INTRODUCTION | VPP LEARNINGS | WORKSHOP SUMMARY |
Pre-workshop Reading
Materials | List
of Participants |
Action Ideas | Additional
Resources | Acknowledgments |
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Report (PDF) |
On Tuesday, June 3, 2003, McKinsey & Company
facilitated a workshop for Venture Philanthropy Partners (VPP)
to explore the "Implications of the Changing Funding Environment
for Community-Based Nonprofits Serving Children of Low-Income
Families." Eighteen participants from, or with past experience
of, a variety of sectors—including federal and state government,
community-based nonprofits, foundations, nonprofit and philanthropic
affinity groups, high net-worth donors, public policy, and high-engagement
philanthropic organizations—provided insight into the challenges
and opportunities of this changing environment.
WORKSHOP BACKGROUND
Community-based organizations (CBOs) serving children of low-income
families, particularly in the National Capital Region, simultaneously
face a rapidly changing funding environment and a steadily rising
need for services from the communities they serve. Social service
organizations are feeling the impact of cuts to their core funding
streams, as the economy continues to flounder, foundation endowments
and giving are down, and state and local budgets experience record
deficits. Programs and nonprofits are increasingly vulnerable
to impending federal budget cuts. At the same time, advocacy efforts
to affect public policy have suffered greatly. Executive directors
are, by necessity, focused on protecting services and staff while
private foundations have not provided significant support for
the development of a strong advocacy capacity for youth- and family-serving
organizations.
VPP first documented its observations on the impact of funding
cuts in the fall of 2001 in a position paper called, “The
Perfect Storm”. VPP’s work to strengthen the capacity
of its investment partners—seven community-based organizations
in the National Capital Region that serve children and their families
through a variety of services—confirmed and increased concerns
about the impact of these funding cuts.
In order to better inform its own work, VPP reached out to thought
leaders across the philanthropic, nonprofit, and public sectors
through the June 3rd workshop. The meeting’s purpose was
twofold: 1) to gain general agreement on the picture of the environment
facing community-based nonprofits; and 2) to generate ideas for
ways to support or enhance the work of these organizations.
In advance of the workshop, McKinsey conducted over 30 interviews
with invitees and other experts. They also analyzed and synthesized
existing relevant data and research (see Appendix A and background
reading) on the particularities of the National Capital Region
relating to CBOs, the funding and service demand trends during
the late ‘90s, the “squeeze” years of 2001-2003,
and key forces affecting evolution through 2010. This material
provided a common context and starting place for workshop participants,
who spent much of the day brainstorming ideas and strategies for
responding to the funding situation.
The workshop met the intended objectives, confirmed the core
assumptions and implications of this environment, and provided
new insights and considerations to VPP’s understanding of
the climate and opportunities available to community-based organizations.
The results will help VPP more effectively support CBOs serving
children in the National Capital Region to strengthen service
provision and grow to scale.
This report summarizes the ideas, key observations, implications,
and examples from the workshop. While the dialogue was focused
in part on CBOs in the National Capital Region, the more general
implications and suggestions have applicability to other urban
regions. While extrapolating this information and applying these
opportunities to other areas, keep in mind the particularities
of the National Capital Region, particularly the influence of
federal government on the regional economy in the form of contracting,
procurement, and research dollars.
