Doing what must be done – for nonprofits summer is no season of respite

Tammy King serves hors d'oeuvres with a smile at the annual Sail Martha's Vineyard benefit dinner and auction. — File photo by Susan Safford

The nonprofit organizations of Martha’s Vineyard deliver our babies and sit with us when we’re dying. They come rushing to our homes when they catch fire, counsel us when the stresses of Island life become overwhelming, and help us donate life-giving blood when we’re feeling generous and strong.

The nonprofits of Martha’s Vineyard provide healthy places for our children to play, and safe housing for our elderly residents in their later years. They feed us when we’re hungry for a meal, and they dance and sing for us when we need higher nourishment. They work to preserve our historic landmarks and protect the natural beauty of the Island’s wild places, and they build affordable housing that sustains our community’s human ecology.

And yet, we persist in thinking of nonprofits as a narrow, somehow oddball sector on the fringes of the Island economy. The very definition we use to describe these essential organizations begins with a negative: “non.”

Nonprofits, by definition, are enterprises “not commercially motivated.” But this obscures what does motivate our nonprofits: a sense of mission, the conviction that their work, all money matters aside, is meaningful and nourishing and essential to the health of our community.

For the essence of what it means to be a nonprofit, consider this from the most recent annual report of the Martha’s Vineyard Hospital: In its most recent fiscal year, the hospital dispensed more than $6 million in uncompensated care. Retail shop owners talk of “shrinkage,” the cost of goods that walk out of the store without being paid for, but what enterprise in its right mind would put up with losses of $6 million per year? Only one whose mission statement declares, as our hospital’s does, that its care to patients “will be provided to all, regardless of their ability to pay.”

In any arena of Vineyard life, think of the work that’s expensive, that meets a clear need, that’s not likely to be profitable in its own right. Look around and you’ll find that work being done by an Island nonprofit.

The fiscal tripod

Guidestar, an essential Internet tool if you’re studying nonprofit organizations, keeps a database that’s searchable by zipcode. Run the numbers, and you’ll find more than 300 nonprofits listed on Martha’s Vineyard.

On its website, the Martha’s Vineyard Donors Collaborative — a sort of meta-nonprofit set up several years ago to support the community’s nonprofit sector —101 Island nonprofits are listed. They’re a varied lot, at work in fields that range from arts and culture to health and human services, environmental conservation, education and recreation. Their annual budgets range from tens of millions to mere thousands of dollars, but for every Island nonprofit the financial challenge is essentially the same: How can we make enough money at our work this year, so we can still be around next year?

For almost every Island nonprofit, the solution involves the same basic tripod of financial support: fees for services, charitable support, and special summer events. The relative strength of each leg in this financial tripod varies widely from organization to organization, but the basic structure is remarkably consistent.

The Vineyard Nursing Association (VNA), the Island’s primary home health care agency, is a good example. In its most recent annual statement, the VNA reports about $3.3 million in revenue, 89 percent of it from the fees it charges for services. Medicare is the agency’s largest funding source, and private health insurance comes next. Grants and public health funding provide about two percent of the agency’s revenues. And fundraising —approximately $300,000 of it in the most recent fiscal year — provides about eight percent. That’s a small fraction, but enough to make the critical difference between black ink and red ink on the agency’s bottom line.

The charitable support that tips the VNA from operating deficit to a modest surplus comes from two legs of the financial tripod — outright gifts to the agency, and profits from special events. The nursing association’s signature event is its annual clambake, set for July 21 this year at the Field Gallery in West Tisbury. It’s a festive occasion of the sort that is repeated with variations, dozens of times, in the brief window of July and early August: catered food and libations under a big white tent, followed by live and silent auctions.

Summer’s calendar is a parade of similar events, from the Taste of the Vineyard on June 17 to Sail MV’s Seafood Buffet and Auction on July 10, the Featherstone at Farm Neck celebration on July 12, the MV Museum’s Evening of Discovery on July 15, the annual golf tournament to benefit Martha’s Vineyard Hospital on July 18 and 19, and the Possible Dreams Auction on August 2.

It’s no accident that most of the major fundraisers are packed into July and over by mid-August. Island nonprofits are leery of donor fatigue, and plan their events to get at the big givers before that syndrome sets in. (But even the Oak Bluffs fireworks on August 20 and the Agricultural Fair on August 19 through 22, traditional events that sound the summer season’s ending bell, are the projects of Island nonprofits.)

These celebrations do more than raise money for the Island’s helping organizations. They build social connections, fostering a vital sense of community and goodwill. But each major summer shindig is also a drain on staff and volunteer time; planning for next year’s event often begins as this year’s party tent is being packed away. And there’s the question of efficiency: An outright donation goes straight to the bottom line, while a party’s profits must be measured against expenses.

Fundraising dynamics

It’s understating the case to say that the job of raising money for the Island’s nonprofits has gotten harder over the past couple of years. Responding to a survey by the Martha’s Vineyard Donors Collaborative last fall, more than half the Island’s health and human services agencies reported that summer donations in 2009 were down, and nearly a third said giving was down dramatically. This trend comes against a harsh backdrop of community need: In the survey, more than two-thirds of the same health and human services agencies said they’d seen the demand for their services rise during the economic downturn.

Stuck in the middle — between the directors and staff who steer an organization’s path and the donors who support it — are the hard working development directors of the Island’s nonprofits. Just imagine the anxiety of that position — with no control over how well or poorly your enterprise is run, and no control over the purse-strings of the big donors, yet knowing you’ll be judged by the dollars you bring in to keep your nonprofit running.

One such director of development for a multi-million-dollar Island nonprofit agreed to speak for this story, without being named. She cited a trifecta of causes that have had a dampening effect on donations, changing the climate for all the Vineyard’s helping organizations.

First, she said, there’s the economic downturn, which has not only erased a lot of wealth — it has also created paper losses that donors can use to reduce their income taxes. “Now, donors don’t need charitable contributions to offset their income. In fact, they can carry the losses in their stock portfolios over for a number of years. Before, not only was there an altruistic interest in giving, there was a personal benefit, and even a necessity in some cases, to giving big money. Now that’s not true.”

Second, major Island capital campaigns — for the Martha’s Vineyard Hospital and the YMCA — have sucked more than $50 million out of the charitable pond.

And third, a few prominent Island nonprofits have been making news in the past year — in stories that raise questions about the quality of their governance, their leadership, and even their viability. This makes donors ask tougher questions, the development director said: “They have concerns about some Island organizations maybe not living up to their promises, and they need to feel that what they’re supporting is something that’s not just sending their dollars slipping down the drain.”

Narrative and substance

Nonprofit organizations are expected to tell their stories in the most glowing terms possible, but when the narrative gets too far from the reality, this can backfire. Just look at the Island Affordable Housing Fund, which one year was trumpeting $1 million in pledges from a summer fundraising campaign, and the next was announcing it couldn’t make its payments to the Rental Assistance Program. Scenarios like this can have a chilling effect on giving that affects nonprofits across the Island.

In the end, said our source, it’s not about the narrative, but about the substance of an organization’s work: “If you don’t have a good business model that looks like it has longevity, and if you don’t have a demonstrated need for your program or services, and if you can’t show that your services are not being duplicated elsewhere and that you’re collaborating with others to deliver those services more efficiently, then you’re not going to get much support.

“But if you can sit down with someone and say look, our organization is strong, the need for our services is demonstrated and clear, and this is how we’re working with other organizations across the Island to make sure there’s a continuum of service in whatever the field is, whether it’s health care or education or conservation —then donors will support you.”

Nis Kildegaard is a regular columnist for the Times. He has done editorial and consulting work for many Island nonprofit organizations, including the Martha’s Vineyard Museum, the Martha’s Vineyard Preservation Trust, the Martha’s Vineyard Hospital, Sail MV, COMSOG, Vineyard House, Affordable Housing Fund, and Martha’s Vineyard Community Services. He serves on the boards of two nonprofits, the Island Community Chorus and the Martha’s Vineyard Chamber Music Society, and he chairs the Martha’s Vineyard Cultural Council, which dispenses grants each year to Island projects in the arts and humanities.