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.
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Because of the doubling of the standard federal tax deduction, and other possible changes,the nonpartisan Tax Policy Center projects that tax reform could reduce charitable giving nationally by $12 billion to $20 billion in 2018. That’s in part because of
(One bit of good news for nonprofits: The final version of the bill allows them to continue to sell bonds with tax-free interest to pay for capital improvements and fund programs.)
Combined with federal cuts to health care and social services funding, in addition to steep declines in similar funding at the state level in North Carolina 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 holds 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 of these nonprofits are labors of love. Forty-three percent of them have budgets of less than $100,000, and 84 percent operate on less than $1 million. 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, shrinking charitable support and dwindling government funding will only intensify the challenges. That’s why Tedrow and her team are rallying their 1,400 members, which range from major universities to small, grassroots organizations, in an effort to alter the tax-reform bills.
Whether they succeed or not in that effort, their agenda will remain ambitious in 2018 and beyond. Among the Center’s top priorities in the New Year: bolstering the talent, operational efficiency and overall sustainability of our state’s nonprofits.
Tedrow wants to help nonprofits find more innovative ways to leverage technology to deliver better training for staff and improved services for their 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. With the health insurance market in flux, her team is also investigating how to make health insurance available to nonprofits with less than 50 employees, building on the insurance plans it currently extends to nonprofits with more than 50 employees.
Leadership is also crucial. A study released last year by the Center, “Countdown to the Inevitable: North Carolina Nonprofit CEOs in Transition,” reported that more than half of our state’s nonprofit CEOs expect to leave their positions in the next four years. But nearly three-quarters of nonprofits have not created a board-approved succession plan for their top leadership role. As the Center helps nonprofits fill these gaps, it will emphasize the development of a cadre of racially and ethnically diverse emerging leaders through its “Walk the Talk” initiative.
As uncertainty at the state and federal government levels 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 email@example.com and followed on Twitter through @cgergen.