Southwest Solutions served as the host organization for a special NeighborWorks convening in Detroit to learn and discuss how member organizations can more effectively raise funds and resources, market themselves, and address financial challenges.
The convening took place from Monday, July 30 through Wednesday, August 1. It brought together 65 representatives from NeighborWorks-affiliated organizations in the Midwest and Northeast regions, as well as ten NeighborWorks staff. More than 240 community-based organizations are part of the NeighborWorks national network. Southwest Solutions is a Chartered Member.
On the opening evening of the convening, attendees came to our Piquette Square for Veterans for a tour, dinner, and a presentation about Southwest Solutions. Piquette Square tenants Bill Carroll, Marcus Cobb, and Derrick Westbrook spoke about how Piquette Square has enabled them to rebuild their lives and reintegrate into the community. Dinner was provided by three ProsperUS Detroit entrepreneurs: Hamissi Mamba (Baobab Fare), Nezaa Bandele (Paradise Natural Foods), and Laura Viera Alverado (Tropical Sweets Cakes).
The presentation about Southwest Solutions was well received and, afterwards, attendees expressed their admiration for the range of programs our organization offers, how those programs are holistically combined, and our impact in improving lives and neighborhoods. The presentation featured videos, PowerPoints, and remarks from executive and senior leaders.
At the convening itself, one of the highlights was a keynote speech by Ron Clewer, COO of the Alliance for Strong Families and Communities. Ron is co-author of a recent, comprehensive and groundbreaking report called A National Imperative: Joining Forces to Strengthen Human Services. The report details the serious financial challenges that community-based organizations (CBOs) across the country are facing, the critical role that CBOs play in the wellbeing of individuals, families and communities, and what should be done to ensure the sustainability of CBOs and the social safety net, since about 1 of every five Americans receives services from CBOs.
Among the report’s findings about CBOs that provide social services:
- Nearly half have a negative operating margin over a three-year period.
- Three in 10 nonprofits have cash reserves that cover less than one month of expenses.
- Nearly one in eight human service nonprofits are insolvent, meaning that their liabilities exceed their assets.
- Government contracts currently cover only about 70 percent of nonprofits’ direct program expenses and less than half of all indirect expenses.
The report recommends five important initiatives to put CBOs on a path of financial stability:
- New Financial Strategies. CBOs must develop more robust finance and financial risk management capabilities, including scenario planning, recovery and program continuity planning, benchmarking and self-rating, as well as reporting and disclosure.
- Commitment to Outcomes. Efforts should be focused on outcomes and accountability, with funding targeted to outcomes and results rather than outputs or services delivered.
- A Strategic Partnership Approach. Community-based organizations must look for opportunities for deeper partnerships and networks across the human services sector and related systems. Grants from public and private funders should include allocating financial resources toward partnership development.
- Capacity for Innovation. The human services ecosystem must develop its capacity for innovation through better data sharing and analysis, technological strategies and knowledge and leadership exchange. Public and private funders will also need to recognize the importance of the capacity for innovation, and the need to support that through funding.
- Regulatory Modernization. Regulators should engage in a review and reform of community-based organization regulation, particularly in the area of litigation risk, which has become a serious issue for organizations.
The findings and recommendations have particular significance for Southwest Solutions, as well as other major nonprofits in Detroit, as poverty and need continue to increase in the city, while at the same time CBOs, which are largely responsible for addressing need, are struggling.