Understanding Financial and Human Resource Capacity Challenges among Small Nonprofits in Oregon: How to Overcome Challenges Unique to Size and Urban-Rural Divide

Abstract

Nonprofit and voluntary organizations are part of the political economy that add to the services of public and private sectors by addressing civic interests, participation in democracy and providing social programs that improve quality of life. This sector is mostly comprised of small organizations whose impact is more than their budget size. At the advent of this study, information existed about the needs and capacity challenges of Oregon nonprofits in general but lacked specifics on smaller organizations, especially differentiating the urban rural distinction. The aim of this research was to explore the financial and human resource capacity of small nonprofit and voluntary organizations in Oregon to fulfill their objectives and thus provide policymakers, nonprofit capacity building organizations and key leaders in the third sector in Oregon an assessment of what these organizations need to achieve their missions. The study through telephone interviews specifically sought to find a) what core capacities do small urban and rural nonprofits in Oregon currently possess in the financial and human capacity domains, and b) how should capacity builders and policy makers customize capacity building initiatives for small urban and rural nonprofits separately to help them achieve sufficient competencies. In general, the study found that there is a deficit between demand and supply of finances as well as human resources in small nonprofits in both urban and rural areas. The demand for services is always more than what can be supplied. Urban nonprofits struggle to provide the level and diversity of services required in areas where populations are not homogenous and have distinct issues at stake. While rural areas demand less, they have limited pools of volunteers and donors and hence the supply side gets constrained. Not only that, rural organizations struggle with finding representative voices in their boards and workforce even as the communities they serve become more diverse. Absence of diversity often translates to needs of the minority not being understood or catered to. An emergent research that cropped up in this study was that current definitions of urban and rural are based more on geography or demographics. While those are important and not to be dismissed, they are insufficient in understanding how "location" and "impact" of the nonprofit organization classifies them as either urban or rural. The methodology proposed in this study helps to overcome the limitation of overestimation of ruralness that arises using the traditional definitions. The small size of nonprofits posits