Nonprofits must consolidate to live

Effective July 1, the Stanislaus and San Joaquin county chapters of the American Red Cross are folding into the Sacramento-Sierra regional organization. The Modesto and Stockton offices will remain open, and no change in services of programs is expected.

The Red Cross will continue to provide emergency aid to families displaced by fires, to respond to local disasters and to offer first aid, CPR and other classes.

The difference, says Rebecca Ciszek, executive director of the Stanislaus chapter, is where back-shop functions will be performed. She has already witnessed a good example of the potential savings. Last year, the Stanislaus chapter spent $7,500 on its own audit. This year, its share of the regional audit was only $2,000.

The Red Cross isn't alone in making changes in order to weather the current economic crisis.

Two nonprofits that support Yosemite National Park also officially joined hands. The Yosemite Fund and the Yosemite Association recently became the Yosemite Conservancy, combining their respective fund-raising and education emphases.

And more nonprofits almost certainly will take similar steps to adapt to tough times.

In the last six months, Francine DiCiano, chief executive officer of the United Way of Stanislaus, says she's seen a growing momentum toward collaboration. "There's been lot of movement to operate more effectively. There's been a lot of breaking down of silos."

Nonprofits have always tended to operate on lean budgets. With only a few exceptions, they pay lower wages than the public sector and many businesses. Nonprofit executives are usually hands-on and multi-taskers.

Even so, national observers have predicted that many nonprofits won't survive the Great Recession. The problem is not their causes — which are nearly always good ones — but in the management of the organizations.

We saw that with the Modesto YMCA, which closed last year. Earlier this year, the Fresno Metropolitan Museum filed for bankruptcy; again, management problems were a root cause.

We've been troubled in recent years by the many individuals and groups who want to start their own nonprofits rather than working through or with existing organizations.

Starting a charity sounds like a noble idea; in practice it is very difficult, especially when times are tough and especially in light of the many regulations about payroll, benefits, tax filings and so forth.

For some years now, we've seen small nonprofits look outside, often to larger nonprofits, to handle payroll, benefits and other fiscal tasks. The goal is to keep the valuable programs available.

The Red Cross presence in Stanislaus County will not change, says Ciszek.

It will still have a Modesto office, a local board of directors providing oversight of local spending, a manager, staff and the ever-so-critical corps of volunteers.

Stanislaus County residents can designate their donations for use locally and be assured the money will stay here.

"We're just trying to work a smarter business model, to be more efficient with our precious revenue," says Ciszek.

She doesn't think the clients will notice, or care, about the organization's administrative structure, especially when Red Cross representatives show up at a house fire at 3 a.m.

Our community has benefitted tremendously from its various nonprofits.

We would hope that residents would prefer to give to those that strive to be efficient and to devote their limited resources to services rather than to administrative overhead.