PART Three

PROVIDENCE – Data can tell a vital story about Rhode Island’s future prosperity when it comes to recognizing the critical role that the nonprofit community sector plays in keeping the state’s economy functioning.

Yet, according to Nancy Wolanski, the director of the Nonprofit Resource Center headquartered at United Way of Rhode Island, nonprofits are all too often treated as “disposable vendors” by the state.

The state essentially contracts out for most of its direct services to nonprofits, Wolanski explained – such as day-care services, adult assisted living services, and community health care workers – what enables many workers to stay on the job in the workforce.

But, instead of making long-term investments in the human infrastructure supporting nonprofit community agencies, Wolanski continued, the state has instead adopted a retrogressive policy that says: “If you can’t do the job for this amount, then we will find someone else to do it” – at a cheaper price.

Similar to the current affordable housing conundrum – where there are no longer any affordable properties to buy or to rent in almost all of Rhode Island’s cities and towns, as detailed in PART One of “It’s all about the data, the data, the data…” – the dire lack of investment in housing development is mirrored by the failure by the state to make strategic investments that support the human infrastructure of the nonprofit sector.

By the numbers, the most recent data collected in the “data highlight sheet” from the 2022 RI Nonprofit Resource Center Survey paints a severely disrupted landscape:

•           82 percent of nonprofits have staff experiencing burnout and emotional exhaustion;
•            46 percent of nonprofits have lost staff who have departed the sector entirely;
•           40 percent of nonprofits have three months or less of cash reserves; 
•            23 percent of nonprofits pay wages to entry level workers that are less than $15 /hour;
•            while 6 out of 10 nonprofits are still seeing a higher demand for services than what existed pre-pandemic.

The 2023 RI Nonprofit Survey is being conducted right now, according to Wolanski, and the data from the survey will be released next month on Giving Tuesday on Nov. 28.

Wolanski is attempting to change the data equation, with the strong support from Cortney Nicolato, the president and CEO of United Way of Rhode Island.

“There is this huge gap in data around the work of the nonprofit community in Rhode Island, but specifically [missing data] around the economic benefits of nonprofits,” Nicolato told ConverenceRI, who was a participant in an in-depth interview on Monday, Oct. 16, at United Way of Rhode Island offices on Valley Street.

“During COVID, we did nothing but prove the value of our work and our impact on economic well being,” Nicolato continued.

But the problem, Nicolato explained, is that the data from the federal Bureau of Labor Statistics has not been fully integrated into providing a better explanation of how the nonprofit sector has been underutilized when it comes to understanding the economic benefits of the nonprofit sector in Rhode Island.

“We are dedicated to figuring out how we can better tell the story of the nonprofit sector in Rhode Island, and the fact that we are 70,000 employees here in the state of Rhode Island,” Nicolato said.

Wolanski and her team at the Center are seeking to rectify the problems around the missing data, working with both the federal government and with CommerceRI.

Here is PART Three of “It’s all about the data, the data, the data…” featuring an in-depth interview with Nancy Wolanski, director of the Nonprofit Resource Center, who was joined in the conversation with ConvergenceRI by Cortney Nicolato, president and CEO of United Way of Rhode Island, and Jully Myrthil, a United Way intern who is a high school senior.

As the opening question from ConvergenceRI made clear, the challenge facing Wolanski is daunting.

ConvergenceRI: Imagine this is the opening of a new Mission Impossible segment. Should you choose to accept this assignment, the tape will self-destruct in 30 seconds. Is this a mission impossible, or is it a mission probable? Do you see yourself tilting at windmills? Or are you confident that you are going to be able to cause a sea change in the way that Rhode Island supports and invests in its nonprofits?
WOLANSKI: [after a peal of laughter] I don’t see it as impossible, but I do see that there are a lot of challenges that we face. I think that for the ecosystem in which nonprofits work, we need a lot of improvement.

As I think about the Center, we have three distinct areas of focus: supporting staff who work in the nonprofits sector; working to strengthen the nonprofit organizations that are working in our communities, and building the community ecosystem.

ConvergenceRI: How would you define the ecosystem?
WOLANSKI: I would say that it is the nonprofits themselves. But it also is the other entities with which they need to work in order to achieve their mission: state government, federal government, municipalities, donors, funders, and the community residents themselves.

And, I think that we have seen how nonprofits are relied upon; they are the anchors of the community. But they are not invested in, nor are they [fully] resourced to do the work that they are tasked to do.

For a long time, they have been pushing themselves to continue to make the difference that they want to make while being resource-constrained. And, they are not necessarily well understood by those who rely on them. Policymakers depend on the fact that they assume that nonprofits will always be there, whenever they are needed.

But there isn’t an understanding – or an appreciation for the fact – that there needs to be an investment in their capacity beyond just programmatic funding.

The state may say to a nonprofit: “We need you to provide support in getting vaccines out to the community….” or, “We need you to be there when a disaster happens.” And so, the nonprofit steps up, and the nonprofit performs heroic work, and then, they are kind of forgotten about until the next time that an urgent call comes in.

ConvergenceRI: I was struck by the comments made by the Nobel Prize winner in Economics, Claudia Goldin from Harvard. She made an insightful observation when she was interviewed by Shirley Leung, a columnist from the Boston Globe. Goldin said: “Economics is about people. It’s about inequality. It’s about the female labor force. It’s about health. It’s about economic development.” To me, Goldin seemed to be describing the work that the nonprofit sector is performing.
WOLANSKI: Un huh.

ConvergenceRI: And, all too often, their voices tend not to be heard. Is that an accurate statement?

WOLANSKI: Yes. I think that there is definitely a sense of not being at the table when decisions are being made that affect their communities. There is also a sense that they are also often treated as disposable vendors…

ConvergenceRI: What do you mean by “disposable vendors?”
WOLANSKI: If you can’t do the job for this amount, then we will find someone else to do it. The state essentially contracts out most of its direct services to nonprofits.The state isn’t providing food assistance or shelter directly; it is contracting those services out to nonprofits, who are doing the work.

And, instead of recognizing that there is a limited number of organizations with the expertise and capacity to do this work, and then investing in them to ensure that they are going to be available to do this in a sustainable way, the ways that the state looks at nonprofits are: “We’re just doing a vendor RFP.”

And then you’ll come in and do the program for us, instead of recognizing that it is actually an integral part of the state services infrastructure. The nonprofit sector serves as the state’s services infrastructure.

And so, just as the state needs to make decisions and investments in the economic wellbeing of the state – to invest in infrastructure at Quonset, because that’s [deemed] really essential to how the state can function, that kind of investment is not being made in the capacity and infrastructure for nonprofits.

When you look at the thoughtfulness that has gone into – and the time and money invested into things like, “We want to grow the Blue Economy,” so we are going to create a whole environment that is conducive and supportive and has the resources necessary to make sure that this part of the economy can grow and flourish, that kind of thought process isn’t being put into something that is just as crucial to the economy – which is the nonprofit sector.

But when you look at what the nonprofit sector does, in terms of ensuring that the economy can function by providing nonprofit childcare sites, by providing care for seniors, so that people can actually go into the workforce, because their kids and their parents are being care for.

When you look at who provides workforce development, that’s the nonprofits When you look at after-school programs, so that, again, mom and dad can stay in the workforce, that’s nonprofits. And so, if you take those things away, you are losing your workforce. And you are not going to be able to have the employees that you need for your small business.

Often times, when you look at investing in our economy, we don’t look at investing in nonprofits as an economic engine. Some 16.5 percent of the state’s workforce works for nonproifts.

To ignore almost a fifth of the state’s workforce is really short-sighted. And, when you look at things like the amount of goods and services that are purchased by nonprofits, when you look at the economic development that is spurred by things like arts and culture, when you look at how much money is brought into the downtown Providence by “Hamilton” coming to PPAC, to take those things away, it not only decreases our quality of life, it decreases the ability of the sate to attract employees to come and live here, and, it also makes government not able to function, because we are taking away the organizations that provide the services on behalf of the state.

We tend to look at these pictures of how the state works and flourishes as being independent of the nonprofit sector. And somehow, the nonprofit sector is seen as an “extra.” Or, it is a break-glass-in-case-of-emergency.

ConvergenceRI: How do we change those perceptions? If I were doing my communications work, I would ask: If you could have a billboard on Route 95, and place it next to “In Pain, call Wayne!” what would it say?
WOLANSKI: [a peal of laughter]

ConvergenceRI: Imagine it being placed right next to the Blue Bug, and if you could create a message to change the conversation, what would it say? What would be the image you would choose to make people pay attention?
WOLANSKI: I’m not sure I can come up with an advertising campaign off the top of my head.  I do think that some of it is about becoming much more visible. Nonprofits are often so busy doing the work that they can’t poke their head up to tell the story. That’s one of the things we want to do with the Nonprofit Resource Center – to increase the visibility of the sector – as well as just educating people about all the ways that nonprofits touch their lives.

A second aim is to educate people about how nonprofits function – that they aren’t primarily supported by government. In terms of policymakers, we are planning to partner with the Masters of Public Administration program at Brown University to develop analyses of the economic impacts of the nonprofit sector, because right now, one of the things that we struggle with is that there is not much data.

ConvergenceRI: Really? What kinds of data do you want?
WOLANSKI: Well, data from the Bureau of Labor Statistics, on the federal level, which provides the quarterly census data on employment and wages, so that businesses can understand the employment trends and the wage trends. They only do that for nonprofits every five years.

ConvergenceRI: So, in the last five years, going back to 2018, nothing has changed much?

WOLANSKI: Yes, nothing has changed in the world since 2017. [another peal of laughter] So we are still working on estimates from 2017 for the nonprofit sector.

I had the R.I. Department of Labor and Training run some Rhode Island-specific numbers, mostly high-level, for 2021. We found that the rebound in employment for for-profit entities was quicker than for nonprofits.

The nonprofit sector did receive an influx of resources that were pandemic specific, which kept a lot of nonprofits going. The demand level for services has not gone down significantly from the pandemic, but the pandemic specific resources have dried up.

What we’re seeing, based on the survey that we did last year, we found that 60 percent [of the community nonprofits] still had needs above pre-pandemic levels.

So, the community was asking still more than they were asking before the pandemic. But the pandemic-specific aid is no longer there. You have this higher level of need without the increased investment. As a result, the nonprofits have really been struggling with burnout.

ConvergenceRI: Who are you talking with at CommerceRI?  Did you meet with Liz Tanner?

WOLANSKI: She has met with Cortney [Nicolato] repeatedly about some of these things. I have been meeting with Daniela Fairchild [chief strategy officer], as part of their long-term strategic plan.

We’ve been talking about how nonprofits need to be incorporated into CommerceRI’s long-term plan, and there are people at CommerceRI like Daniela who definitely recognize that the small business label also means nonprofit. But most people, when they look at small business, they do not think nonprofit.

The question is: how do we ensure parity for investments that are made into our economic development through nonprofits and for-profits.

That’s one of the things that we are looking at.  For instance, when you look at the PPP application process, it was completely designed for small businesses, and so going through that process for nonprofits was really difficult. Small businesses were able to navigate it, but the applications weren’t designed for nonprofits. The questions that were asked were not questions that applied to nonprofits. Basic things like that. Some of the assistance programs were opened up to nonprofits at the end of the assistance programs, instead of at the beginning of the assistance programs.

One of the things that we have been looking at, one of the issues that smaller nonprofits struggle with is when looking at state contracts and grants or federal grants and contracts, is that they are done on a reimbursement basis.

And so, if you do not have significant cash reserves, you can’t front the government six or nine months of program expenses before you get paid.

So, what we have been looking at is whether there is a potential for a revolving loan fund, or something that we could provide the capital [up front], because we know the money is going to be coming.