There are many arguments for funding nonprofit organizations, some moral and others practical. This post addresses the latter.

The majority of economists now believe that the US economy has returned to growth. However, the national unemployment rate stands near 10 percent and is not expected to reverse until well into 2010, if not 2011. In addition, foreclosure activity continues have a negative impact on the recovery.

As we look forward, now seems like a good time to explore what role of nonprofit service organizations have in the economic recovery, and how to best utilize these organizations to expedite the recovery.

Community Based Organizations (CBOs) are uniquely positioned to have a significant impact on the financial health of the nation. CBOs have a well-established track record of providing services to the most distressed members of the community, while containing costs. No business or government agency has the ability to deliver services as efficiently.  Any attempt at recovery that does not fully utilize this tremendously effective delivery system will be less effective and cost more.

What are the areas where nonprofits can be most influential in the recovery effort? Below is a list of areas where the prudent investment of resources could have the greatest impact.

• Job Placement and Retraining – Government agencies tend to take a one-size-fits-all approach to services and are less effective at creating lasting, meaningful change for program participants. They also tend to offer services in centralized locations that make it difficult for the most needy to access services.CBOs, on the other hand, have the ability to speak the language of their constituents, provide services in the community, and are more adept at supporting clients throughout the transition to new employment.

• Housing Placement and Retention – Businesses have a miserable track record of delivering effective foreclosure counseling to people at risk of loosing their homes. One need to look no further than the HOPE NOW program, created and implemented by the mortgage companies, that boasts help for over 2,200,000 families. While this number seems impressive on its face, the truth is much more sobering, for many this is a short term fix as the underlying issues that caused the initial problems paying the mortgage have not been addressed.In addition, government agencies have limited resources for delivering effective housing services to at-risk populations. These services are generally limited to referrals to nonprofit housing providers and/or publicly subsidized housing.CBOs have roots in the community and have the trust of their clients. This makes it easier for them to have honest conversations around difficult subjects. This allows CBOs to honesty assess borrower options, and determine the best long-term solution. They also have a better understanding of the unique characteristics of their community this helps to identify housing resources effectively.

• Emergency Services – Unfortunately this is the hard reality of any major economic downturn. As people work to secure housing and employment they all to often find themselves in a position where they need immediate assistance to make ends meet.For decades this has been the mainstay of nonprofit activity. Providing emergency food, shelter, and other essential services. In addition many human service nonprofits a great deal of time helping clients find, and apply for, the confusing and disparate programs that make up the social safety net.

Consumer spending comprises roughly 70% of the US economy, as long as a significant portion of the population are unemployed, at risk of loosing their home, and/or unable to cover basic needs no lasting recovery is possible.

Related posts:

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2. Nonprofits Pool Resources To Stay In Business
3. Hard Economic Times Are Fertile Ground For Cultivating Loyal Customers
4. Help provide support for people living with Breast Cancer & HIV
5. When Nonprofits Become Political (Part 3)

Posted in Best Practices