Conference Notebook

June 03, 2008

Seven Challenges for Charities

What ails the charity world?

Alan Abramson, professor of government and politics at George Mason University, listed seven things at the final session of the Nonprofit Congress:

Loss of public confidence; fiscal stress; increasing workloads due to bad economic times, a growing number of older Americans and immigrants in need of aid; more competition from both for-profit and nonprofit groups; increasing pressure to perform; personnel problems such as burnout and intergenerational tensions; and coping with all those problems in a greater media spotlight.

Mr. Abramson, also a senior fellow at the Aspen Institute’s Nonprofit Sector and Philanthropy Program, said those pressures have prompted some charities to act more like businesses, seeking fees and other types of revenue; emphasizing efficiency, offering higher salaries; and marketing themselves. But that sometimes creates new problems, such as raising questions about whether they deserve their tax-exempt status, he added.

What are other options?

Perhaps charities should look seriously at new legal forms, such as the low-profit, limited liability company, or LC3, which is designed for companies with charitable missions. “Do we need a sorting out, splitting up at the sector that really reflects the diversity in the sector?” he asked.

He also urged nonprofit groups to become better advocates for themselves. “Unfortunately the sector now speaks with too soft a voice except when under attack,” he said.

Finally, he said they should develop a “firmer, more convincing vision,” perhaps with the help of academic researchers, to demonstrate how they make a difference. He said that could be “the most important challenge for nonprofit leaders in the years ahead.”

— Suzanne Perry

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