said the Providence-based organization maintained its programming but scaled back its popular scholarship program because demand outgrew supply.
“What we need to do is ensure that we have that same level of success or even more success in the future – more impact – as that scholarship model changes,” Ginestet said.
Riazi said that Genesis Center, which provides adult education and job-skills training, developed its day care center in the 1980s because it gave students attending classes at the nonprofit a place where their children can be cared. Now, the day care facility is part of the Genesis Center’s regular program offerings.
The Steamship Historical Society of America switched from being a club a decade ago to offering educational programming to schools. It also established the Ship History Center in Warwick to house its artifacts for public viewing, Schulte said.
Those changes, plus having its annual Ocean Liner Gala fundraiser, which will be held virtually this November due to the coronavirus crisis, helped the organization increase its annual budget from $150,000 a decade ago to $600,000 now.
However, Schulte said his staff of four still faces outreach challenges.
He said smaller nonprofits are especially vulnerable amid COVID-19.
“There [are] going to be casualties along the way,” he said.
ASSISTANCE AVAILABLE
That does not mean, of course, that Rhode Island nonprofits are bereft of help.
The Rhode Island Foundation and others offer various workshops to assist nonprofits in how to adjust their operations for long-term stability.
In January, the United Way and the Providence-based Social Enterprise Greenhouse introduced the Nonprofit Innovation Lab. Ten nonprofit leaders, or fellows, were selected to work together and help find solutions to various issues affecting the sector across the state.
The sessions, which pivoted from being in-person to virtual due to the pandemic, will conclude in September or October with a “Shark Tank” style competition, where five fellows will compete for $90,000 in seed funding to help bring their ideas to fruition. Nicolato said the lab will arm organizations with resources that they wouldn’t normally have access to.
“We want to give the nonprofits all the tools that they need to be successful. The Rhode Island community needs it,” she said.
Ginestet, one of the lab’s fellows, said being in it offers the benefit of working with “incredible resources” over the next several months. She feels it will bring “great value” to College Crusade. Mike Chea, director of Pinpoint Translation Services – a division of Providence-based Dorcas International Institute of Rhode Island Inc. – said he wants, through the lab, to improve his marketing skills to sell his translation services to the community.
“They teach you how to sell your pitch,” Chea said of the lab. “They did some strength-finders to help you realize your talents.”
And Steinberg noted the “great response” nonprofits have received monetarily from the community during the pandemic. He believes that the short-term giving level across the sectors has been “stable to up,” and says giving typically increases at year’s end.
But how the pandemic will impact giving as the year progresses is uncertain, he said.
“Will it take away or abate that? We just don’t know yet,” Steinberg said.
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NAVIGATING CHOPPY WATERS: Matthew Schulte, left, executive director of the Steamship Historical Society of America, and archivist Astrid Drew examine one of the steamship models at the Ship History Center in Warwick in February. Schulte acknowledges the nonprofit has had its share of struggles over the years. / PBN PHOTO/RUPERT WHITELEY[/caption]
NO CONSENSUS
Klocke, the Massachusetts Nonprofit Network CEO, said a small group of nonprofit leaders in Rhode Island would need to collaborate and support the concept of a nonprofit association – similar to how the Massachusetts network was established.
The first step for supporters will be gaining consensus.
Kabak said an association could provide a “wonderful forum to bring best practice” to the nonprofit community in Rhode Island and is needed now more than ever.
“There is not a singular voice [now] that says, ‘Hey, while we’re providing funding for direct-service organizations, we should also be mindful that the cultural backbone of our state is [nonprofits],’ ” Kabak said. “Plus, it will help us build our network and helps us work together in an efficient way.”
But Riazi said an association might be redundant, linking people already working together.
“If they’re doing something new that doesn’t exist in the marketplace, it could end up being just more meetings and conferences about the same issues,” he said.
Pellegri agreed, saying Rhode Island nonprofits already excel at communicating amongst themselves.
Schulte, of the Steamship Historical Society, feels differently, however, noting there is a “power of numbers and voice.”
“Having one kind of association that is connected to the nonprofits … makes sense,” he said.
James Bessette is special projects editor at PBN. Contact him at Bessette@PBN.com.
