Vision Critical For Not-For-Profits



In recent weeks, questions have been raised about funding sources pursued by nonprofit organizations in our region. In particular, arts and cultural organizations, like Marie Selby Botanical Gardens, that have long been a source of pride for residents and attracted thousands of visitors.

For two decades, I have had the privilege of working with nonprofit organizations. In my experience, two critical interdependent issues face all charitable organizations, sustaining financial health and achieving mission impact over time. Nonprofits build their organizations for mission impact—the financial health supports and enables high impact programming. Mission impact is the greatest indicator of a nonprofit’s success—everything else is secondary to achieving an organization’s fundamental purpose. Financial health and mission impact comprise the organization’s business model. Keep in mind that not-for-profit is an IRS designated tax status not a business model. Nonprofits with the capacity to diversify their revenue sources particularly those sources recognized as more sustainable and reliable, such as earned revenue, tend to benefit from unrestricted financial surplus that can then better sustain their mission.

Unrestricted funds can be invested in strengthening operations and impact over time. Organizations that have adequate working capital to deliver high quality programs and services while continually investing in their infrastructure and capacity to deliver over time are certainly better positioned to thrive rather than just merely survive. As philanthropists, we want the causes we care about and the organizations we trust to address those issues to be more than mediocre; we want them to be exceptional and this takes resources.

The three most common types of nonprofit income are earned revenue; government grants and contracts; and charitable giving. The National Center for Charitable Statics reports nearly 48% of revenue generated by nonprofits comes from fee for service or earned revenue; 33% from government contracts and grants; and only 13% from private charitable giving. In 2018, U.S. private charitable giving was a record $427.71 billion, according to Giving USA.

Arts, Culture, and Humanities, as a category, received only 5% of the total giving pie. The top recipients of charitable dollars were religion (29%), education (14%), and human services (12%). Nonprofits have the behemoth challenge of raising their operating budget every year while being expected to demonstrate measurable, evidence-based results. The struggle for sustainability—working capital and demonstrable impact—is even more challenging today when the demands on our charitable organizations are at an all-time high. That’s why acquiring and maintaining an array of funding sources, earned and contributed, helps to limit the potential impacts of being overly reliant on any one-single source of revenue.

I applaud the visionary leadership of Selby Gardens’ board and staff for building a thriving, internationally recognized botanical garden. With a strong business model of 74% earned revenue, Selby Gardens’ financial viability and mission potential is limitless. Over the last few years, visitors to the gardens have increased by more than 50% providing exposure to Selby Gardens’ important mission to an even broader audience.

We need more tenacious champions for environmental conservation and sustainable practices. This living museum model uniquely captures the attention, hearts, and minds of all generations while promoting the critical imperative that we all must be better stewards of our natural environment. This critical transformation has laid the groundwork for Selby Gardens to pursue its ambitious Master Site Plan.

Let’s celebrate the achievements and potential of Selby Gardens and all of our nonprofits; they represent what we value as a community.

Christie Nolan.

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