What the Media Are Missing

The preceding factors are just some of the reasons why media are presenting little more than episodic, anecdotal or serendipitous coverage of the community sector in the Puget Sound region. By not covering the community sector more effectively, reporters may indeed be contributing to cynicism and despair. We hear about the burglary more often than the block watch. What we see and hear in the news may bear little correspondence to citizens' real experiences of community life. Were there a better exchange of information between local not-for-profits and the media, reporters could be providing citizens with important information they could use to build better communities, and, perhaps, more meaningful lives. Reporters also could be breaking big stories — many with national significance. Consider just these few:

Devolution

Competition, consolidation and shakeout

Intergenerational transfer of wealth

The nouveau riche

The need for leaders

Regulation and accountability

To tax or not to tax?

The demise of corporate philanthropy

Paving the way for trade

Increasing diversity

Health-care mergers

Impact of alternative funds

Speaking of United Way

Rising costs of fundraising

Politics — as usual?

Commercialization

Watchdog on nonprofits

Social entrepreneurship

Breaking through the communication barrier

Devolution
The impact of federal and state budget cuts, known as "devolution," coupled with welfare reform, has been described by some leaders of social-service agencies as "a disaster waiting to happen." If true, the impact will be even stronger in Washington state, where Initiative 601 has put a cap on spending.

Not-for-profit social service agencies receive up to 20 percent of their funding directly from federal grants, and an additional 20 to 40 percent of their budgets come from indirect fees generated by federal programs. Yet, federal budget cuts to state programming alone are projected at just under $2 billion over the next few years.14 Meanwhile, social-service needs are projected to grow at an alarming rate.

Government provides several times as much money to not-for-profits as they receive from private contributions. What kinds of strategies will not-for-profits need to develop to compensate for the limits of public and private giving?

Competition, consolidation and shakeout
At the same time public funding is plummeting, the number of new not-for-profits continues to climb. Competition for resources will become razor-sharp. Not-for-profits can expect to see budget cuts, staff reductions, shifts to part-time or temporary staff, elimination of middle managers and consolidations.15 How will organizations respond? Who will ensure accountability? What will the impact be on those who need services most?

Intergenerational transfer of wealth
Nationally, within the next two decades, an estimated $5 trillion to $10.4 trillion is projected to be passed into baby-boomers' hands. This will be the largest sum ever transferred from one generation to another. While it's estimated that this intergenerational transfer of wealth will create as many as five million new millionaires, an average of $50,000 to $65,000 is expected to be received by each baby-boom family.16 How will this new wealth affect communities?

The nouveau riche
The area's newly-minted techno-millionaires have the power and creativity to be true philanthropic innovators. And yet, few reporters seem capable of articulating this potential in anything other than a "gee-whiz" way. Who will challenge the techno-millionaires to be as creative in their philanthropy as they have been in innovating the industries in which they have made their fortunes?

The need for leaders
The rapid growth in the number of community sector organizations is creating a commensurate need for new leaders. Many board members come to their work with little if any experience, and many not-for-profit staff members have never dealt with a board, according to Nancy Axelrod, former president of the National Center on Nonprofit Boards. There's a strong correlation between board effectiveness and organizational effectiveness. As not-for-profit management grows more complex, expectations of board members will rise. How will Puget Sound-area organizations find quality leaders? How will they ensure that volunteers develop the skills required to be effective stewards of community resources?

Regulation and accountability
Who's watching to determine what kinds of new organizations get not-for-profit status and whether such organizations do, in fact, meet legitimate needs? Who provides responsible oversight for the use of philanthropic resources?

To tax or not to tax?
Cash-strapped municipalities are more aggressively questioning the tax-exempt status of not-for-profits, especially the larger, more established ones that own property. Some states have defined standards that not-for-profits must meet to qualify for a tax-exemption. Who will — or should — lead the debate about how or whether not-for-profits pay taxes?

The demise of corporate philanthropy
In the past seven years, corporate giving has dropped from 2 percent of pretax profit down to about 0.8 percent of pretax profit in the typical Fortune 500 company, according to Craig Smith, former publisher of Corporate Philanthropy Report. Yet, corporate profits are skyrocketing. What gives?

Paving the way for trade
Secretary of State Ralph Munro says that the work not-for-profits have been doing for years in other countries is having a major impact on the state's ability to do business overseas. For example, not-for-profits including various charities, physicians and citizens have spearheaded humanitarian efforts and been volunteering for decades in Asian countries. Munro's office is creating a database to track these efforts so that when Governor Gary Locke or a delegation of state business leaders visits Chengdu, China, for example: "they can look in the database and discover that Snohomish High School has been carrying on exchanges with a high school there for 20 years. Or that University of Washington medical students have been doing volunteer work to immunize or operate on needy citizens. This gives us a leg up with human relations."

Increasing diversity
Nationally, demographers predict that 40 percent of volunteers and donors will be people of color by the year 2000. Yet, a majority of not-for-profits are staffed by whites. While the trend may not be as strong in Washington State, the question remains: What impact will increasing diversity have on not-for-profits? How can not-for-profits become more diverse so that they can better mirror the people they serve?

Health-care mergers
As for-profit hospitals gobble up their not-for-profit counterparts, who's watching out for charity care? The law requires that assets realized from a change in not-for-profit to for-profit affiliation be maintained for charitable uses. Who will hold these organizations accountable?

Impact of alternative funds
The Puget Sound area is home to the largest array of combined funding alliances west of the Mississippi. The best known, of course, is United Way, which has a lock on most non-governmental work-place giving programs. But more and more alternative funds (i.e., AIDS Coalition of Washington, Allied Arts, Women's Funding Alliance, etc.) are finessing their way into the game. They have worked hard to land a slot on employee pledge cards because payroll-deduction programs are one of the easiest and most cost-effective ways to raise funds. Yet, some businesses cite administrative burdens as a reason for not expanding donor options. Many are reluctant to further erode the turf occupied by United Way. What innovative actions can be taken to level the playing field?

Speaking of United Way
In recent years United Way of King County has moved from funding member agencies to funding human services according to the areas of greatest need. In King County, this is having a huge impact on long-time member agencies. For years, these agencies counted on United Way allocations for a significant portion of their operating budgets. What impact is this shift in focus having on these agencies and the people they serve? Also, what are the chances that major corporations will insist on an administrative merger of local United Ways? Would such a move reduce overhead and campaign costs, thereby freeing up additional funds for people in need?

Rising costs of fundraising
The costs of raising a philanthropic dollar — amounts spent on advertising, printing, postage, telemarketing, and competent development staff, for example — are reportedly rising. How willing are donors to support organizations that are spending a growing amount of their budgets on raising money? The costs of raising money and operating a not-for-profit effectively can vary widely and be complex. They need to be explored.

Politics — as usual?
During the 1996 elections it was discovered that some previously unknown not-for-profits were pouring hundreds of thousands of dollars into ads attacking candidates of both parties. Republicans channeled $4.3 million through Americans for Tax Reform. The Democrats funneled $3 million through Vote Now '96, a group that worked to boost voter turnout, especially among Democrats. Federal law imposes virtually no limits on not-for-profits that run issue ads. Ad buys need not be disclosed to opposing campaigns. And, the names of donors can remain secret. Who is monitoring these kinds of activities?

Commercialization
More not-for-profits are creating commercial enterprises simply to stay afloat. From charitable gambling to affinity charge cards, there is a whole range of activities these organizations are pursuing. The trend begs for a re-examination of how and why our society confers not-for-profit status.

Watchdog on nonprofits
When it comes to community sector coverage, the watchdog rarely barks. Local not-for-profit leaders said news media could perform a valuable public service by keeping not-for-profits accountable. "Being a conscience is one of the most important things media can do," said one community leader.

Social entrepreneurship
Some funders with business backgrounds are trying to bring more bottom line accountability to philanthropy. But approaches which work brilliantly to market and ship software don't always work in the arena of community economic development. The question of whether these "social entrepreneurs" and their venture capital philosophies intersect effectively with long-term social change agents and can generate compelling stories for many years to come.

Breaking through the communication barrier
There is little reason to suspect media malfeasance in these omissions. In fact, as with the community sector, the culture of media is in itself partly to blame. Add to that economic pressures, deregulation, competition for ratings, and it sometimes seems miraculous that media pay any attention to not-for-profit organizations at all. One thing is certain: media are more likely to give their attention to organizations who work to create effective strategies for communication. Some examples follow.