Opinion

The next challenges for NC’s nonprofits – Gergen and Martin

Jeanne Tedrow knows exactly what is required to take a nonprofit from concept to impact.

After co-founding Passage Home in 1991, Tedrow spent 25 years guiding the organization, which focuses on affordable housing, vital support services for families, and community development in Wake County. Starting with just a small band of volunteers and a budget of less than $1,000, Passage Home has grown into an operating budget of $3.8 million, amassed $10.5 million in real-estate assets, hired nearly 35 staff members and attracted many volunteers. Each year, it helps hundreds of families lift themselves out of poverty with plans that include housing and support services.

Tedrow’s next challenge: positioning North Carolina’s entire nonprofit sector to accelerate its performance.

As the new president and CEO of the North Carolina Center for Nonprofits, Tedrow has taken the helm of the state’s leading advocacy group for nonprofits at a tumultuous moment, with federal tax reform posing serious threats to the sector.

Because of a proposed doubling of the standard federal tax deduction and other possible changes, the nonpartisan Tax Policy Center projects that tax reform will reduce charitable giving nationally by $12 billion to $20 billion in 2018. Meanwhile, the potential repeal of the Johnson Amendment, which prohibits nonprofits from endorsing or opposing candidates for public office, could inject partisan politics and mistrust into a sector that has long prided itself on neutrality.

Combined with federal cuts to health care and social services funding, in addition to steep declines in similar funding at the state level in recent years, the collective fallout could be devastating.

“If you really take a look at all of this together, it’s going to create a very negative impact on the nonprofit sector,” says Tedrow, who has a master’s degree in public policy from Duke. “We’re putting communities at risk.”

Information updated from the 2015 economic impact report by the Center found that nonprofits generate more than 400,000 jobs in North Carolina – or 1 out of 10 jobs in the state, contributing $42.5 billion to the state’s economy. Most are labors of love. Forty-three percent have budgets of less than $100,000, but they are crucial to the social safety net. The Nonprofit Finance Fund’s most recent State of the Sector Report showed, for example, that 78 percent of our state’s nonprofits had experienced an increase in demand – with 60 percent of them unable to meet those needs.

With scarcity of resources already a major issue, Tedrow and her team are rallying their 1,400 members, which range from major universities to small, grassroots organizations, to alter the tax-reform bills.

Whether they succeed or not, Tedrow wants to help nonprofits leverage technology to better train staff and improve services for clients. She sees an opportunity to streamline operations in nonprofits, which are chronically short of general operating support, by using cloud-based services to help with back-office services. Her team is investigating as well how to make health insurance more widely available to members.

Leadership is also crucial. As the Center helps nonprofits grapple with an expected wave of CEO retirements, it will emphasize the development of a cadre of racially and ethnically diverse emerging leaders through its “Walk the Talk” initiative.

As uncertainty continues to swirl, Tedrow says it’s critical for nonprofits to focus on the things they can control. “There are big challenges,” she says, “but the nonprofit sector is innovative and resilient.”

Christopher Gergen is CEO of Forward Impact, a Founding Partner of HQ Community, and author of Life Entrepreneurs: Ordinary People Creating Extraordinary Lives. Stephen Martin is chief of staff at the nonprofit Center for Creative Leadership in Greensboro. They can be reached at authors@forwardimpact.info and followed on Twitter @cgergen.

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