The Northland Foundation’s Strengthening Communities Initiative:
A STRATEGIC APPROACH TO
Nonprofit
Capacity Building
Participating Nonprofit Organizations
Mission
The Northland Foundation
is a resource for people,
businesses, and communities
in Northeast Minnesota
working toward prosperity
through economic and social
justice.
Our purpose is to strengthen
families, grow a sustainable
regional economy, cultivate
leadership and philanthropy,
and foster respect for all.
Through our grants to nonprofit organizations, loans to
local businesses, and other
special programs, the
Northland Foundation is
building a strong foundation
for the future of the region.
Advocates for Family Peace
Aitkin County Habitat for Humanity
Arrowhead Economic Opportunity
Agency (AEOA)
Boys & Girls Club of the
Leech Lake Area
Boys & Girls Clubs of the Northland
Carlton County Children & Family
Collaborative
Champion Life Ministry, Inc.
CHOICE, unlimited
Churches United in Ministry (CHUM)
Circles of Support
Common Ground Construction
Community Action Duluth
Damiano Center
Duluth Area Family YMCA –
True North AmeriCorps
Duluth Local Initiatives Support
Corporation (Duluth LISC)
Grace House of Itasca County
Human Development Center (HDC)
Itasca County Habitat for Humanity
KOOTASCA Community Action
Lake Superior School District and
Two Harbors Chamber
Life House
Lincoln Park Children & Families
Collaborative
Little Treasures Center, Inc.
Lutheran Social Service –
Youth & Family Division
McGregor KIDS PLUS
Minnesota Assistance Council for
Veterans
Minnesota Citizens Federation-Northeast
Minnesota Diversified Industries (MDI)
Neighborhood Housing Services (NHS)
North Shore Horizons
Northeast Entrepreneur Fund, Inc.
Northern Communities Land Trust
Program of Promise
Range Women’s Advocates
Safe Haven
SOAR Career Solutions
Well Being Development
Strengthening Communities Initiative
n October 2009, the Northland
Foundation launched an ambitious
two-year program to help build
the capacity of 37 nonprofit
organizations engaged in economic
recovery efforts in northeastern Minnesota.
With the lion’s share of funding coming
from the U.S. Department of Health and Human
Services Administration for Children and Families,
as part of the American Recovery and Reinvestment
Act of 2009 – Strengthening Communities Fund –
Nonprofit Capacity Building Program, the
Strengthening Communities Initiative (SCI)
set out to increase the sustainability and
effectiveness of nonprofits providing services
such as asset-building assistance, financial
literacy, job training, and more.
I
Strategic Approach
SCI employed a three-pronged approach to
address five capacity-building areas:
leadership development, organizational development,
program development, collaboration and community
engagement, and evaluation of effectiveness. The
strategy included:
Customized technical assistance to
a select group of nonprofits addressing
economic recovery issues in their
communities. Through SCI, 37 nonprofits
received 1,263 hours of tailored technical
assistance.
Competitive grants, up to $20,000 each,
to further enhance the organizational
capacity and effectiveness of the nonprofits
receiving tailored technical assistance.
Financial awards totaling $531,754 were granted
to 35 organizations.
Capacity-building training workshops
open to all interested nonprofits in the
region, as well as targeted training offered to
the SCI participants. A total of 67 hours of
group training reached 461 people from 184
organizations.
Overcoming Challenges
During the program period, northeastern
Minnesota and the nation were in the midst
of the deepest economic recession since
the Great Depression. Nearly all the
participating nonprofits were faced with
serious funding cuts from philanthropic and
government sources and, at the same time,
contending with a sharp increase in the
demand for their services. As more and
more safety net programs have shifted from
government to the nonprofit sector, many
of these organizations struggled to meet the
staggering burden.
By 2010, much of the work of SCI had
shifted to crisis management, as executive
directors were challenged to restructure
programs as well as increase the efficiency of
administrative and management systems in
the face of funding cuts. The nonprofits that
participated in SCI expressed heartfelt
appreciation for the organizational and
moral support they received during this time.
Resources provided by the Initiative helped
these nonprofits to recalibrate and restructure
their programs and operations, not only to
survive through such difficult circumstances
but actually emerge stronger.
Kathy Keeley, the
Principal Consultant,
facilitated small and
large group training
sessions.
funding channels. Usually it is direct
services that receive funding; the
sustainability of the organizations
charged with providing those services
receives much less attention from
funders. In this era of rapid-fire
change and uncertainty, organizational
capacity building is vitally important
to ensure that communities can provide
for their citizens, especially those
individuals and families who are most
in need.
Impact Stories
Participant Q&A, as
well as panel discussions
and expert presenters
sparked learning and
lively conversation at
training sessions.
Ongoing Need
The Strengthening Communities
Initiative was created to help nonprofits
bolster their operations and address
areas of organizational need that are
not typically supported by traditional
Over the next several pages is a series
of articles featuring five of the
organizations that participated in
the Strengthening Communities
Initiative. Although these brief
summaries do not capture all of the
work these organizations accomplished
during the Initiative, they offer a
glimpse into the processes, challenges,
and achievements of their experiences.
ESSENTIAL ACTIVITIES
Program participants and the Principal Consultant, Kathy Keeley, found there were five activities that proved
especially powerful in building capacity.
Executive coaching. One-on-one work with executive directors to achieve a specific goal e.g. to strengthen the
management team, resolve conflict, or manage more proactively is profoundly impactful.
Board development around organizational change. Targeted training can help board members to
navigate change with positive governance, strategic thinking, and fundraising engagement, in support of the
executive director and the staff.
Scenario planning. Having plans in place that explore possible financial scenarios and their repercussions on
programs helps the staff and board to make timely, informed decisions.
Marketing audits. Reviewing their external communications and establishing a consistent brand can greatly
improve a nonprofit’s fundraising and outreach efforts.
Ongoing investment. Nonprofit organizations can operate much more efficiently if the upkeep of financial
systems, IT, and human resources policy is an ongoing priority.
Northern Communities Land Trust and Neighborhood Housing Services
n a community where the poverty
rate hovers at 22.3 percent – nearly
double the statewide rate – and
there is a shortage of safe,
affordable housing, the Northern
Communities Land Trust (NCLT) and
Neighborhood Housing Services (NHS)
organizations shared a similar mission
to promote homeownership and
neighborhood stability. The nonprofits
offered complementary services for lowand middle-income people; NCLT built
new and rehabilitated older homes, and
NHS provided counseling, loans, and
education for homeowners. NCLT was
challenged by fast growth along with the
hurdles and opportunities
created by the housing crisis. NHS was
a well-established organization seeking
to zero in on its core activities.
When both nonprofits began with
the Strengthening Communities
Initiative, they were already exploring
options for collaboration. Certainly, the
word “merger” can create anxiety in
staff, board members, and constituents.
Many concerns, from program
redundancies to systems compatibility
to staffing capacity, arise. With strong
potential for government funding cuts,
however, collaboration promised
efficiencies to enhance the work of both
organizations.
Through its SCI work plan,
NHS underwent an organizational
and financial assessment in preparation
for merger negotiations. The Consultant
also worked with the NHS board,
reviewed three years of financial data,
and provided the information to NCLT.
On the NCLT side, the Finance
Director and staff received guidance in
selecting a new accounting system to
support future growth. Their SCI grant
money helped them to purchase a more
robust system and convert the data over
to the new system.
Executive coaching was also
extremely helpful. Even with a dozen
years of successful leadership under
his belt, NCLT’s Executive Director
I
appreciated the support he received to
manage through the negotiation and
transition periods.
Previously both nonprofits primarily
served the city of Duluth. Now merged
into a single, new organization, One
Roof Community Housing, they
provide a multitude of homeownership
and affordable housing services. One
Roof also plans to expand into several
neighboring communities.
“The Strengthening Communities Initiative has
helped us become more efficient and productive
in terms of our financial management and
homeowner engagement. The more efficient we
are the more effective we can be at creating
affordable housing and helping folks stay in
their homes.”
–Jeff Corey, Executive Director
One Roof Community Housing
Richard Fryberger, former
NCLT Board President, and
Christina Trok, former
NHS Board President –
now President and Vice
President, respectively, of
the One Roof Community
Housing board – played
key roles during the
merger process.
Community Action Duluth
Through their enrollment
in the Financial
Opportunity Center,
Elizabeth, Walter, and
Valerie received referrals
for Minnesota Department
of Transportation job
openings and, ultimately,
were hired.
ommunity Action Duluth
(CAD) is a 45 year-old
nonprofit that mobilizes lowincome people and their
community to build assets
and reduce economic, racial, and
cultural barriers. Its programs help
people increase their income and assets,
secure jobs, and develop social capital.
Upon beginning work with the
Strengthening Communities Initiative,
one of CAD’s immediate goals was
to develop annual work plans to
implement their recently completed
strategic plan. The SCI Consultant
worked with program teams to develop
a template for annual action plans.
Each program team then drafted their
plans and submitted them to the
Executive Director for coordination and
approval. During this process, the
Director decided to streamline CAD’s
programs from 12 separate identities
into four core lines of business.
A major hurdle for CAD was their
communications materials, which were
inconsistent across their 12 programs.
The array of designs and messages
was confusing to funders as well as the
people CAD serves. The Consultant
helped staff to audit their materials,
C
think about their target audience, and
develop a recognizable brand. With an
SCI financial grant, CAD printed new,
easy-to-understand communications
materials that match the four core
business areas.
To further strengthen CAD’s
capacity, the Executive Director
received individual coaching. She had
been in the position for just two years
and was challenged by dramatic growth
in some programs and funding losses in
others. The Consultant was a sounding
board for the Director as she forged
ideas to restructure, develop a solid
management team, and support new
grants. By the spring of 2011, it was
obvious that major funding cuts were
imminent. CAD made the tough
decision to lay off some staff and
reorganize other positions in order to
protect the agency’s long-term
wellbeing.
One of Community Action
Duluth’s most promising outcomes is
their crucial role in forming a Financial
Opportunity Center, partnering with fellow
SCI participant SOAR Career
Solutions, along with Lake Superior
College and a financial institution.
Using Federal Social Innovation Fund
dollars awarded through the Duluth
Local Initiatives Support Corporation,
CAD had helped create an innovative
“one-stop shop” where low-income
people can improve their financial
literacy and access a whole variety of
supports to increase their financial
stability. It is a win-win for CAD,
partner organizations, and the entire
community.
“The workshops, one-to-one work with the
Consultant, and the funding SCI provided
combined to take our agency to the next level.
As a result, we have greatly increased our
outcomes in the areas of employment and
financial coaching.”
–Angie Miller, Executive Director
Community Action Duluth
Northeast Entrepreneur Fund
he Northeast Entrepreneur
Fund has long served as a
dependable source of small
business financing, consulting,
and training to
entrepreneurs in an eight-county region.
In its favor, the organization had a solid
record of program expansion, a new
business performance coaching
initiative, the addition of a Women’s
Business Center, and increased loan
fund capital.
The Strengthening Communities
financial award provided an opportunity
for the Northeast Entrepreneur Fund
(NEF) to complete several pressing
projects, including a
strategic plan, board
development training, a
succession plan for the
CEO, and information
technology upgrades.
In the midst of all this,
looming funding cuts
created new priorities
and decisions.
Strategic planning
was a top project on
NEF’s list. With
guidance from the
Consultant, the
board and staff developed
a new five-year plan with
measurable goals and annual action
plans for management. The
Consultant also facilitated the
management team to address internal
issues such as workflow, supervision,
and technology needs. An SCI grant
award helped to purchase new loan
fund and database software as well
as accounting software. Midway
through its SCI work plan, it
became apparent that as much as 50
percent of NEF’s federal funding was in
serious jeopardy. The CEO called a
special board meeting at which she and
board members refocused on the
mission and prioritized services
accordingly. Using this information,
the management team outlined lay-off
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scenarios. In the end, NEF cut 7 of
their 15 staff. Internal systems and
programs had to be recalibrated and
staff members responsibilities realigned
as a result. Throughout the process, the
Consultant provided a listening ear
and feedback.
One of NEF’s main takeaways
from their SCI experience was to
manage change not only in the short
term but also in relation to a longrange vision, to assure that the
organization can continue delivering
critical programs despite an uncertain
funding environment.
“We knew that in order to be part of the region’s
solution we needed to ensure the Entrepreneur
Fund’s survival, which meant downsizing. With the
help of our new strategic plan and new software, we
are positioned to remain strong in spite of a reduced
staff size. The coaching and support we received
were invaluable to accomplish all these major
transitions gracefully.”
–Mary Mathews, CEO
Northeast Entrepreneur Fund
SOAR Career Solutions
SOAR used part of their
SCI financial award to
re-tool its job readiness
curriculum and to
purchase teaching aids
such as an LCD projector.
OAR Career Solutions’
core mission is to provide
job readiness and training
to a diverse clientele,
ranging from laid-off
workers seeking new skills to ex-offenders
for whom getting and keeping a job
eases their reentry into society and
reduces their risk of reoffending.
SOAR’s employment readiness
programs help clients explore their
interests and refine their job-hunting
abilities, and hands-on training prepares
them to work in a variety of fields.
Success hinges on their self-confidence
and soft skills as well as learning a trade.
Coming into SCI, SOAR fit the
nonprofit life cycle model of rapid
growth with a need to catch up on
internal systems, management, and
organizational development. The SCI
Consultant worked with the Finance
Manager to review the very basic
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financial system SOAR was using and
recommended an upgrade to a more
sophisticated system. They also worked
together to develop a pricing format for
earned-income services. In addition, the
Finance Manager received guidance to
determine break even points and factor
in direct costs and indirect costs.
SOAR’s Executive Director also
received individual coaching with
guidance on resolving staffing issues
and management team-building skills.
Coaching gave the Executive Director
and the management staff greater
understanding of the organizational
life cycle, and its challenges and
opportunities. The full management
team received training to develop their
management skills, identify issues, and
accommodate work style differences.
The financial award that SOAR
received through SCI also enabled the
organization to do some very key work
with an outside consultant. The
nonprofit’s job readiness training
curriculum underwent a thorough
review and was successfully updated.
SOAR also was able to purchase new
teaching materials such as an LCD
projector. In addition, a second
consultant conducted team-building
activities that eased the transition
following a staff restructuring. Today,
SOAR is well positioned to continue its
stellar track record at helping the
underemployed seek, find, and keep
good jobs.
“The revisions to our career planning workshop,
Career Quest, were implemented in May, and
the feedback from participants has been incredibly
positive. The new curriculum is fresh and
current, and many changes were made based
on client and employer feedback. We are thrilled
with the impact it’s having and that SCI made
the revisions possible.”
–Amy Westbrook, Employment
Services Program Director, SOAR
Career Solutions
Well Being Development
he small town of Ely,
Minnesota, is an area of
renowned natural beauty. Its
lakes and forests lend themselves to a healthy lifestyle.
The remote location is less ideal for
people experiencing mental illness.
Local treatment services are scarce and
can be difficult to access elsewhere.
To address this service gap, a local
community college professor and two
retired psychiatrists joined forces. This
trio of compassionate citizens applied to
the Strengthening Communities
Initiative to boost their start-up efforts.
Early on, the SCI Consultant met
with the three founders
to discuss by-laws, board
recruitment, and board
roles and responsibilities.
As a board of
community members
was formed, the
Consultant provided
detailed board training
and helped them
identify an operating
structure, form a
steering committee,
and learn board
development tools.
Well Being utilizes
the clubhouse model, which is a
volunteer-heavy, comprehensive
program for people with persistent
mental illness. Unlike traditional day
treatment programs, clubhouse
participants are called “members”
rather than “patients” or “clients”,
and voluntary restorative activities
focus on their strengths and abilities
instead of their illness.
The volunteers established
expectations and policies for their
clubhouse steering committee and
delineated board and committee roles.
The Consultant coached the newly
elected board chair on accounting,
policies, personnel functions, and other
common start-up questions. The
Consultant also coached two volunteers
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on structuring their involvement in the
program, managing the board, and
integrating the volunteer, program, and
client experience.
Through Well Being’s participation
in SCI, the volunteer in charge of grant
writing received assistance to create a
fund development plan and prepare a
grant proposal. In 2011, Well Being was
awarded seven grants totaling $73,350
above and beyond their $5,000 SCI
grant. Well Being’s clubhouse is already
serving 16 members with educational,
social, and employment opportunities
and has formed a family support group.
This remote community is now a
healthier place to live – for everyone.
“A year ago we had only a vision and mission.
Today, thanks to SCI, we are a 501(c)(3) with two
hired staff, a program that serves adults with
mental illness, and funding through 2012. We also
have a strong board, a strategic plan, a website to
track member data and organize our volunteer
base, and more.”
–Meg Heiman, Board Chair
Well Being Development
Positive Outcomes
ccording to the
nonprofit participants,
their engagement in
SCI impacted how their
executive directors, staff
members, and board members think,
the ways they work together, their use
of information technology, and how
they plan for the future. Even though
they continue to operate in a highstress environment, these nonprofit
organizations are better prepared to
further their mission and serve the
region in the future.
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Evaluation Results
Evaluation statistics point to a strong
success rate for the Strengthening
Communities Initiative’s three-pronged
approach of tailored technical
assistance, group training, and financial
awards. 100 percent of the organizations
reported increased knowledge and
skills of staff members in the effective
management and operation of
organizations and programs;
100 percent of the participating
nonprofits reported implementation
of management or organizational
improvements, and 97 percent of
SCI participants reported enhanced
human, social, and employment
services to help low-income individuals
secure and retain employment, earn
higher wages, obtain better jobs,
and/or gain greater access to State
and Federal benefits.
Continued Support
Besides the $531,754 of financial
awards provided through SCI funds,
the Northland Foundation’s Grant
Program has awarded additional
dollars to further support participating
organizations’ core social, human, and
employment services programming.
Since the launch of SCI, Northland
has made another 61 grants totaling
$703,863 to 23 of the these nonprofits.
Today more than ever, people in the
isolated rural communities of northeastern Minnesota rely on the essential
programs and services provided by
nonprofits. The Northland Foundation
remains committed to strengthening the
capacity of the nonprofit sector to meet
the social, human, and economic needs
of the region.
CAPACITY BUILDING BY THE NUMBERS
Nearly all of the nonprofits worked in the area of leadership development and organizational development (over 90%).
In addition, program development was also an area where significant work occurred (80%), followed by community
engagement (nearly 70%) and evaluation of effectiveness (over 40%). Within these five areas, participating organizations
engaged in a wide range of capacity-building activities. The activities receiving the heaviest focus are listed below.
28 Received executive coaching
27 Installed IT infrastructure or obtained
program-related equipment
26 Received training for board of directors
23 Received staff management/leadership
training
20 Improved existing services
18 Produced marketing materials
18 Created strategic plans
12
10
10
9
9
Established a new strategic partnership
Created or updated a website
Restructured the organization
Developed succession plans
Collected information related to client
satisfaction and outcomes
8 Implemented systems to track client
satisfaction and outcomes
4 Filed a tax exempt application
Insights into Nonprofit Operational Success
he Northland Foundation’s Strengthening Communities Initiative
revealed some important insights into the practices that support
nonprofit effectiveness for the long term. Quality program delivery
that is sustainable over time depends upon nonprofit leaders and their
support networks – including funders – adapting quickly to new realities
and committing not only to programmatic needs but also to maintaining sound,
well-run organizations. Listed below are some of the key “success practices”
that were highlighted by the work of SCI.
T
Build and leverage
effective management teams
Executive directors often stretch themselves too thin.
Developing, and delegating to, a management team
creates needed bench strength.
Consider new business models
Staff and boards must be creative and even consider
adopting a new operating model, for example, moving
from staff-intensive to volunteer-based, in response to
major market forces such as funding changes or shifts in
service population.
Manage and restructure
proactively
In times of crisis, utilizing scenario and strategic
planning and refocusing on mission and core
competencies minimizes the fallout for nonprofit
leaders, their staff, and service populations.
Learn about
organizational life cycle
All organizations move through life cycle stages, from
start-up to mature. Identifying their current stage and
understanding the steps to transition through it enables
nonprofits to better navigate challenges.
Support nonprofit leadership
in stressful times
Nonprofit leaders work under great pressure
and uncertainty. Coaching and support for executive
directors is a key to preventing burnout.
Strengthen and change
management strategies
Nonprofits must cultivate the mindset and skills
to anticipate new realities, adapt to new technologies,
and manage staff reactions to change.
Understand the role of branding
A consistent brand and messaging that clearly
communicates the heart of the mission makes a
major difference to fundraising and outreach.
Increase human resources capacity
Building knowledge about performance appraisal, hiring
and lay-offs, staff supervision, etc. allows management
to focus more energy day-to-day on the mission.
Weigh the costs of a
project funding approach
Rarely does project-specific funding fully cover
implementation costs. In today’s environment, this
manner of operating is difficult to sustain.
STRENGTHEN
GROW
CULTIVATE
PROSPER
The Northland Foundation gratefully acknowledges
the support of our Strengthening Communities Initiative funding partners.
U.S. Department of Health and Human Services –
Administration for Children and Families as part of the
American Recovery and Reinvestment Act of 2009 –
Strengthening Communities Fund –
Nonprofit Capacity Building Program
Minnesota Community Foundation
Republican National Convention Host Committee Fund
Blue Cross and Blue Shield of Minnesota Foundation
610 Sellwood Building, 202 W. Superior Street • Duluth, Minnesota 55802
p. 218.723.4040 • 800.433.4045 • f. 218.723.4048 • www.northlandfdn.org