As the economy took a hit over the last few years, Fred Stock saw the demand for his organization’s services grow dramatically. That’s because the result of a down economy is more and more people seeking out more of the services that Jewish Community Services of South Florida has been providing for years. But keeping up with the higher demand has not been easy, especially when coupled with the funding challenges of operating as a not-for-profit entity.
“There’s an increased need corresponding with a reduction of available dollars,” says Stock, the president and CEO of the Miami-based social services agency, which services the Dade County community.
As fundraising in the overall community has dropped, so has the amount of funding dollars coming into the organization.
“So we need to figure out ways to cover the overhead for the agency,” Stock says. “One of the ways is that you reduce those costs by being more efficient.”
Stock says that this is a challenge many more not-for-profit organizations are dealing with today.
One way he says these agencies can manage costs is by providing a mix of free and paid services. By expanding in areas that have a “fee for service,” such as home care, the organization is able to cover costs of the services that it provides for free.
“We’re trying to expand our capabilities to provide services that can reimburse us for our costs, and we can generate some surpluses to pay for the programs that people don’t have the ability to pay for,” Stock says.
However, the crux of the agency’s strategy to become more efficient involves developing partnerships with organizations that share its service goals and funding model.
“We have definitely taken on the belief that in order to be successful, we need to partner,” Stock says.
“By combining, we can serve more people, create operational efficiencies, expand our reach, and it will allow us over the long haul to create more opportunity to serve people.”
While many smaller not-for-profit agencies are quality organizations, they are often limited in what they can do because they don’t have the infrastructure or funding sources to expand and grow. Leading a larger agency, Stock is now working harder to partner with smaller entities so both parties make progress on shared goals. An example is how the agency is partnering with assisted living facilities and HUD 202 housing projects where there are large constituencies of people who need its services.
Stock says you want try to align yourself with agencies and programs that relate to where you can provide services but also with agencies that have a similar mission.
“You maximize their capabilities and their expertise,” Stock says. “You bring that expertise now into this affiliated entity … and then you can expand your service capability because potentially that service can be located in a community that you’re not serving.”
The other advantage of partnering is the potential to combine operations or share resources where appropriate, which can increase efficiencies for both parties. So if two entities are doing billing with a number of grants, there is an opportunity to combine that billing for cost savings.
Stock says constantly monitoring and improving efficiency is something that not-for-profits and businesses should be doing whether or not there are funding issues. By partnering up, the agency continues to find strategic ways to carry out its mission and deliver its services more efficiently.
“We’re a $15 million agency,” Stock says. “We can bring some of that infrastructure — the funding, the marketing, to that new agency and enhance that agency’s effort to create revenue. And then you can create revenue for a larger organization and you have a whole lot more clout, because you have a whole lot more reach. You’re serving more people. In that process, you can find savings within that entity that you can then put back into your programs to yet provide more services.”
Start inside
Many not-for-profit entities have faced funding challenges as a result of the economic recession. Jewish Community Services of South Florida, which provides its services at no cost, is funded primarily through grants and fundraising. But that funding is limited and most of the agency’s funding sources do not provide enough money for its administrative component. To maintain services as money becomes scarcer, president and CEO Fred Stock has led a number of initiatives to be more efficient in this area.
“We’ve had to become much more efficient in the way we provide services and in the way we fund our administrative component,” Stock says. “In an agency, you have direct services and then you have the infrastructure that you need in order to run these services, things like billing, rent, offices and all of that, which are fixed expenses to some degree.”
To increase efficiency in the administrative component, the agency has consolidated some of its offices and begun looking at ways to utilize space better. It’s also started to streamline processes in internal operations such as billing, maintenance and systems.
“We’ve been able to save a substantial amount of money in these areas that has allowed us to continue to provide services at the same rate,” Stock says. “So even through we’ve suffered from reductions in funding, we’ve been able to still maintain the levels of service that we’ve provided over the last few years.”
How to reach: Jewish Community Services of South Florida, (305) 576-6550 or www.jcsfl.org
