January 1, 2013

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A Smart Investment

Businesses Focus Charitable Giving on Filling Education Gaps

Peri Kinder

January 1, 2013

For more information, visit www.utahcf.org.

Thinking Outside the Donation Box
It’s been a dismal few years for nonprofits in Utah. Since 2008, The Community Foundation of Utah has followed the progress of the state’s nonprofit groups to determine how they are dealing with the recession. The trend has demonstrated a steep decline in donations from corporations, foundations and individuals, even though Utah has always ranked at the top of the nation for charitable giving.

Although donations haven’t yet jumped back up to 2008 levels, human service organizations have seen a 67 percent increase in requests for help, especially from residents who lost their jobs during the last few years. And the demand for services is expected to only grow larger, with no sign of slowing down.

As funds dwindle, 31 percent of Utah nonprofits say they have less than three months of operating capital and only 39 percent report sufficient resources to keep up with the demand for this year. Fewer than 20 percent of nonprofits think things are getting better.

“With ballet, arts, music, cultural organizations and human services, nonprofits affect the quality of life in the state,” says Fraser Nelson, executive director for the CFU. “Big companies locate here because of the quality of life and cultural opportunities. But it’s a very difficult time for nonprofits.”

After years of decline, nonprofits aren’t waiting for donations to bail them out. They are turning to entrepreneurs and business leaders to help create new opportunities to bring in funds. In a growing trend, nonprofits are beginning to create their own businesses

The Head Start program offers early childhood development programs for the children of low-income families, also providing medical services and healthy meals. As the program’s funding continued to wane, Head Start leaders organized a kitchen where people in the program can bake and sell snacks to other daycare centers. Not only do snack sales bring in much-needed revenue, participants in the kitchen get job training and experience.

Another nonprofit, Spy Hop Productions, mentors young people by teaching them how to use digital media to find their voice and affect positive change in the world. To boost its revenue, Spy Hop created Phase 2 Productions, where graduates of the Spy Hop program create professional web videos for businesses and other organizations.

“These young people create high-quality video products, generating enough revenue to cover all the costs of doing the work,” Nelson says. “Spy Hop is building a workforce.”

Getting entrepreneurs involved with nonprofit groups has been a great payoff for all involved. The business leaders enjoy solving tough problems and the nonprofits develop a line of revenue that can keep programs operating while reducing reliance on annual giving. Organizations like Columbus Community Services, Odyssey House and Valley Services hire members of a population that have been marginalized, with limited education or employment opportunities.

“These people learn how to interact with a member of the public and develop basic business work skills,” Nelson says. “If you’ve been in prison or on the streets, it’s hard to jump back into the workforce. You have to learn how to work.”

By enabling nonprofits to generate income, hire and train people who need assistance, and provide a service to the community, the drop-off in giving won’t be felt so acutely.

“We are so fortunate that the entrepreneurial spirit has been embraced by the nonprofit organizations and the businesses that are helping to create these nonprofits,” Nelson says. “We’ve had great help from the business sector.” 

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