Organizations and charities are looking to the skills and standards of the private sector to respond to an increasing need for accountability and business acumen in the nonprofit sector.
Research shows an increasing call for professionalization and training in the nonprofit sector, in part due to political and public pressures regarding accountability. As well, increased competition can result in sharper business practices as organizations vie for both individual and corporate donors.
Sam LaPrade, who works as a consultant for nonprofit organizations and people or corporations looking to make charitable donations, says the need for accountability to donors is increasing.
“Nobody wants to give money to a big black hole,” she says. “Donors are becoming more savvy – they want to know the impact.”
She says business skills such as data analytics, board organization, finance and marketing are becoming important tools in the kit for those who work in the nonprofit sector – increasingly, a career as opposed to a volunteer position or side job.
“There’s a lot of learning opportunities for professional development in our sector,” says LaPrade.
For example, analytics, or “the science of fundraising,” can help organizations determine which demographics to target for donations – and how.
“(Organizations) want to know how many people went from $25 to becoming a monthly donor, they want to know what the return on is in terms of investment for things like their events,” explains LaPrade.
Terms like conversion and return on investment, commonly used in the business world, are used to describe new donors who become regular donors and the impact that fundraising events have.
“Donors are becoming more savvy – they want to know the impact.”
“Our donors are much more aware of the costs of fundraising. So we need to be very accountable to that money,” she says. “Because our accountability had to increase, we also had to become more professional.”
This is especially true of corporate givers, says LaPrade, whose knowledge of good business practice makes them aware of these standards in the nonprofit sector as well.
“When a foundation or corporation gives you money, they want an accountability report,” says LaPrade.
The Carleton University Master of Philanthropy and Nonprofit Leadership was first offered in 2013 to address some of these growing trends and needs. The program’s graduate supervisor, Susan Phillips, says the growing sophistication and professionalization of the philanthropic sector made clear the need for a specialized set of skills.
“It’s a sector in which education is an important credential,” says Phillips, adding that with an increase in professionals from other sectors joining the nonprofit sector, a graduate degree may be necessary to help them gain the skills needed.
The key areas covered by the program are public policy, governance and strategic management, financing, and the demonstration or communication of impact.
Phillips says the program reflects the growing complexity of the philanthropic sector, especially with changing approaches to governance and fundraising.
“There’s much greater need for collaboration,” she says, adding that the program attracts a mix of people, some of them with no nonprofit experience and some of them with decades in the field. “People are just going to find career paths in other ways. And we need to encourage those career and leadership paths into the sector.”
Some of the skills taught in the program relate directly to the relationships between corporations and the charities they give to. Phillips says the focus on communicating impact is something corporate donors and millennial givers both value highly.
For Heather Norris, who graduated from the program in FIND, learning to prove and communicate impact was one of the most important things she gained. Though she had 10 years of experience in the nonprofit sector, the program helped her accrue the skills she needed to accelerate her career path; she’s now the CEO at Northumberland United Way.
Norris says measuring impact is increasingly important for nonprofit organizations as part of a growing call for transparency and accountability in the nonprofit sector.
“With this rapidly changing sector, there's this growing expectation for charities to be leaders of best practice when it comes to transparency and accountability, and there's also more focus than ever before on creating longer-term social change,” she says. “Donors want to make informed decisions on where their charitable dollars go.”
Norris says the philanthropic sector needs to utilize the tools of business and good governance to succeed in today’s industry.
“It’s now the business of philanthropy,” she says. “Our organizations work with the same robustness as a for-profit business.”