Seeing Nonprofits as Businesses
For years I’ve wished that the programs of the Small Business Administration (SBA) were available to nonprofit organizations. The SBA is all about strengthening the country’s economy, and as a business banker the SBA was at the top of my list of resources for entrepreneurs as they started and grew their businesses. When I made the change to work exclusively with nonprofit organizations I was disappointed to lose access to those programs. Nonprofits are businesses, after all, with a significant role in employing people and generating economic activity. Minnesota Council of Nonprofit’s Minnesota Nonprofit Economy Report for 2008 reports that nonprofit employees represent about 10% of the states’ workforce, paying $12 billion in wages.
What I’ve missed most were the Small Business Development Centers that offer workshops and one on one help and the SBA loan programs that provide crucial growth funding. In a way, Nonprofits Assistance Fund and other capacity building organizations have filled this role for nonprofits.
Potential Nonprofit Resources
I’m very glad to know that the beginnings of some new resources for growing strong nonprofits are contained within the Serve America Act, passed in the last week in both a Senate version and House version. The President is expected to sign it next week. The amendment that creates a new program for nonprofit capacity building is summarized here by Independent Sector.
Housed within the Corporation for National and Community Service, the bill authorizes $25 million over five years to provide organizational development assistance to small and mid-size nonprofit organizations, in particular to “strengthen small charities around our country, especially where resources are scarce.”
I’m hopeful that we can get these resources out in the community soon, focused on building strong community organizations that know how to balance mission and management. I’ll keep waiting for an SBA loan program for nonprofit businesses. In the meantime, if you are in Minnesota and need working capital or a line of credit, Nonprofits Assistance Fund’s loan fund is here.
Here, here! Couldn’t agree more.
Comment by Suzy Meneguzzo — April 2, 2009 @ 7:39 am
This is an issue we’re struggling with in Western New York. Having come from the economic development field and now working strickly with arts and cultural non-profits, to me the lack of resources and support systems for nonprofits is very frustrating. We’ve been unable to tap public funding sources, including public workforce investment funds, even when we tried to partner with/package ourselves with the tourism industry. Luckily our industrial development agency understands how this issue is resticting our sector and is willing to consider ways they might help. We welcome any suggestions from other communities — I will look into your Nonprofit Assistance Fund and also the Serve America Act in hopes that it can provide these much needed resources.
Comment by Florine Luhr — April 3, 2009 @ 8:56 am
I’ve been beating the drum for a Nonprofit Business Administration for some time” http://nonprofiteer.net/2008/06/25/an-sba-for-charities/. Glad to hear that you agree, and that government resources are finally being sent in that direction.
Comment by Nonprofiteer — April 6, 2009 @ 7:40 pm
Thanks, Nonprofiteer, for the comment and the link. The project within Serve America is a very small down payment on the idea but at least it’s a start.
Comment by Kate Barr — April 7, 2009 @ 8:05 am
Kate,
Excellent point about making SBA services more accessible to nonprofits. As we discussed, another way of making resources more available to nonprofits would be to allow consultants to allow time spent on pro bono services as charitable contribution the same way that donated products are. I will take your suggestion to follow up with the National Council of Nonprofits about getting this type of national legislation passed. Thanks for your advice.
Howard Levy, Principal
Red Rooster Group
Comment by Howard Levy — May 26, 2009 @ 7:43 am