A new study offers insights to galvanize community-based organizations (CBOs) like Episcopal Community Services.

In big cities and small towns throughout the country, one in five Americans receives support from CBOs—helping them fully contribute to society and thrive in their communities. Despite the undeniable need for the human services that benefit individuals and families, many CBOs face or are at-risk of instability and financial distress.

The impact and contributions of CBOs go far beyond societal remedies for people. An ecosystem of their own, the 218,000-some CBOs nationwide employ more than 3 million people and generate more than $200 billion of economic activity through wages and services nationally. And yet, one in eight of these organizations is insolvent according to A National Imperative: Joining Forces to Strengthen Human Services in America, a new report released by the Alliance for Strong Families and Communities and the American Public Human Services Association (APHSA).

Click here to read the full report.

Additionally, more than sixty percent of CBOs rely on government and other non-philanthropic sources for more than 80% of their revenues; nearly half have had a negative operating margin for over a three-year period of time; and three in 10 have reserves that would only cover less than one month of expense.

So what can organizations do to preserve and strengthen their capacity? And what can government agencies, the philanthropic sector, and other entities do to help maintain a healthy human services ecosystem?

A National Imperative provides five cross-sector North Star initiatives to unleash the full potential of CBOs:

• Commitment to Outcomes: CBOs should invest in the collection of common outcomes, and funding should firstly be targeted toward effectiveness versus outputs
• Capacity for Innovation: With support from funders, organizations should share knowledge and learn from one another’s mistakes to create informed, new, and improved approaches to service
• Strategic Partnerships: CBOs should collaborate and consider combining powers to activate maximum results
• New Financial Strategies: Financial governances should develop stronger risk management capabilities, consider hypothetical scenarios, and plan for long-term security
• Regulatory Modernization: Regulators of all levels, with influence from CBO leaders, should review and renew outdated regulation

Click here to read the full report and its North Stars.

ECS is considering how these North Stars align with and can improve our current strategic direction. As members of the Alliance, we’re interested in continuing this conversation. Email info@ecsphilly.org if you’d like to learn more.

A National Imperative, written by Oliver Wyman Group and SeaChange Capital Partners (two of the firms behind The Financial Health of Philadelphia-Area Nonprofits), conducted research for over nine months by analyzing more than 200,000 990 tax forms; surveying and interviewing leaders from CBOs, public sector agencies; foundations and philanthropic groups; and with a national advisory council.