Top Hispanic Nonprofits Understand The Business of Giving
You think you’re having a tough time in the current economic downturn? Try running a nonprofit.
Without question, the past 12 months have been challenging. Yet, even as the Hispanic Business Top 25 Nonprofits are hit hard by the economy, social entrepreneurs heading these organizations are finding new ways to cope. While some nonprofits, especially those still in search of a viable business model, are struggling and may ultimately fail during this economic slide, the more successful organizations, such as AltaMed Health Services, which once again ranks at the top of the list, are likely to grow stronger.
The Los Angeles-based health care provider, saw its revenues climb to $88.9 million in 2007, up from $77.3 million the prior year. Still, not all of this year’s nonprofits had prosperous years. For example, Chicanos Por La Causa, fell to fourth place, from second, following a 12 percent dip in revenues. This year also saw four drop off the Top 25, and four newcomers join the list. They include, AvANCe of San Antonio, Texas, ranked eighth; SeR-Jobs for Progress of Irving, Texas, ranked 12th; Latin American Youth Center of Washington, DC ranked 19th; and Asociacion Puertorriquenos en Marcha of Philadelphia, Pennsylvania ranked 20th.
Top-Notch Management
AltaMed has remained ahead of the competition and survived the economic downturn by building a top management team and board of directors. “We run a nonprofit with a mission, but we run an organization with the same sort of discipline and focus as any business,” says Castulo de la Rocha, AltaMed’s president and CEO.
The nonprofit provided services to the underserved population of Los Angeles since 1969. Today, it assists an estimated 50,000 people annually. Public funds made up roughly 20 percent of its $88.9 million in revenues last year, while 74 percent came from direct fees for services.
AltaMed recently felt the sting of the subprime mortgage crisis when it lost one of its generous underwriters – Bear Stearns, the beleaguered investment bank.
“You go through these things, and you learn to sidestep the big hits and figure out how to land on your feet,” says Mr. de la Rocha. “I do expect to survive this.”
The Battle for Foundation Dollars
Innovation, diversification, and especially the adoption of strong business models are the keys to success, according to most nonprofit leaders.
A case in point is the San Francisco- based Hispanic Scholarship Fund (HSF), which ranks seventh on our directory (see the profile on HSF on page 44). The fund has prospered by attracting hard-to- get foundation dollars. According to the Foundation Center, 1.2 percent of grants targeting special population groups went to Hispanic-focused nonprofits in 2006. Frank Alvarez, HSF’s president and CeO, says that Hispanic nonprofits must learn to “speak the language of business” in order to succeed. His organization has embraced technology, strong accounting procedures, regular audits and other stringent business practices. As a result, about 66 percent of HSF’s revenues came from foundation sources last year, compared to an average of about 8 percent for other top nonprofits.
A second nonprofit we review in this issue is the highly successful, Hispanics in Philanthropy, another San Francisco-based organization. HIP’s president says that nonprofits must learn to show foundations how they are delivering “value” to the community in a clear and demonstrable way. She also encourages smaller nonprofits to “think big” and collaborate in strategic partnerships with other nonprofits to show foundations a larger payback to the community.
Some Hispanic nonprofit leaders told us they have tried hard to raise money through foundations, but remain frustrated with very little success. Among the biggest obstacles is matching a donor’s core interest areas.
“You play almost a literacy game with foundations,” says Carmela Lacayo, president and CEO of the nonprofit Asociacion Nacional Pro Personas Mayores (The National Association of Hispanic elderly), which ranks 15th on this year’s directory. “You look at what they’re funding and adapt to those guidelines to get a grant. You can’t just go in there and say, ‘here’s a real, dire need.’”
AVANCE, based in San Antonio, Texas took a unique approach to getting foundations to pay attention. In 2007, it debuted the “Grantmakers Roundtable,” a two-day event that invited the nation’s leading donors to hear about its groundbreaking work in early childhood development. Foundation directors from the W. Kellogg Foundation and Annie e. Casey Foundation, among others, heard remarkable stories from AVANCE’S clients and some longtime donors.
“Our goal was to educate as many foundations that were willing to come and do it in a way where they didn’t hear it from me,” says Sylvia G. Garcia, president and CEO. “We told them, ‘We don’t want a penny from you, we just want to tell you why this work is important’.” The strategy paid off. The Kresge Foundation, a roundtable participant, recently donated $2.5 million. As a result of the event’s success, AVANCE is organizing a roundtable for corporate sponsors.