Each year, the Alliance for Children and Families, a membership organization serving private, nonprofit human service organizations throughout the U.S. and Canada, publishes Scanning the Horizons, Surveying the Nonprofit Landscape, Inspiring Strategies for Success. This publication is an executive summary highlighting the issues, uncertainties and factors impacting the nonprofit sector. It serves as a radar system to organizational leaders in planning and strategy development. Human service professionals from across the county work with Alliance staff to develop the most significant issues. These then become trend statements for the upcoming year.

For 2010-2011, the trend statements are:

• Funding stress and instability is forcing nonprofit human services to examine alternative funding models. 
• Continued emphasis on community-based delivery of services, combined with overall reduced funding for group and residential care, is impacting how services are delivered and for whom. 
• Internal and external forces are affecting the ability of organizations to provide adequate services, pressuring nonprofits to merge, consolidate or collaborate. 
• Multiple stressors are impacting the nonprofit workforce, increasing turnover and burnout. 
• An increasing emphasis on evidence-based practices and outcome measures is necessitating a higher standard of accountability for nonprofit human services.

So how do these trends “play in Peoria?” Central Illinois is fortunate to have a sophisticated, professional human service system that provides critical care and treatment, strengthening our communities, supporting families and caring for the vulnerable. The employees and leaders in the human service sector are mission-guided, following a philosophical belief in the betterment of society. Yet today’s leaders must also have an adaptive spirit and be strong business managers and risk-takers.

The future of the sector is directly tied to its workforce. An intergenerational workplace requires negotiation on differences of engagement, technology, professional development and work-life balance. Competition for quality staff will increase as corporate opportunities for mission-based work increases. Organizations will be required not only to address changing employee demographics, but also cultural diversity. While most nonprofits have diversity among the clients they serve, few have that same diversity at the management and board levels. Success will depend on a nonprofit’s dedication not only to whom they serve, but how they are managed.

The human service sector has shown expertise in collaboration for many years. The scarcity of resources has required the sector to be frugal, strategic and open to new models of care. Because of the complexity of needs, organizations have partnered and collaborated in all phases of service delivery, from program development to funding to evaluation. The ability of an organization and its leaders to objectively understand the organization’s social value and its unique, market-driven products will be key to future strength. Locally, over the course of the last 24 months, organizations have struggled to recreate themselves. Some have merged. All must be open to new business models and structures, from administrative service organizations to low-profit limited liability companies.

Demonstrating results in the human service sector involves both process metrics and client outcomes. Increasing emphasis on evidence-based practices and outcome measures requires a higher standard of accountability. Both the public and the charitable dollar have become more restrictive and carry with them increased stewardship like never before. Corporate and public funders are looking for the social dividends paid on their capital investments.

The days of a donation or grant solicitation without a well-thought, developed funding proposal demonstrating program outcomes are long gone. For small organizations, this accountability and stewardship can be most challenging. Both require an information technology infrastructure and a knowledgeable workforce with highly developed communication systems. The capacity-building investment by the nonprofit to meet these requirements is not a one-time expense. This evaluation process is fluid; the status quo will not meet the expectations of funders who will continuously raise the bar in expectations of client improvement.

Funding stress and instability leads organizations into short-term thinking in order to deal with immediate financial problems. In the past year, how many “first annual” events have you heard spoken of? Many organizations develop new special events to generate immediate cash flow. Events can produce income, but at a cost. Typical events require high levels of staff and volunteer resources for planning and implementation. Special events are generally annual and not focused on building a long-term strategic relationship with those participating. This mindset works against the time-honored principles of philanthropic strength. In solid fund development, research demonstrates the highest cost/benefit ratio is from long-term philanthropy—the building of philanthropic equity within the organization.

The human service sector models of care have changed over the years, shifting from in-patient and on-site support and treatment to home-based interventions. This community-based care proves to be more successful and cost-effective for many adults and children. Though residential care is expensive, there are certain clients who require this intensity of supervision and treatment. But residential and community-based delivery systems are underfunded. Organizations operating residential treatment centers have overhead or occupancy costs in addition to the expense of providing the treatment itself. Those nonprofits with high-quality facilities must determine the long-term usefulness for such capacity. If an organization is dedicated to maintaining facilities, it must niche its service array in order to maintain fiscal efficiency.

Where will we go from here? The nonprofit sector is at a turning point. Our nation and state continue to face a mixed economic outlook. The sector as we know it today will evolve and blend with the corporate and public sectors. Changing demographics and technological opportunities that we can’t even imagine today will create an environment in which those who are creative, open-minded and strategic will flourish. iBi