A Commentary on Nonprofit Policy Development and Reform: The City and County of Denver’s Investment in the Wellbeing of the Nonprofit Sector
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Julia Mahoney
,
Wil Alston
Abstract
Governments and nonprofits partner with one another to provide services, with governments typically the funders of services and nonprofits the deliverers of these services. The City and County of Denver, similar to cities around the country, rely on nonprofits to provide vital services to their communities for a multitude of reasons. For Denver, this is particularly evident in the extensive annual funding that the City and County provides to nonprofits. However, even as they receive government funding for their service delivery, nonprofits regularly report significant challenges in their partnerships with government. This commentary reviews the current state of Denver’s nonprofit sector and its government-nonprofit partnerships, and suggests process and policy recommendations to strengthen the nonprofit sector and its partnerships with government.
1 Introduction: Denver’s Nonprofit Story
Across the country, governments and nonprofits engage in what are often mutually beneficial partnerships. Governments provide funding that advances nonprofits’ mission and enables the nonprofits to deliver services they would not otherwise be able to offer. And, for their part, nonprofits can reach into and gain trust in diverse communities – something that governments often struggle with (Mason 2022). In the City and County of Denver, which will be referred to as “the city” throughout this commentary, at the Denver Office of Nonprofit Engagement 2021 (D-ONE) specifically, we see this as a highly beneficial partnership, and work to support, develop, and sustain this partnership.
In 2017, Colorado’s nonprofit sector created roughly “$20 billion in direct spending and another $7 billion in value through volunteerism,” with the total economic impact of the state’s nonprofit sector estimated to be “$40 billion, which represented 11.3 % of the economy” (Philanthropy Colorado 2017). The same report stated that the Denver Metro area alone was home to over 12,000 nonprofits which led to $13.2 billion in spending and $20 billion in revenue. Like other municipalities nationally, the city utilizes nonprofits, using grants and contracts, to provide needed services to residents.
Despite these numbers, the Denver nonprofit sector continues to face ongoing challenges which were intensified by the COVID-19 pandemic. D-ONE sees these challenges falling into two key areas: internal city concerns and external issues experienced by nonprofit organizations.
Internally, the city struggles with a variety of activities associated with nonprofits. First, the city does not have a clear method to track its engagement with nonprofits, whether that is via grants, contracts, or non-financial partnerships, which leads to a lack of knowledge on how often it relies on the sector. Another concern is the language government uses that refers to nonprofits as vendors rather than valuable partners. Furthermore, leaders across the city government have different views and different levels of knowledge about the sector, leading to inconsistent nonprofit partnership processes and operations across government. This contributes to the creation of too much “red tape” for nonprofits that becomes too burdensome and overwhelming for them (Denver Office of Nonprofit Engagement 2021; Denver Strategic Partnerships Commission, Colorado Nonprofit Association, and Denver Office of Strategic Partnerships 2020).
As for external nonprofit issues, nonprofits struggle with staffing and funding issues, reduction in programming, and an ever-increasing need for more and better capacity building resources (Denver Office of Nonprofit Engagement 2021; Denver Strategic Partnerships Commission, Colorado Nonprofit Association, and Denver Office of Strategic Partnerships 2020; National Council of Nonprofits 2014; Pettijohn and Boris 2013). D-ONE believes it is the city’s responsibility to develop effective responses to these challenges, as the instability of the nonprofit sector directly impacts the city’s ability to deliver promised services. Moreover, it is the city’s responsibility to support a nonprofit sector that provides resources to residents and bolsters the economy and workforce of Denver.
The solution, for both the city and nonprofit sector, lies in having a healthy nonprofit ecosystem and for the city to play a vital role in achieving this. This commentary outlines D-ONE’s approach and investment in the nonprofit sector and shares policy and process recommendations for other municipalities.
2 A Model to Inform Our Work
D-ONE is housed within the City and County of Denver’s Agency for Human Rights & Community Partnerships (HRCP). The office was created in 2004 by Mayor John Hickenlooper “to protect human rights, build capacities, and strengthen connections” resulting in “stronger relationships in the community through collaboration, communication and advocacy.” (City and County of Denver 2024). D-ONE is composed of a director, two program managers, a program coordinator, one program evaluator/data analyst, and two interns. D-ONE works closely with HRCP’s Nonprofit Engagement Commission (DNEC) which consists of approximately 15 local nonprofit supporters that are appointed by the mayor. The purpose of the commission is to advise the administration about needs and resources affecting the well-being of the nonprofit sector. Ultimately, the vision for D-ONE is to adopt engagement strategies that utilize: 1) community-led initiatives; 2) partnerships between city agencies and nonprofits; and 3) capacity-building collaborations that expand the skills, tools, and data resources of the two sectors.
To achieve its vision, D-ONE utilizes the Urban Institute’s recent study of social sector infrastructure (Tomasko et al. 2023). While the study focuses on the national level, it includes excellent recommendations that D-ONE can use to inform local policy development and propose strategies to address the challenges in the nonprofit sector.
The social sector consists of private organizations, mostly nonprofits, that are dedicated to tackling social issues. The social sector infrastructure is the network of support organizations that bolster the social sector (Tomasko et al. 2023). The Urban Institute’s study makes the following four recommendations to strengthen the social sector infrastructure:
Develop and disseminate clear narratives that communicate the importance of infrastructure to current and potential infrastructure funders and users.
Offer current and potential infrastructure funders, providers, and users regular opportunities to learn about the full scope of the social sector infrastructure.
Create tools that provide feedback on infrastructure services by adapting current assessment models to the social sector infrastructure, or initiating efforts to design new feedback systems.[1]
Increase revenue sources for infrastructure providers to improve their financial security and the accessibility of infrastructure services for everyone in the social sector (Tomasko et al. 2023).
D-ONE uses these and other strategies to create programs, policies, and partnerships that strengthen social sector infrastructure. To advance its work, D-ONE conducts research, utilizes data from its research to inform solutions, and engages its stakeholders that hold similar values, goals, and solutions.
3 Investment in the Nonprofit Sector – Creating Solutions
3.1 Research to Inform Solutions
D-ONE has executed many projects and programs that are focused on the wellbeing of nonprofits and the city’s partnership with them. D-ONE starts with research and data which help to inform the strategies and approaches used in its investment in the wellbeing of nonprofits. The Well-Being of Nonprofits in Denver: A Blueprint for Change (2020) was the first project which informed much of D-ONE’s current work. D-ONE (formerly the Denver Office of Strategic Partnerships), the Denver Strategic Partnerships Commission (now DNEC), and the Colorado Nonprofit Association, partnered to interview over 300 nonprofits to understand challenges faced by the nonprofit sector, and offered recommendations of how to support the sector. The report identifies six challenges that nonprofits experience when working with the city:
inefficient city contracting processes;
the city’s lack of transparency and communication;
the city’s ‘big-dog mentality’;[2]
delays in city processes;
lack of trust and suspicion; and
the city providing insufficient funds for nonprofits to run their programs.
The study recommended the creation of a “nonprofit task force” that would review the city’s process for providing grants and contracts to local nonprofits, as well as the overall relationship between nonprofits and the city. The task force would also develop a set of policy recommendations that could guide the city and its agencies in how they partner with the nonprofit sector.
Thus, at the direction of Mayor Michael B. Hancock, a Nonprofit Task Force was formed. In March 2021, the 28-person Nonprofit Task Force began convening and hearing from city departments and a variety of nonprofits already contracting with the city. To avoid burdening large numbers of nonprofits with additional requests for information, the Task Force used professional facilitation and a “Senate Hearing” model with two co-chairs to run the Task Force. City agency concerns ranged from the lack of readiness of nonprofits seeking to do business with the city to worries about the capabilities of nonprofits to effectively manage the contracts once awarded. Nonprofits shared that the city’s contracting process was too complex, too time consuming, and had requirements that were barriers to success, and that the nonprofits wanted to be seen as city partners and not vendors.
D-ONE saw the creation of this Task Force as its first big investment in the well-being of the nonprofit sector. The Task Force was not only successful in creating recommendations for the city but was an excellent model for how the city and nonprofit sector stakeholders can work together to create actionable solutions to identified issues. The 28 individuals on the Task Force represented city agencies and nonprofit and philanthropic leaders in Denver, highlighting D-ONE’s collaborative approach to its work, which it believes is crucial in supporting the sector. This collaboration allowed for a robust policy development process, consistent with the Harvard Kennedy School’s “Smart Policy Design and Implementation” report which discusses the importance of stakeholder involvement in all facets of the policy process (Harvard Kennedy School Evidence for Policy Design 2023). The Task Force policy recommendations went through multiple iterations to ensure they reflected the voices of those affected by them. Currently, D-ONE continues to refine the Task Force policy recommendations which, when finished, will be shared with the City and County of Denver, the city’s new administration, D-ONE’s partners, and nonprofit stakeholders.
D-ONE’s data and research also bolsters new policies currently in development. Aiming to understand the economic impact of nonprofits, D-ONE has completed studies on the economic impact of the nonprofit sector in Denver and an analysis of City and County of Denver contracts with nonprofits executed with the City in 2021, 2022, and 2023 (until June first of 2023). These reports and research studies have been fundamental elements of D-ONE’s work in assessing the health of Denver’s nonprofit sector. As stated earlier, in 2017 there were 12,430 nonprofits in Denver Metro area that provided roughly 120,000 jobs, which ultimately had a $13.2 billion impact on spending and $20 billion impact on revenue for the Denver Metro area[3] (Philanthropy Colorado 2017).
Furthermore, the 2023 City and County of Denver contract analyses yielded compelling results. Over the past two and a half years, the City and County of Denver has contracted with 629 nonprofits totaling 1,070 contracts. More impressively, the amount of funding going to these nonprofits from the city totaled $969.5 million (see Table 1) (Denver Office of Nonprofit Engagement 2023).[4]
City and County of Denver nonprofit contracting data 2021, 2022, Jan first 2023–June first 2023. NPOs, nonprofit organizations.
| 2021 | 2022 | 2023 | Totals | |
|---|---|---|---|---|
| Unique NPOs | 243 | 227 | 159 | 629 |
| Number of NPOs contracts | 436 | 408 | 226 | 1,070 |
| Total amount (in millions of dollars) | $342.0 | $318.9 | $308.7 | $969.6 |
| Percentage of total city contracts | 26.4 % | 23.3 % | 25.7 % | 25 % |
As this data makes clear, the nonprofit sector has a significant impact on Denver’s economy. Given this economic influence, it is concerning that the city has not assigned administrative authority to any entity to manage its relationship with the sector. Therefore, D-ONE is creating policies that specifically speak to ownership and authority of the work it does. These policies would:
Officially name D-ONE as an office with citywide scope that has the authority and capacity to develop and implement city-wide policies specifically related to nonprofits;
Have D-ONE work with all city agencies to guide sector engagement;
Let D-ONE lead and manage city responses for the issues faced when engaging the nonprofit sector.
D-ONE’s research also indicates nonprofits are still asking for support in building the capacity of their organizations. To address this, D-ONE developed two programs offering technical assistance and training to small and local Denver nonprofits: “The Nonprofit Technical Assistance Program” and “Doin’ Business with the City.” For the technical assistance program, D-ONE is partnering with Resilia, a national company, to provide technical assistance to nonprofits in the form of one-on-one learning, online training and workshop videos, and support through a network of nonprofit peers. Similarly, with “Doin’ Business with the City,” nonprofits can attend quarterly workshops that specifically provide training on how to contract with the city. Some of these workshops will also act as “deep dives” into specific topics such as monitoring and evaluation for city grants, creating required language access plans, and legal topics regarding lawyers and insurance. If the city can help build the sustainability and capacity of nonprofits, D-ONE believes they can continue to grow and provide additional services to the residents of Denver.
Finally, D-ONE’s research and collaborations have also helped inform and guide internal, government projects that aim to address suggested policies from the Nonprofit Task Force Policy Recommendations. All with the goal of supporting the wellbeing of the nonprofit sector, initiatives included internal changes such as changing the D-ONE name from the Denver Office of Strategic Partnerships to the Denver Office of Nonprofit Engagement to better reflect the purpose of the office’s work. Along with the name change, D-ONE added a nonprofit senior program manager to oversee the office’s nonprofit programming (programs serving nonprofits, policy efforts, and research). Other initiatives included partnering with the Metro Denver Loan Fund to provide loans for small nonprofits specifically aimed at increasing their capacity and working with other city agencies to create a centralized grants portal for nonprofits specifically, a model derived from New York City’s Accelerator Model. Most recently, D-ONE has embarked on an awareness campaign called “Nonprofit Strong” that seeks to inform the public on the power and strength of the nonprofit sector in Denver.
Overarching through all of D-ONE’s programs and projects is program evaluation. D-ONE has an evaluation team that builds program evaluation into all its work. D-ONE understands the importance of evaluation as it helps to develop sound programming and projects and provides evidence of efficacy in implementation. D-ONE also creates reports and infographics for data transparency as the office invites community members to collaborate.
3.2 From City Program to Nonprofit Partnership – The Collaborative Impact Fund of Denver
D-ONE is continually looking to partners to support its many innovative projects. One such project that turned into partnership is the Collaborative Impact Fund of Denver (CIFD). The CIFD was created to pass-through city funds to aid the city in tackling some of its largest social issues.
The development of CIFD was largely influenced by policy research on “Mayor’s Funds” models from local governments around the country. These models included New York City, NY; Los Angeles, CA; Philadelphia, PA; Las Vegas, NV; and Fort Collins, CO. “Mayor’s Funds” were developed to address gaps in city services by establishing partnerships with the social and philanthropic sectors. At the same time, former Mayor Hancock wanted to explore innovative ways to partner with communities to support the city – thus the CIFD was conceptualized.
CIFD sees itself as being uniquely situated between government and the nonprofit sector and is anticipating developing new collaborations with other city agencies, nonprofits, and philanthropy. A potential project CIFD is looking to implement includes managing a pilot-program aimed at increasing nonprofit employee well-being. This program would provide funds to small nonprofits and allow those organizations to provide mental health support to their staff and organizational well-being support (e.g., team-building events).
4 Conclusion: Investment in the Nonprofit Ecosystem through Partnerships, Process, and Policy
The city should be invested in the wellbeing of the nonprofit sector for a multitude of reasons. Aside from the economic impact and service delivery benefits, the city depends on the sector for trusted community outreach and engagement. Nonprofits can connect with city residents at the neighborhood level to provide services tailored for specific community needs. Moreover, many trusted nonprofit leaders are seen as respected field-experts and volunteer their time to serve as city board and commission members, which adds a level of transparency and accountability to city operations.
D-ONE is invested in not just one nonprofit but all nonprofits and components of the nonprofit ecosystem. D-ONE recommends that other municipalities ensure they are approaching their nonprofit work in a comprehensive manner. Governments should first establish a model for how to approach working with this sector, for example, by following the recommendations of the Urban Institute’s infrastructure study. Local research and data collection should be a priority as findings inform solution development. When possible, the municipality executing this work should look to establish working groups and task forces with stakeholders and partners to build trust with the nonprofit sector, so it ensures all voices and viewpoints are represented. Finally, evaluation should be built into all program and policy development. Monitoring and reporting should provide data that speaks to the efficacy of the program or policy being enacted, and to create transparency in the work. Investing in the nonprofit sector means that one cannot simply address one aspect such as funding. These investments should address the array of interconnected issues that nonprofits face as they engage with the public sector.
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© 2024 the author(s), published by De Gruyter, Berlin/Boston
This work is licensed under the Creative Commons Attribution 4.0 International License.
