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The “Invisible Sector” Relies on Trust
Not-for-profit organizations make up what has been called the “invisible sector.” Employees, boards, and other volunteers quietly go about their work, supporting the high quality of community life that many for granted. But that building of something together requires one critical component: trust.
By Anne L. Gingerich, MSW | Pennsylvania Association of Nonprofit Organizations (PANO)
Working for the common good, not-for-profit organizations make up what has been called the “invisible sector.” Employees, boards, and other volunteers shoulder the work of feeding the hungry, nursing the sick, tending an injured puppy, and caring for urban greenways. They quietly go about their work, supporting the high quality of community life that many of us take for granted—until the food bank reduces hours, the doctor’s office does not have the equipment needed for testing, or the park closes.
As I’ve watched the effects of Pennsylvania’s 2015-2016 state budget impasse, I’ve wondered how do-gooders could better develop community buy-in before external and internal challenges threaten it. I seek a deeper answer to this question than “We must tell our story better.” This mindset reduces the issue to a marketing and communications tactic, when we really need transformation to repair our infrastructure, overhaul our systems, and, most of all, mend our relationships.
“How can for-profit, not-for-profit, and government organizations band together to collectively ensure safe, healthy communities that encourage youth, adults, and seniors to reach for their fullest potential?” |
Building something together requires one critical component: trust. It is core to human relationships, and absolutely essential to getting work done. In a political climate where trust is almost nonexistent, how do we refurbish our systems to ensure high quality of life for those most vulnerable in our communities without annihilating each other in the process?
Without trust, we are less likely to attract the donors and volunteers we need to most effectively create community change. Without trust, for-profits, not-for-profits, and government entities might as well shut their doors.
A national survey conducted by the Nonprofit Finance Fund in 2015 revealed these facts about demand for not-for-profit services:
- 76 percent of not-for-profits reported an increase in demand for services.
- 52 percent reported their inability to meet that demand.
- 71 percent state that unmet client needs remain unmet when these not-for-profits cannot provide services.
And these results do not account for the effects of Pennsylvania’s nine-month budget impasse—a stalemate that pushed many not-for-profits into significant debt and added enormous stress to already overworked employees and volunteers.
Pennsylvania not-for profits proved their strength during this time. According to a 2016 PANO survey, many agencies were able to turn to their reserves to continue operations—meaning that they had reserves to turn to. The majority of organizations did not close their doors or reduce services despite of delays in payments from the Commonwealth.
But at what cost? One PANO survey participant noted, “Having to carry unpaid debt reduced our ability to provide additional charity care.” At least four not-for-profits reported losing long-term, excellent staff members due to concerns about job stability. This is a direct result of eroded trust.
Low trust levels cause not-for-profit staff to check and cross-check everything, which carries a hidden tax –slowing efficiency and increasing costs. In contrast, companies with high trust outperform companies with low trust by 300 percent. Trust is made up of integrity, motive, and intent; generating trust can be learned, practiced, and absorbed.
We cannot force others to be trustworthy, but we can be people and organizations in whom others can safely place their trust. When any company, whether it be Enron or a local fire company, misuses donated or taxpayer dollars (either willfully or through ignorance) the public’s trust diminishes. PANO’s Standards for Excellence Ethics & Accountability program says, “Public investment and confidence drive the success of not-for-profit organizations,” and recommends that “organizations embrace fundamental values such as honesty, integrity, fairness, respect, trust, compassion, responsibility, and transparency.”
We must hold ourselves to high standards. We must follow through on our word—especially when it hurts. And when we make mistakes, we must freely own them. These elements build trust between individuals, organizations, citizens, and elected officials.
The future of the not-for-profit sector depends on all players doing their part. Boards of directors must fulfill their legal, fiduciary, and strategic roles. Employees must meet community needs through mission-focused programming. Local government must create the societal infrastructure that supports those served by the “invisible sector.” For-profits must continue to partner with community-based organizations, mutually seeking high-quality community life.
As we all work for the common good, we must hold ourselves and each other accountable, and together we can find common ground.
To learn more about the not-for-profit sector, the market forces currently affecting their work, and how lack of trust can erode their overall impact, join the conversation with Anne Gingerich at PICPA’s Not-for-Profit Conference on June 6-7.
References:
Covey, S. (2009). How the Best Leaders Build Trust. Keynote presentation: Linkage’s 11th Annual Best of Organization Development Summit. Chicago, Ill.
Pennsylvania Association of Nonprofit Organizations (2015). Standards for Excellence: An Ethics and Accountability Code for the Nonprofit Sector. The Standards for Excellence Institute. Baltimore, Md.
Salamon, L. (2002). The State of America’s Nonprofit Sector. The Aspen Institute. Washington, D.C.
