Smart Money: Investing in Infrastructure Organizations

JPMorgan Chase's Naomi Camper and NACEDA's Frank Woodruff examine how community development networks can provide the long-term infrastructure needed to improve places and access to opportunity.

November 18, 2016

JPMorgan Chase Recently, Washington, DC, Metrorail introduced plans to close portions of the DC-area’s rail and subway system for weeks at a time. At a minimum, this level of service disruption is a major inconvenience for hundreds of thousands of people. Many of the same people – including us – often take Metro service for granted. Need to get to work? Take Metro. Avoid traffic during a major DC event? Take Metro. Car in the shop? Take Metro. Save money on a taxi? Take Metro.

Many scramble on a weekly basis deciding what to do for transportation during the shutdowns.

Such is the nature of infrastructure. You often don’t miss it until it’s gone. But when infrastructure is working properly, it has the potential to promote equity, increase access to opportunity, improve efficiencies and foster innovation.

NACEDA’s work, together with its 45 state and regional association members, is really no different. The network of associations is a virtual backbone that makes life-changing community-based work possible. As a collective, the network spreads effective practices, provides technical assistance, performs policy analysis, raises capacity building resources, and – most importantly – connects.

Like transportation infrastructure, the impact of the network can be hard to understand and even harder to explain. Nowhere is this true more than when fundraising. Funders tend to favor simple output metrics: how many people will go to school, buy a home or get a job as a result of a grant?

But because the work these networks do is often intangible, it can’t easily be summed up with an output metric.

It’s no surprise, then, that infrastructure – whether transportation or network associations – can be hard to pay for. The combined budgets of NACEDA’s 45 members are a little over $21 million, coming from a combination of government grants and contracts, foundations, corporations, fees-for-service and membership dues. That certainly is not an insignificant amount. But funding from foundations for these types of infrastructure organizations – across the nonprofit field more generally – has not kept pace with increases in foundation giving, making up less than one percent of all foundation giving from 2004-2012 according to a recent Foundation Center report. Further, the report found the lion’s share of increases to infrastructure organizations actually went to philanthropic networks (79%), as opposed to other nonprofit infrastructure (9%) like those in the NACEDA network.

Into this environment stepped JPMorgan Chase, with unprecedented support for NACEDA’s efforts to strengthen the infrastructure of the community development sector. JPMorgan Chase’s corporate responsibility strategy is focused on advancing inclusive economic growth. While this often takes the form of grants to programs that drive economic opportunity, such as connecting jobseekers to employers, growing small businesses, or improving consumer financial health, JPMorgan Chase recognizes nonprofits must also have strong operational capacity to effectively serve their communities. To complement its programmatic grant portfolio, the company launched a capacity building initiative that provides grants, training and technical assistance to help nonprofits strengthen their core infrastructure.

Spitfire Communications
Sharpening strategic communications skills was the focus of a recent training for
community development associations from across the U.S.

That is why – in collaboration with NACEDA – JPMorgan Chase provided resources for 19 associations to participate in an intensive, customized two-day communications training by Spitfire Strategies in November in Atlanta, GA. The training built these network organizations’ capacity to communicate strategically, tell powerful stories, and mobilize resources. The training will be followed up with personalized technical assistance.

As the country’s largest financial institution, and as a significant funder of the nonprofit sector, JPMorgan Chase is sending a strong message to other funders that the outcomes of nonprofit organizations are only as strong as their operational capacity.

Infrastructure organizations – like NACEDA and its members – have their part to play as well. Community-based organizations thrive where there is a strong infrastructure of support but languish where such infrastructure is weak. That is NACEDA’s core conviction and purpose. NACEDA is a network of networks. Every action we take is because we believe it will ultimately strengthen and build the capacity of community-based organizations to more robustly serve disinvested people and places.

But infrastructure organizations need to be ready for investment, challenge calcified assumptions, demand accountability from those they represent, and insist that their first question to those in our networks NOT be “are you ready?” but rather “how can I help you BE ready?”

Because the consequences are real. We thought Tim Delaney from the National Council of Nonprofits said it best in a recent Nonprofit Quarterly article on a similar topic:

“I earnestly believe that the underfunding of the nonprofit portion of infrastructure upon which charities and foundations rely puts the entire community at jeopardy… like with other under-resourced infrastructure that fails from lack of meaningful support, the cost of fixing or replacing it will be much higher. And in the interim, the people and structures that the infrastructure is designed to help get hurt.”

Community-based organizations are often the last stop when a community, neighborhood, or family gets left behind by poverty, disinvestment, or prejudice. It is incumbent upon infrastructure organizations and funders to ensure these organizations are built for the long-term. Because if they are not, we have no one to blame but ourselves. And when the next generation is left without robust community-level services and development, they will come to us and ask, ‘why didn’t you do more?’ And what are we going to say?

Take Metro?

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