That is the second article in a collection exploring San Antonio’s nonprofit sector. Learn the primary half right here.
There are roughly 2,600 nonprofits in Bexar County and 12 surrounding counties that deal with a variety of points — from artwork to schooling to homelessness.
With out the companies they supply, many San Antonians residing on the margins could be far worse off, however most nonprofits function on tight budgets amid rising group want and competitors among the many nonprofits themselves for funding.
Each private and non-private funders are routinely overwhelmed with requests — and the pie is shrinking even additional this yr as coronavirus pandemic reduction {dollars} dwindle.
Although a current report confirmed a rising nonprofit sector in 2023, netting $1.7 billion with $15.3 billion in revenues, not all of them are thriving.
Total, the bills of small nonprofits — these with revenues beneath $300,000 — exceed their income by about 35%. Forty-seven % of all nonprofits within the area fall on this class, that means a lot of the nonprofit sector is struggling.
In the meantime, massive nonprofits reported working at an total surplus of 13%.
“Smaller nonprofits are more and more burdened whereas bigger nonprofits proceed to thrive, highlighting the widening hole between these with entry to sources and people with much less entry,” based on the 2024 State of the Nonprofit Sector report, which was the results of a partnership between The Nonprofit Council, Better San Antonio Chamber of Commerce and Neighborhood Info Now (CI:Now).
The report offers an outline of the well being of the sector, which hasn’t been totally checked in the identical means since 2017, and helps nonprofits of all sizes establish traits in funding and challenges.
Of the well-established nonprofits which might be thriving, they sometimes share a key similarity: A number of dependable sources of funding.
“Variety of funding is vital for nonprofits,” mentioned Scott McAninch, CEO of The Nonprofit Council, itself an area nonprofit. “There’s at all times funding shifts with foundations, company [donors], folks and organizations that fund nonprofits.”
If a funder disappears from a nonprofit’s funds that yr, it must get changed with one other or companies or personnel might get lower, McAninch mentioned.
One other funding shift coming in 2025 is the tip of federal coronavirus reduction {dollars}, McAninch mentioned. Each Bexar County and the Metropolis of San Antonio have already allotted their American Rescue Plan Act (ARPA) funds, that are required to be spent by the tip of this yr, however the group’s want for social security internet companies has not subsided.
Whereas many organizations reported they’ll have the ability to transition away from emergency reduction to different funding streams, small nonprofits are working on such razor-thin margins that some might not survive.
A survey of native nonprofits within the report confirmed that “15% of [88] respondents mentioned they count on to face ‘critical shortfalls’” because of the cessation of emergency reduction funding, “which can seemingly impair their means to satisfy their mission — and even perhaps to proceed working in any respect.”
get metropolis funding
CI:Now and companions circulated the nameless survey to nonprofits within the South Texas area final yr to ask extra in-depth questions on their monetary outlooks, operations and challenges.
Whereas the survey was voluntary, not all questions had been answered by every respondent and solutions didn’t come from a scientifically consultant pattern, the report acknowledges, the info within the responses “gives priceless perception into key traits offering a place to begin for additional evaluation.”
Forty-five % of the roughly 130 nonprofits that responded to the Council’s query concerning funding sources reported a rise in authorities funding over the past three fiscal years. In the meantime, greater than 1 / 4 reported a lower in donations or presents and basis or company grants.
The Metropolis of San Antonio sometimes receives funding requests for twice as a lot cash than it has out there by means of its consolidated funding course of, which is about $40 million for a two-year cycle, mentioned Melody Woosley, director of the town’s Division of Human Providers.
ARPA funding roughly doubled that quantity for the 2024-2025 fiscal yr cycle, however “there gained’t be ARPA as a part of this course of” in 2026, Woosley mentioned. “So we’re anticipating that there’ll be far more requests for funding than funding out there.”
Through the years, the town has tried to simplify and streamline functions and compliance necessities, however “it’s not a simple course of typically, particularly for smaller nonprofits or newer nonprofits,” she mentioned. The minimal award quantity is $50,000, and the paperwork and compliance procedures each earlier than and after the award could be cumbersome.
“Any contracting with the town could be tough as a result of there are extra hurdles” when coping with public companies which might be finally accountable to the general public, she added.
Nonetheless, she mentioned, the town gives coaching for its request for proposal processes and is continually amassing suggestions from candidates on enhance.
Whereas DHS makes suggestions primarily based on inner and public enter, Metropolis Council finally decides who will get the cash. At the moment, the town’s nonprofit grant funding is split into 4 fundamental topic classes: Youngsters and youth success, senior independence, household strengthening and ending homelessness.
“If council needed to vary these 4 classes, in fact they may,” Woosley mentioned.
Philanthropy is unpredictable
Along with politics, nonprofits could be affected by altering priorities of company or basis donors. These can change from yr to yr, relying on the philanthropic objectives of the person funder in addition to the place they’ve already invested, defined Barbara Gentry, a former president of the USAA Basis and the USAA Academic Basis.
When setting the philanthropic agenda for the foundations, “we appeared on the areas that made probably the most sense to us to assist,” mentioned Barbara Gentry, a former president of the foundations. “So it was schooling, it was medical analysis, well being and human companies [and] a really small quantity to the humanities, as a result of we simply felt like as a member-owned group, that wasn’t the place our huge {dollars} wanted to go.”
In 2016, the insurance coverage and banking big that serves energetic and retired army members and their households narrowed its concentrate on army household resiliency, however nonetheless maintains some funding for native, community-wide points.
Gentry now chairs the board for Haven for Hope, the town’s largest homeless shelter and sources hub. Haven additionally might even see a lower in funding within the thousands and thousands within the coming years because of the possession change of NuStar Vitality LP, which helped set up Haven in 2010.
The nonprofit’s management is assured that the loss could be changed by broadening its donor base and leveraging state and federal funds to shut the hole, Gentry mentioned.
The identical shifts can also occur in main particular person donors, she mentioned.
“Benefactors die,” she mentioned, and their households might produce other concepts for spend their cash. “We must always by no means rely so closely on anyone or two or three donors. Now we have to know: Every single day we have now to construct our donor base.”
With extra nonprofits coming into {the marketplace} — 109 new ones have cropped up since 2016, per the report — competitors for these donors solely will increase and the cash is unfold skinny, Gentry mentioned.
This was a typical theme that emerged in interviews over a number of weeks with nonprofit leaders: An underlying sense that there could also be too many nonprofits in South Texas to enact the sort of significant change they got down to accomplish on points like homelessness and meals insecurity.
“There are … nonprofits that might consolidate” within the curiosity of getting an even bigger impression, Gentry — and others — advised.
“Some nonprofit leaders don’t like that concept, however you already know, we’re duplicating [administrative costs],” she mentioned. “And when there’s not sufficient {dollars} to go round, that doesn’t appear to me like a sensible factor to do.”
The third story on this collection, publishing Jan. 16, will discover nonprofit consolidation. Keep tuned for half three of the collection.
