Nonprofits and Financial Stability

In today’s fast-paced world, societal change and organizational growth continue to change hand-in-hand. How arts organizations and the public interact is an aspect of work which is in development. As the public’s interest’s change, the ability for non-profits to survive amongst changing trends becomes more and more difficult. Diversifying sources of funding is paramount in sustainability efforts in the modern world. How these organizations connect with their local communities also helps influence these sources. An analysis of current arts organizations and their sources of funding will help to explain arising social and environmental trends and how different types of non-profits react and survive.

Specifically, a look into how each of these organizations functions will give much detail in their financial histories and what specifically has been done to combat problems and changes.

Many types of non-profits will be analyzed from Dance Studios, Symphony Orchestras, Museums and art galleries as well as community organizations. Each has their own methodology in practice but have seemed to mimic and develop their approaches based upon other market successes.

The most difficult aspect of keeping these businesses afloat lies in their multifaceted set of needs. This is seen in their responsibility to not only uphold personal missions and values, but to keep a steady source of funding possible by maintaining and flourishing donor and constituent relationships. In such a changing world no source of funding can feel guaranteed, making the entire work space very difficult to keep afloat. The shifting climate of being more engaged with communities and reaching out and creating new audiences has become much more important.

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As we continue to expand our social connections and cultural preferences, the sector will continue to have issues adapting to new trends, but, it is in such acts of adaptation that these organizations really prove their power of survival. Keeping the arts alive and preserving community relations is of the utmost importance, despite the immediate problems of funding. Running a non-profit organization requires an entirely unique set of humane and progressive ideals which keep the end goals in mind without sacrificing the integrity quality of the product being displayed. To better understand key differences in the factors of financial stability amongst both non and for-profit organizations, it helps to identify and contrast the long term goals of each. The penultimate strategic goal in for-profit organizations stands to gain and acquire market share and profits. With nonprofits, their financial outcomes are simply a way of accomplishing their social mission (Hackler and Saxton, 2007). Therefore, a nonprofit’s ability to accurately pursue such missions is inextricably linked to financial sustainability. The majority of revenue for nonprofits seem to come from charitable donations and contributions as well as tax appropriations. These all depend on the organization’s measured efficiency and well they are achieving their social mission, most commonly known as the ultimate goal. This organizational value in turn develops public value. ultimate strategic goal. This, in turn, creates public value (Moore, 2000). In stark contrast to such for-profit businesses, nonprofits face many challenges in being able to balance the need to both promote and prioritize social missions with the constant need for actual profitability over the long term to all for growth and internal development.

For most of these organizations, a heavy challenge is the pursuit of this balance of maintaining financial stability with the maintenance of qualitative and consistent programming. Looking at these factors as separate goals seems to hinder long-term growth, while finding the most reasonable combination of staff, activities and efforts at a realistic cost per participant continues to baffle program developers and administrators. The financial sustainability of nonprofits rests in the successful use of communicating their missions and providing services to the community which are presented in a way which allows for education and awareness of these services. Marketing for nonprofits offers the opportunity to spell out what exactly makes the organization distinct, what its known for, and why the work it is doing is even relevant.

Nonprofit organizations who approach marketing by tugging on both the head and the hearts of their audiences have had the most success in communicating a brand and identity. The struggle for many nonprofits lies in the balance of using the traditional “pull” strategy, which comes to audiences and pulls them towards a desired outcome, with the complementary use of a push strategy, which identifies an institutional perspective trying to connect audiences with such information with their own interests. In the past few years, nonprofits have been utilizing and capitalizing upon the current technology and social media booms through increased focus and efforts. In spite of this, such social marketing may not work or be appropriate for every single social missions and every nonprofit, since it is more expensive and needs a capacity for the development of these social marketing tools. With regard to changing trends, social marketing has been very successful tool of communication for organizations seeking research in the change of peoples’ behaviors (Williamson, 2009).

Using tools like social media websites, organizational websites, and informational live feeds has the current potential to help an organization stay connected with their community in real time, as well as communicating its operations and missions to current and possible future funders. One such organization currently utilizing this practice is the Fort Worth Symphony Orchestra, who recently hired a full time position for a marketing and social media coordinator position, in charge of all social media outlets which advertise events, share information and operations, and keep the community informed. Despite having been without a CEO since July of 2017, interdepartmental communication and inventive committee collaboration have helped the organization thrive and keep up with current changes in information technology. The symphony has even recently integrated and updated their organizational website which allows for even better community and audience communication and outreach. The FWSO came from their past experience of having a small deficit to now being financially stable, with responsiveness to the community being among its greatest strengths.

However, an outdated organizational website is a signal of poor standing to potential funders who may use and review the site to gather and collect information about the organization. A possible potential donor seeing such a website may see it as a sign of an organization’s stagnation (Bray, 2010, p. 423). To extend the available accessing of information all across the community, there must be an increase in capacity by giving training to staff and utilizing technology sharing for programs in addition to administration. Though these possible gains can occur though social media marketing, current research explains why technology is not a clear-cut substitute for direct communication in meetings and face to face conversations. The best solution is not to completely redevelop an approach, but to instead combine information technology with the older style communication techniques which help to build a strong community reputation through acts of good service and interests (Schneider, 2003).