Are the days of holding your cup out over for modern charities? Mark Brewer, president and CEO of the Central Florida Foundation, says the nonprofit sector—or rather the “independent” sector—must shift into a role of developing innovative solutions to social problems. At an SB2 event in March where Brewer was keynote speaker, he laid out a future where donors put risk capital into foundations the way investors give funding to startups. He later sat down with SRQ to discuss how the change is coming, and whether organizations are ready or not.

Mark, you stress that foundations and charitable groups need to stop calling this sector the “nonprofit sector” and instead use the term “independent sector.” Why is this important? First of all, when people say nonprofits they are thinking of a 501c3. The sector is actually 501c1s through 501c25s, including some political action committees. It’s a misnomer. But what [the term nonprofit] does is it devalues the economic drive and power of a sector that makes up trillions of dollars. For most places in Florida it’s the second or third largest employer in the region, but we tend to think of it as a place where mostly volunteers are doing good work and we contribute to it when we can. The concept that we need a whole sector of organizations that themselves are not very strong going after some of the toughest problems in society is yesterday’s news. In the old days, we would go somewhere and say, “It’s just the two of us and we’re working as hard as we can to try and keep children from being hungry, and we’re going to go out of business by the end of the month unless you can give us a couple bucks.” Today investors are saying, “Why aren’t you two guys smart enough to solve this problem?” and “How can I make an investment to help make you successful?” They are investing not just in us but also our board of directors and the measurable things we have done. 

Are organizations shifting away from being in competition with one another? The business model of the sector has always been need. That leaves me or you trying to convince someone that our need is bigger or better or flashier than their need. What you’ve seen over the last 15 or 20 years is more of a concept that we have to make the work we do profitable. We can do that by generating revenues. We can do that by propositions and performance measures that are better than others. We could collaborate with a group of people that can do it better than any one of us. There are all kinds of strategies that are focused more on outcomes than how we get the money first to do things we know how to do.

In this area, many donors are retirees accustomed to the old model. How do you get them on board with this change? It’s what every business deals with. You have multiple customer pools and you have to use the right language with the right customer pool. I’m from Orlando, where 68 percent of the population is under 44. Your median age is 58. You are a more compact environment in which everyone is used to doing things the way they’ve always done it. If Florida gains another 25 million people, when they come to town that isn’t the way they’ve always done it. If you haven’t changed your business model over time, when older folks die off younger folks won’t be connected with nonprofits at all if they don’t understand what nonprofits do. The longer we sit around and say that’s not for us because we’re not sure how to do that—it’s not good. Take wealth out for a minute. Here is the key: people who are Baby Boomers and older were trained to gain wealth and give some percentage of it back. Gen X-ers and Millennials want to give as they grow. 

If these efforts are revenue generators, why are the tasks not the responsibility then of the private sector instead of the independent sector? The independent sector is more likely to do it. Private sector entities have problems with social measures. If you and I are traditional private sector folks and we get into any stress or problem, we’ll buck the social measures in a minute in order to make money. But this would be just as bad as the nonprofits that dump money to do good work but won’t survive long. Florida is one of the 17 states to have a new benefits corporation law. It isn’t a particularly powerful law yet, but we’ll use its structure because it requires us to put the measures we are going to live up to in the governing documents. On the other side, the government uses the independent sector like a vendor group. There is a bunch of stuff we don’t want to pay more taxes for, so the public sector contracts with independent sector entities. Sometimes donors don’t like nonprofits getting government money—except it isn’t government money, it’s contracts to provide services the government is actually responsible for. What everyone is looking for is a purer way to do this. There are no right answers and there isn’t a Holy Grail. It’s just the work of the independent sector to find our way through it, just as the private sector is finding new capital strategies to keep itself going and just like the public sector is figuring out how to do more with less tax money and get more efficient.

We’ve seen local leaders struggle with issues like homelessness, where no one can agree on a solution. How have you handled that in Central Florida? Twenty months ago, Central Florida was named, for like-sized metros in America, the number one place for homelessness. People were shocked. We have 164 agencies devoting time to helping people with homeless services and they do a brilliant job, but we’re still number one in homelessness. You guys are wrestling with governments not getting along. Our solution was to bring the private sector in. We put 200 c-suite CEOs in a conference room at the airport and provided them with data. We knew how many chronically homeless people we have across the region and how many family homeless people we have. We know its costs $31,000 a person to maintain all of those chronically homeless people on the street each year, and we know people on the street aren’t there for the reasons we think they are. The people with hearts said, “Oh my god, we are running a system and leaving people on the street?” And the other side said, “We are spending $31,000 a person a year and we’re not getting anything done?” Different motivations, but everybody came out of that meeting saying we have to fix this. We put together a metric on the community on how to house the 300 most vulnerable homeless people and then rebuild the infrastructure so that agencies would work toward Housing First and rapid rehousing, but also have some kind of strategy in the middle to get that done. The business community stepped forward with $12.5 million and said, we will put this into an impact fund at our foundation and that fund’s job is to make investments in the independent sector businesses that are doing it to get performance, then public sector dollars are going to move to fund that. We knew the public sector was spending $70 million a year on this; the problem isn’t that we don’t have enough money. The problem is we have a bunch of independent sector businesses operating on a mission with a set of investors that want them to do what they are doing and nobody is ever working together. It took us a year to get all the pieces together. We are seven months into it and we’ve housed the first 100 most vulnerable people and 85 percent of them have remained housed, which is better than the 17 percent housed under transitional housing. This is just the first phase in a five-phase process, but you have to have champions. You have to have elected officials that are champions. You have to have a businesses champion. You have to have somebody that will stand up and call for order, call for a metric, and then you have to have an independent sector that, if it’s going to follow funders, the funders have to be putting the money into a strategy that funds the metric to do what they’re going to do. 

SRQ MEDIA hosted Mark Brewer as the keynote speaker for the SB2: Regional Collaboration symposium on March 28 at The Francis on the topic of the Changing Landscape of Foundations. To engage with dynamic local and national speakers on key philanthropy, economic development, arts, education and architecture topics, visit us online at SRQSB2.COM for tickets and information about the 2016-17 season.

As the President and CEO of the Central Florida Foundation, Mark Brewer has earned respect for his ability to build community partnerships that meet issues head-on and produce measurable results. He has worked with hundreds of individuals, families and corporations to establish philanthropy plans, endowments, funding strategies and planned gifts. More than 100 regional nonprofit boards have enlisted Brewer’s assistance through the Foundation with strategic and scenario planning initiatives that included the use of endowed investments to sustain their organizations. He is a well-known national speaker on the independent sector, philanthropy’s role in America, venture philanthropy strategies and the role of the independent sector in public policy. In his leadership role at the Central Florida Foundation, Brewer frequently advises private and corporate foundation grant-makers across the region. Brewer began his career in the media as a reporter, anchor and journalist. His background includes more than a decade as a management consultant in the private and independent sectors, leading merger and acquisition strategies for cross-sector initiatives. Later, as a licensed investment professional, he assisted clients with estate and planned giving strategies. Brewer holds a bachelor’s degree in Business, a masters degree in Public Administration with a specialty in Nonprofit Management, is a Chartered Advisor in Philanthropy, and is a candidate for a Ph.D. in Public Administration with a specialty in Policy and Law from Walden University (expected 2016).