Fall 2009 Issue
Survival of the fittest
In today’s economy, South Florida nonprofits need to be smart, creative and vocal – just ask these three Barry alums who’ve led the way
By Richard A. Webster
About two years ago Ed Laudise met with the board members of the Immokalee Foundation to discuss the frightening possibility that the country was about to enter an economic downturn that could rival the Great Depression.
The stock market looked similar to the way it did right before the dot-com implosion, he said. And on top of that, thousands of mortgage notes handed out en masse at the beginning of the decade to people who could not afford them were about to come due.
It was a disaster on the verge of breaking and when it did the nonprofit community was going to be among the hardest hit, Laudise told his board.
The need for the services provided by the Immokalee Foundation, which funds a variety of programs to assist the families and children of the notoriously impoverished community that lies just 35 miles northeast of Naples, would increase as more people lost their jobs. But donations would be harder to come by as both the public and private sectors pulled back on all unnecessary spending including charitable giving.
Laudise advised his board that they were going to have to be extremely prudent with their money if they wanted to survive. But he also issued a challenge.
“I told them we’d be remembered for how we acted during the next two years. Now was not the time to pack up the tents. The kids we serve were going to be suffering, so we needed to be bold,” Laudise says.
Laudise ’95 is one of several Barry alumni leading South Florida nonprofits and charitable organizations through the financial turmoil of the recession.
Dee Dalrymple ’73 heads Pass it On Ministries, Miami-Dade’s only all-volunteer run food pantry. It services more than 400 people per month from more than 700 welfare agencies, providing people not only food but social services and workforce training, the skills needed to survive independently and return to the community as contributing citizens.
When the recession first hit, Dalrymple feared Pass it On Ministries would not be able to meet the increased needs of her constituents.
Each day she looked out the window of her office and saw lines of people that stretched for blocks, desperate for a decent meal. They were people who had lost their jobs, been evicted from their homes, had their electricity and water turned off or who had recently declared bankruptcy due to illness or an extended hospital stay.
And eventually the crush of people overwhelmed the resources of Pass it On. For one week it was forced to decrease the amount of food it handed out and reassess its ability to provide assistance in the future.
Pass it On was not alone.
In March, the Donors Forum of South Florida and the Center on Nonprofit Effectiveness conducted a survey of 30 Miami-Dade nonprofits and found that many had seen revenues decline by 20 to 30 percent.
More than 65 percent saw an increase in demand while the same amount reported they had less than three months of financial reserves to fall back on.
Nationally, the picture was just as grim. Charitable giving fell by 2 percent in 2008, only the second decline since 1956, according to a report by the Giving USA Foundation. That decline represented a $7 billion loss to charities. The same report found that 40 percent of foundations reduced their giving in 2008.
Someone else’s kid
Even one of Miami-Dade’s most successful charitable organizations has struggled.
For the past 25 years under the leadership of Ruth Shack ’70, the Dade Community Foundation, Miami-Dade’s only permanent endowment, distributed nearly $110 million to nonprofits. And while it has managed to maintain its annual budget during the recession, it did not have sufficient funds to meet the massive increase in demand, says Shack, who stepped down as president at the end of 2008.
And when one nonprofit is forced to shut down or severely scale back its services, the entire community suffers, she says.
A March survey conducted by the Nonprofit Finance Fund, a New York-based nonprofit advocacy group, found that 52 percent of nonprofits anticipate the recession will have a long-term or permanent negative impact on their organization.
Shack’s main concern is that there is a broader trend taking place that could mean less money for all nonprofits in the future, regardless of the economy. For years the government recognized that the nonprofit sector could often deliver vital services and address unmet needs quickly and efficiently. As a result it provided widespread funding.
Unfortunately, Shack says, there has been a slow move away from providing money to nonprofits that has coincided with a growing anti-tax, anti-government sentiment that has worked its way into our collective national psyche.
“It’s a very different attitude [than it was] when I started not only towards the government but all institutions are suffering from a lack of respect from the public. People want the bus to run on time, but they don’t want to have to pay for it. They want health care, but they don’t want to have to pay for it. They want public education but for someone else’s kid.”
The Immokalee Foundation, however, under the leadership of Laudise, has managed to avoid a reduction in either its services or donations. Its anomalous success is a result of anticipating the problem early and taking the necessary steps to address it, Laudise says. And the biggest step he took was instituting a business-orientated approach that focuses on outcomes and accountability.
At a time of national belt-tightening, people will only spend on the essentials and what are seen as wise investments, he explains. If he was going to go to a potential donor, Laudise wanted to be able to show them, through measured objectives, that their money would be well spent.
For instance, the high school graduation rate in Immokalee is 50 percent but it increases to 94 percent for students enrolled in one of the Foundation’s programs, he says. With such tangible evidence of success in hand people feel more comfortable giving.
When the Immokalee Foundation hired Laudise four years ago it had 700 donors. Now it has more than 2,000.
This outcome-based strategy has kept the donations coming in during the recession, but that alone isn’t enough to protect nonprofits from the failing economy, he adds.
When Laudise approached his board with the bad economic news two years ago, he made it clear that they were going to have to watch every penny.
One of the areas where he made improvements or adjustments was their granting system. Each year the Immokalee Foundation gives thousands of dollars in grants to local organizations, but it never audited these grants to determine if the money was being well spent.
To survive the recession Laudise also streamlined administrative costs, which meant temporarily sacrificing the addition of certain employee benefits such as health care.
“I could provide health care but I might have had to lay someone off,” Laudise said. “As we move out of the recession we’ll go back and look at these things.”
At Pass it On Ministries, Dalrymple has depended largely on grants to weather the economic downturn.
“I’m continually writing grants. Sometimes it seems like it’s all I do. We had to decrease the amount of food we distributed for just one week and then we eventually got the money we needed to stay open,” she says.
Pass it On’s grant-writing abilities were greatly enhanced when a donor provided them with a computer program that keeps track of the effectiveness of their services. Now they can provide potential investors with statistical proof of the organization’s value, something many nonprofits are unable to do.
But as Miami-Dade’s only all-volunteer run food pantry, Pass it On depends just as much on its volunteer workers as it does money. And during a recession, many people find it is just as hard to donate their time as it is their money, Dalrymple says.
So to keep Pass it On running Dalrymple has renewed a relationship with her alma mater.
This fall more than 300 students from Barry University’s Department of Theology and Philosophy have committed 10 hours each of community service to 13 local nonprofits including Pass it On.
“My main purpose in reconnecting with Barry is helping the University realize its potential to instill and cultivate the volunteer spirit,” Dalrymple says. “This gives students as well as alumni a way to continue to reach out and touch the lives of people in true need.”
But it’s about more than just helping those in need, says the Rev. Mark Wedig, OP, PhD, chair of the Department of Theology and Philosophy.
“This isn’t just about our students feeling good about themselves. We want them to look at the structures that are holding people back in the hope that they can make meaningful and long-term changes in society,” he says.
The best way to make those changes is to teach people how to help themselves as opposed to just offering them a free meal, Dalrymple adds.
“I live according to my faith and the belief that my God is good and generous. He has given me the opportunity to help those in need and together with these students we can lift people up by teaching them to lift themselves up.”
Finding new sources of revenue and volunteers is important. But in order to survive, nonprofits need to do a better job illustrating their importance to an increasingly skeptical public and government, Shack notes.
“Nonprofits are the last safety net for so many and they need to show what would happen to all of these people if they weren’t there. If nonprofits are not supported, we’ll see the demise of quality education and a great lessening of the health of the community, both physical and psychological.”
In the end the recession may play out like social Darwinism, Laudise says, with only the economically sound nonprofits surviving.
“Our generation has been fortunate. We’ve never been through anything like the Great Depression, so we undervalue the rationale of living beneath our means and saving for a rainy day,” Laudise says. “We all need to evolve into nonprofits that are more laser sharp in delivering services, more responsible to their constituencies and more purposeful. The ones who can’t do that won’t make it.”