Philanthropy Industry Outlook Assembly

A Whirlwind of Change for Non-Profits and Donors

Roughly 90 minutes after two dozen non-profit executives, volunteers and donors gathered Dec. 6 at Mission Hills Country Club for the 2022 Philanthropy Industry Outlook assembly, the emerging reality was clear to all: their world, already changing before any of us had ever heard the word “COVID,” is unlikely going back to where it was before 2020. In deliberations steered by philanthropic titans Peggy and Terry Dunn and Mick and Marlys Haverty, the breadth of disruption facing that sector came into sharp focus: With demographics among donors, funders and employees; with changing funder preferences and processes; with pressures from wage inflation and the search for attracting and retaining talent; with ways that corporations are engaging their employees to promote philanthropy and the ways those companies themselves are practicing it. It was a powerful reinforcement of the factors that each confronts every day in the regional quest to remain one of America’s most philanthropic cities. And a reminder that, while much good has been done in this region, much work remains.

In a wide-ranging discussion that included perspectives from non-profit executives and board members, donors and volunteers, participants learned about current challenges confronting non-profits and explored deeper concerns about the way companies are engaging with civic and charitable causes, and the way they are engaging their employees. 

Part of what troubles the non-profit world today traces back to what started nearly three years ago—the global pandemic. For a sector long reliant on relationships grounded in face-to-face contact—meetings with donors, big-ticket events like black-tie galas—the impact of social distancing and event cancellations was immediate, and painful, and those organizations are still recovering from the hangover.

“There clearly is a bigger need, with all that’s going on,” said Mick Haverty, the retired Kansas City Southern CEO. He and his wife, Marlys, joined Terry and Peggy Dunn at the lead table for the deliberations. 

Chris Rosson, president and CEO of the United Way of Greater Kansas City, said after the disruption in fund-raising since 2020, “you see that coming back, right, but what you don’t necessarily see are the audiences coming back. But you do see the enthusiasm among folks across the community to see people in person.”

Janet Baker, whose KC Shepherd’s Center serves older adults, said in-person programming was suspended for two years, including the 70 Over Seventy signature event. “We had to go virtual for 2020 and 2021, which significantly decreased our fundraising potential.” This year, “we just returned to an in-person gala in September and were actually thrilled with the results. We sold out the event, 450 people, and we exceeded our fund-raising goals.”

Debby Ballard, who ch airs the UMKC Board of Trustees, assessed the return of students to campus: “On the whole, things are going well because they were ready to come back and have that on-campus experience.” But things are different, she says, because of the current economic environment as students try to manage higher living costs.

Terry Dunn introduced the engagement issue and what he called “disengagement, in some cases.” How are organizations encouraging engagement?

“I think it’s all based on folks finding impact; if you tell a good story and people see there is value in what you’re doing, I don’t think engagement is necessarily that difficult,” Ballard says. 

Gloria Jackson-Leathers of the Kauffman Foundation said that “we saw during the pandemic, some organizations actually increased their impact with on-line services; they were able to continue and show some impact. We’re continuing to do a lot of virtual support, as well, because many organizations are continuing to do what we call hybrid operations. You have to be able to look at these organizations differently than you did before. And their staffing is different than it was before.”

Staffing is a huge issue for non-profits, most around the table agreed.

As a funder, said Chris Rosson, United Way made a big shift to give organizations more flexibility to work with the unrestricted grants they receive. “We’re still going to hold them to the highest standards of accountability in terms of outputs and impact,” he said, but when it comes to how those funds are used, that discretion is important for non-profits.

Amy Allison, executive director at The Farmer’s House, said the organization serving people with developmental disabilities had engaged young people, even if they weren’t ready for board-level service, as volunteers and key assets with fund-raising. “This is the generation that grew up with kids with autism and Down syndrome in schools,” she said. “It’s more natural for them, and they are eventually going to be employers who create opportunities for the people we serve.”

Young professionals, she said, want to stay with an organization or cause, as evidenced by a survey of nearly 50 employees who, to her surprise, said that paid time off to support an organization was rated as highly as better wages. 

To Terry Dunn’s question about whether the corporate community was maintaining its engagement, Chris Rosson said many people who are inclined to support organizations are doing so, but outside the construct of their employment. Companies, he said, “may have a hard time determining what are the two or three causes people care about,” but in terms of sheer engagement, that continues to grow on an individual basis, particularly with the younger generation, he said.

Jeff Simon, office managing partner at Husch Blackwell, noted that when it comes to engagement, younger members of the law firm staff were more eager to be in the office. They want to be around the mentoring, the engagement, and get to know others they’re working with. “Our young people want to be engaged. If they want to be a part of something bigger than themselves and do more than just filling out a time sheet at the end of the day, we encourage that,” he said. “We will support you.”

If the only way to keep someone in the organization is by throwing money at them, you’re fighting a losing battle because someone down the street will be willing to pay them more, Simon said. The firm does provide funding for employees’ favored causes, with a caveat: the employee must be actively engaged with that cause.

Ballard, who retired after 35 years at Sprint leading the telecom’s philanthropic programming, said she was surprised to see that only 2-3 percent of employees there—even when it was the region’s largest employer—would take advantage of the company’s offer to provide financial support for their interests.

Bill Maloney, of the Catholic Foundation of Northeast Kansas, found that engagement can be bolstered through things like simple group discussions of people with shared interests. When the foundation conducted a gathering of CPAs to talk about Catholic philanthropy, “we had no idea if two people were going to show up, or 50, and we got 50,” he said. “What we found is that people in most professions were hungry to engage.”

At Basys Processing, CEO Brad Oddo said the credit-card processing firm had taken three steps to elevate employee engagement: Inviting non-profit leadership to visit the office for face-to-face discussion and events, providing $500 to each employee to steer toward favored causes, and coming up, he said, would be a paid day for employees to go work with the charity of their choice. “We’re looking forward to seeing how that third works out,” he said.

The last few years have been such a fluke, said Janet Baker, that it’s hard to see what broader trends might be emerging in philanthropy. Individual donations need to be increased, she said, at smaller organizations, where a higher proportion of revenue comes from grants, foundation revenue and donor-advised funds. 

Lisa Gioia, a CPA honored as a Local Hero this year, said a lot of her non-profit clients were receiving more corporate donations than in the past. “There aren’t a lot they’re receiving from in terms of numbers of corporations, but a lot more from individual corporations and foundations,” she said.

To Peggy Dunn’s question about the rate of governmental support, Dana Chatlin of The Farmer’s House pointed first to the Paycheck Protection Program of 2020, which “helped retain the quality staff we needed, so when everybody came back, we were intact.”

Terry Dunn, reflecting on the Great Recession of 15 years ago, asked about how the current economic challenge, particularly with inflation, was impacting operations.

Amy Allison said her operation had been compelled to raise its pay scale floor from $12 an hour starting out to $17. “It’s a huge differential,” she said, “and some of our staff who had been with us for years were resentful, because now people are coming in at the same rate is it took them four or five years” to attain. A direct-support professional, she said, now runs $20 an hour, a little more than some can make at McDonald’s. “We have to stay on par to get people to come and work in this profession.” Without that, she can’t staff operations, and care requirements don’t allow for cutbacks in staffing.

Chris Rosson said “you see the effects on employers with inflation, but in the general population in unexpected ways. We get a hundred calls a day right now from families that are facing eviction, and a lot of it tied to very basic changes in their cost profile. They have to feed the family tonight vs. paying the rent on Friday, and they are choosing to feed the family. Those are very real choices that thousands and thousands of families in the community are making every day.”

From the education perspective, said Debby Ballard, that’s exactly what students are experiencing: making the choice on whether to eat or pay for other basic needs. “The food pantry at UMKC has grown, and the need has grown even more where students literally don’t have enough food to eat,” she said. “When you think about how funding is different, I do think that corporations and individuals are changing their funding strategies to be more intentional than in the past, where they would support a sponsorship or luncheon or something. A lot want to see funds to support the pantry or students who don’t have gas to get to class.”

Scholarships help keep the students from making the choice to drop out, but they still have costs for rent, books and other expenses. Michael Weaver, whose Mission Vision Project helps steer underrepresented groups into health-care education and careers, said that “when you look at scholarships, there are a lot of things they don’t cover, like board prep, and we have kids that have to make a decision between taking extra courses to pass their exams vs., believe it or not, food insecurity. And some of them are working at the same time.”

André Davis, who serves on multiple boards mainly focused on children, said the pathway to greater engagement is understanding what employees want. “It requires leadership to be adaptive, to be agile, and you have to ask your staff, even your funders, ‘How are you doing? What are you willing to support? If I had an additional need, could you get behind that?’ Sometimes we run toward a funder, because we just want the money.”

The Talent Quest

Terry Dunn, noting that tens of thousands of jobs are going unfilled in this region alone, asked what various organizations are doing to secure talent while they compete with a private sector starved for qualified workers in its own right.

Kathryn Mahoney of Wayside Waifs said the animal-welfare organization had struggled to keep veterinarians on staff and was having additional challenges with adoptions being down and operating costs up. One strategy, she said, is to get into schools and spread the message about career potential, she said, “because they don’t necessarily know that shelters are an option for them.”

Kim Gronninger, with Topeka-based financial-services giant Security Benefit, said that “one thing we discovered during the pandemic is that a lot of younger workers especially really enjoyed working remotely, and they left for full-time remote positions.” A hybrid work schedule has helped mitigate that, she says, as have new initiatives to encourage volunteering and add to the company culture.

Gloria Jackson-Leathers noted that many employees simply have to work at home; it’s not a choice, because they can’t find child care—that sector was particularly hard-hit by resignations in the past three years. Gronninger noted that creation of a day-care at Security Benefit had made a big impact on keeping employees in the building.

Talent, though, isn’t always a paid function, and a talent pool is emerging that could help: the 10,000 Americans surpassing retirement age every day.

Amy Allison said several retired volunteers are engaging with The Farmer’s House, including a board member since the founding who wants deeper engagement upon retirement from the EY accounting firm. “We’re excited about the seniors that have availability and skill set and want to contribute,” she said. “We just happen to be sprawling across multiple locations and it can be difficult to plug them into the right spot. But they have amazing skills and time on their hands.”

Seniors are active and doing remarkable things, said Janet Baker. “They’re busy people, but if you want something done, you ask a busy person.”

Chris Rosson shared the story of a retired partner form Deloitte who works with United Way for free, essentially. She wants to use her skill set, her craft, not just laminate things,” he said. “We compensate her, but she doesn’t want that. She’s there to support the organization, she does reconciliation, she takes on unresolved issues. She is by far my favorite employee. There is a real opportunity for that type of engagement. They don’t have a limited skill set. We have to tap into that.”

André Davis brought up the emerging trend of a four-day work week, and its potential impact for all organizations, non-profit and for-profit companies. “Last January, we had 4.3 million people quit their jobs and not go anywhere else,” he said. “They were just revolting against work. They are rebelling against what work looks like for them. What we have to do is rethink how we are encouraging people to work in their best way. Is a 4-day work week it? We have to be open to the idea that it could be.”

Jeremiah Enna, founder and executive director of the Culture House, said “we are not only having to increase payroll offerings to new employees, but because of the dramatic shift in the economy, we’re having to upgrade current employees. Most people who work for us are working out of passion; their pay is not the same as it might be at the corporate level.” Senior volunteers, he said, have helped fill the gap, but “you have to figure out how to plug people in. You have to be prepared to benefit.”

Debbie Wilkerson, CEO of the Greater Kansas City Community Foundation, noted that some talent has to be hired out, as with professional services. “We don’t pay partners’ rates, but we pay livable rates,” she said. Nonetheless, one employee, who could have been earning more with her professional-services background, chose to pass it up to work at the foundation because of its mission. “I promise, I can afford this,” the woman told Wilkerson.

The South Plaza Neighborhood Association’s Kate Marshall said she’s on a pair of unstaffed boards, and discovering that people on those boards who are older “know how to behave on an unstaffed board. The younger folks who are coming in are just lost. They don’t realize who’s going to be doing the administrative stuff, they don’t do the hard stuff like pick up the phones and make the calls or book the rooms. When you look at the folks in their 60s who may be retired, they can give you the time you can’t get from others.”

Everyone today, especially young people said Peggy Dunn, is so busy now, but if they don’t commit time to service today, “those enriching experiences—someday, they may regret missing.”