NOVEMBER 2016 • Volume 12 • Issue 11 1 Local Nonprofits Face Major Issues. Together, We Can Help. According to a 2015 study by NYC Economic Development Corporation, there are currently over 35,000 nonprofits in NYC, with spending well above $33 billion. These nonprofits employ 600,000 workers, which equates to 19% of the city’s total private workforce. Roundtable Discussion with Local Nonprofits We recently hosted a roundtable discussion to address the concerns of our local, Queens-based nonprofits. We invited and were joined by ten organizations, with the goal of finding ways to help these groups. Often, as we know all too well, nonprofits operate with small staffs and very full bandwidths. As the Queens Chamber of Commerce, we wanted to listen and find ways to advocate on their behalf. Here are some of the issues discussed at the roundtable: Fundraising The Department of Youth and Community Development (DYCD) is the primary source of funding for many local nonprofits. While this organization serves an incredibly important function, several of our members felt they rarely received funds in a timely fashion. Second, there are many alternative sources of funding, but most nonprofits do not know where and/or how to apply for these funds. This becomes more problematic as there is a cap on many loan funds, which the nonprofits usually hit and exceed. Finally, fundraising is difficult. The reality of the situation is that many small, well-established nonprofits have not adapted to new technologies, making it more difficult to know-of and access funding. Nonprofits need to build relationships with corporate and for-profit businesses so they can best align themselves to receive donations and sponsorships. As discussed below, this may come down to proper board selection. Board Selection The best way to get funders is to get them involved in nonprofit boards. However, as is typically the case, not many people know what to do when they are on a board of a nonprofit. Therefore, the newly-appointed board members stop attending meetings, cannot come to a consensus, or may not have been suited to be on the board in the first place. Board members are sometimes not diligent in spreading the word about the nonprofit with which they are associated. This may be because the board member is not passionate about the mission of the nonprofit or is too busy with his or her regular job. Getting board members to promote their organization is extremely important, as it opens up opportunities for potential funders. Increasing Labor Costs It is becoming more difficult for local nonprofits to keep up with increasing minimum wages. While the NY State has increased the mandatory minimum wage, it has yet to do anything to offset the crippling financial burden placed on these businesses. If the state is forcing companies to pay more for their employees, it should provide certain subsidies to balance out the difference. More and more advocacy groups, such as the Human Services Council, are becoming aware of this, and are taking steps to remedy the situation. Next Steps The Chamber will be scheduling matchmaking events which pairs nonprofits with Chamber members. These will be very similar to speed-dating/speed-networking events. Those who are interested in sitting on a board will meet briefly with various nonprofits, and the nonprofits will be able to vet numerous candidates and then select the appropriate one. We are also planning several panel discussions where donors can come and talk to nonprofits about how to access funds and properly fundraise. Following this, we plan to have another matchmaking event which pairs donors with the nonprofits. As you will see throughout This is Queensborough, many advocacy groups have offered suggestions and advice which will hopefully help your nonprofit. The Queens Chamber of Commerce is a Nonprofit The Queens Chamber is a registered nonprofit, or 501c6, as we promote the common economic interests of all commercial enterprises in the borough of Queens. Our mission is to advocate for, educate, and engage local businesses. Further, the Queens Chamber Foundation is a 501c3. This Foundation was created to provide higher-education scholarships to those deserving individuals in the borough. If you are looking to become more active with a nonprofit, whether to sit on a board or become engaged in a committee, please call the Chamber at 718-898-8500. THOMAS J. GRECH EXECUTIVE DIRECTOR OF THE QCC According to one source, as of July 2016 there were almost 9,000 nonprofits in Queens alone. Of the ten largest private-sector employers in the state, five are nonprofits. In New York City, the number jumps to seven out of ten. Needless to say, the nonprofit sector is contributing in a significant way to the city’s economy. The challenge, though, is helping the smaller nonprofits grow into larger nonprofits. We must bring together much of New York City’s nonprofit leadership in a way to recognize the important economic and social impact of this sector to all New Yorkers. After speaking with numerous nonprofits, some of the major issues I have found facing local, “neighborhood” nonprofits are the following: a shortage of talent, limited financial resources, increasing labor and real estate costs, and a need for affordable and mission-driven strategic counsel. Talent Hiring top talent represents a continual challenge. While nonprofits want to hire the best and the brightest, pay is not very often commensurate with experience. When the experienced nonprofit executives retire within the next decade, fueling the talent pipeline with younger, experienced staff will pose a challenge, as these individuals will be in high-demand in both the private and public sectors who have the ability to pay more. In addition, nonprofits are further challenged by financial resource constraints. Resource constraints stem partly from the reluctance of foundations to fund administrative overhead as well as the lack of built-in cost escalations in government contracts. Further, these small, “neighborhood” nonprofits often fall under-the-radar of big-name philanthropists and donors. Increasing Labor and Real Estate Costs Local nonprofits stay local for a reason: they want to help their communities and are passionate about making a difference in their neighborhoods. While passion is paramount in the mission of a nonprofit, passion does not pay the bills. Local nonprofits, therefore, must compete with the exponential increases in real estate and labor costs. Yes, it is great to pay an employee a higher minimum wage--unless those increased payments constrain your number of staff or force you to reduce expenditures elsewhere. Same goes for real estate costs. The simple fact is small nonprofits in high-rent neighborhoods must seek subsidies anywhere they can. Strategic Counsel One of the main solutions to the problems above is to hire an affordable consultant. This may be a local advocacy group, such as Lawyers Alliance, or another of the many whose missions are to aid nonprofits in just this way. Access to strategic counsel can help spur innovation and creativity in order to ensure a nonprofit’s future sustainability. Looking to the Future While the above is an iteration of the challenges of many nonprofits, we must face the realities of living in such a highly-competitive city. As such, I implore our local nonprofits to contact us at the Queens Chamber of Commerce and let us help make the connections for you. MAYRA DIRICO PRESIDENT OF THE QCC
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