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Nonprofit enterprise – Funders urged to back training

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By Todd Cohen

Inner-city regions of Guilford and Forsyth counties with some of the toughest social challenges lack nonprofit groups prepared to address those challenges, a new study says.

The study, by professors at the University of North Carolina at Chapel Hill and UNC-Greensboro, calls for the creation of more nonprofits and recommends that foundations in the Triad support entrepreneurial training for local nonprofits.

“The Piedmont Triad’s ability to train its most valuable human capital assets and to compete in the 21st century knowledge-based economy will hinge on its investment in a civic entrepreneurship training program,” says the study

“This type of training is not an option for local third-sector organizations,” the study says. “It is a necessity.”

Leaders of the two counties’ community foundations, however, voice concerns about the study.

Scott Wierman, president of the Winston-Salem Foundation, says he worries about the proliferation of nonprofits and suggests that existing nonprofits should think about teaming up with one another and improving existing services.

“I think the reality is, the pendulum is swinging back to the point where we may see some consolidation of nonprofits, or mergers, and the focus of a single nonprofit may actually have to become larger,” he says.

H. Walker Sanders, president of the Community Foundation of Greater Greensboro, says the critical issue is not the location of nonprofits but assessing the community’s strengths and building on them.

The study, “Social Capital, Nonprofit Organizations, and Regional Potential in the Piedmont Triad,” was directed by James H. Johnson Jr., a management professor at the Kenan-Flagler Business School at UNC-CH, and John Rees, a geography professor at UNC-G.

The study identified 540 nonprofit groups in the Triad and classified them according to their area of focus: education and literacy training; family and child development; drug and crime prevention; housing-related services; and entrepreneurship, economic and community development.

In Guilford County, the study says, most nonprofits are not located near areas facing the greatest social problems: poverty, joblessness, single-parent families, welfare assistance and teenage school dropouts.

In fact, the study says, only two nonprofits are located in the most severely distressed census tract in Guilford County, and they reported no assets in 1998.

Forsyth County had more nonprofits than did Guilford County in areas with the greatest needs, the study says, although it says the county’s most economically distressed community had only one nonprofit and it had assets of only $59,000 in 1998.

In both counties, many neighborhoods with large numbers of high-school dropouts had few nonprofits in general and even fewer addressing the needs of those dropouts, the study says.

More nonprofits specializing in education and literacy training are needed throughout the entire region to improve high-school graduation rates, the study says, especially in suburban and rural areas.

Noting that the Triad is home to nearly one-third of the state’s foundation assets, the study calls on local foundations to help teach nonprofits how to be more entrepreneurial and business-like and to broaden their missions to generate more income.

The study also recommends that foundations establish a social venture capital fund or funds to invest in new nonprofits that would take a more entrepreneurial approach to fighting poverty, creating jobs and pursuing community development initiatives.

In its recent report, the state’s Rural Prosperity Task Force also recommended creation of a civic venture fund to address some of the most difficult social problems faced by rural areas.

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