Urban Wire How the Social Sector’s Growing Support System Can Best Help It Thrive
Hannah Martin
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When people from social sector organizations travel to Washington, DC, to meet with federal policymakers and talk about the importance of their work, as representatives from the philanthropic sector are doing this week, the social sector has an opportunity to increase its influence with lawmakers and build relationships with one another.

Often overlooked, there is a support system for the social sector—also known as the social sector infrastructure–that helps the social sector increase its influence in society. Organizing events that enable the social sector to share stories of their community impact with policymakers and deepen connections across organizations is just one example of social sector infrastructure. It also helps organizations in the social sector form, operate, grow, and develop. At times invisible, this infrastructure is essential for the social sector to thrive.

To help raise awareness about the social sector infrastructure and celebrate its contributions, social sector infrastructure organizations are coming together this week to mark the inaugural Social Sector Infrastructure Week by sharing stories about what the infrastructure does and how it strengthens the social sector and benefits our society. Urban is participating by releasing three new research reports on the current state and future needs of the social sector infrastructure, hosting a virtual event, and publishing blog posts on the research findings.

Research Urban released last month with George Mason University found the social sector infrastructure is growing—especially the number of infrastructure providers and their size. Other studies came to the same conclusion, pointing to the growth of conferences, publications, networks, funder collaboratives, intermediaries like donor-advised funds, and fiscal sponsors.

Though our research participants expressed excitement about the national social sector infrastructure’s growth, they noted that it can create challenges. Top of mind for many participants were assessing the quality of services and balancing the social sector’s need for affordable services with infrastructure providers’ need for financial sustainability.

Participants explained that as the social sector infrastructure expands, it becomes harder to know which of its services are high quality. They also emphasized that even though the infrastructure is growing, it is still underresourced because convincing funders to support infrastructure remains challenging. With a greater number of providers vying for limited resources, feelings of competition, scarcity, and financial insecurity have accompanied the infrastructure’s growth.

We found two solutions can help providers address these concerns.

Establishing feedback mechanisms that allow providers to assess and improve the quality of their services

Quality social sector infrastructure services are critical for the social sector to thrive. When we asked people in the social sector what most influences their organizations to select a provider for infrastructure supports, many indicated they base their selection on the quality of providers’ services and reputation (75 and 69 percent).

Yet, through our interviews and focus groups, we heard concerns that the social sector lacks ways to discern the quality of social sector infrastructure services, both because there is a sector-wide norm against providing honest critique and because the infrastructure lacks feedback mechanisms between infrastructure providers and users. As a result, infrastructure providers cannot always assess and improve their service quality.

Participants suggested that social sector infrastructure providers either adapt existing assessment models to the infrastructure or initiate efforts to design new feedback systems. Existing assessment models that could be adapted include Yelp, a platform where users can rate and comment on services; Listen4Good, a survey offered by the Fund for Shared Insight that gathers feedback for nonprofits from their clients; and the Grantee Perception Report, a survey offered by the Center for Effective Philanthropy that gathers feedback for funders from their grantees.

Having the financial resources to offer affordable services while remaining financially secure

For the national social sector infrastructure to support the social sector, organizations must be able to afford its services, but we found many social sector organizations cannot. The biggest obstacle the social sector faces to accessing infrastructure services is cost; 78 percent of survey respondents indicated this is a barrier for them.

Right now, national social sector infrastructure providers are surviving, not thriving. They have operating margins close to 0 percent and months of spending on hand which are close to the recommended amount (three months). In interviews, many expressed feelings of financial insecurity.

Among national social sector infrastructure organizations, the experience of financial insecurity is more pronounced among those that primarily serve nonprofits (as opposed to those that primarily serve philanthropy) and among those with less than $5.4 million in annual expenses.

If providers aren’t financially secure, it becomes more difficult for them to offer affordable services, which, in turn, makes it harder for social sector organizations to access key infrastructure services.

There are steps infrastructure providers, funders, and social sector organizations can take to increase the financial security of infrastructure providers and the affordability of infrastructure services:

  • Infrastructure providers can focus on increasing their earned revenue and offering free or reduced-fee services, subsidized by earned revenue or grants, when possible.
  • Infrastructure funders can provide grants that cover the full costs of services and help subsidize the costs for social sector organizations unable to pay; offer multiyear, general operating support; and help providers establish other means of ongoing and steady support, such as from endowment income.
  • Social sector organizations with the means to do so can support the infrastructure providers they value by paying dues and fees for services.

Strengthening the social sector infrastructure

With feedback mechanisms in place to improve the quality of social sector infrastructure services and greater financial resources, the infrastructure will be better able to meet the needs of the social sector, and the social sector will be able to meet its full potential.

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Research Areas Nonprofits and philanthropy
Tags Charitable giving Foundations and philanthropy Nonprofit data and statistics Nonprofit sector trends Social sector infrastructure
Policy Centers Center on Nonprofits and Philanthropy
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