Challenge and Opportunity for Michigan Nonprofits Part 1 of 5

The opportunity seems right; the necessary factors, the pushes and shoves seem to have aligned themselves pretty well. There is a possibility that nonprofits in Michigan, and particularly in southeast Michigan, could find themselves in a situation where collaboration and cooperation on an unprecedented scale is not only advisable but necessary. To me that would be a welcome opportunity for nonprofits to do something that would be historically extraordinary and politically necessary.

First, I believe that cooperation and collaboration, even that dreaded word “merger,” between nonprofits, both within mission categories and across those borders, may well be forced upon us by economic circumstances, and that could lead to a more efficient and effective voluntary sector.

Second, the nonprofits of our state and southeast Michigan region have an extraordinary opportunity to provide leadership to the revitalization of our region by collaborating to bring their “best practices” and the voices of their constituents or service populations into the discussion about the revitalization of Detroit and our southeast Michigan region. Let’s take them in order, first the stick, then the carrot.

Economic Circumstances
First, I think we’re going to be forced out of our silos by the general economic circumstances in which we find ourselves. We’re going to have to consolidate, merge, cooperate and collaborate in order to survive. There are several factors operating here and it is necessary to look at them one by one in order to understand how their convergence could have a strong negative impact on nonprofit organizations.

1. The state of Michigan faces a serious economic problem called a “structural budget deficit.” I refer the reader to research done by the Citizens Research Council in 2004 and 2005. Boiling it down, if the economy of Michigan suddenly improved drastically tomorrow, there would still be no resolution to this structural deficit problem and thus little more in the way of financial resources with which the state can provide necessary services to citizens.

The heart of the structural deficit is our prison system and Medicaid. These two hungry lions eat up a huge share of the state’s budget that is increasing almost geometrically each year. If we don’t muster the political will to re-invent the prison system and find a way to reduce the growing burden of Medicaid, these two juggernauts will continue to far outpace any but the most severe tax increases. The legislature over recent years – Democrats and Republicans alike (this is definitely a nonpartisan issue) – have demonstrated little interest in either reforming the incarceration system or in raising taxes to the extent needed to feed these two hungry lions and still have enough left over to provide the services necessary to the municipalities and the public.


More tomorrow on Michigan’s structural deficit and how it affects nonprofits.