Sunday, February 10, 2013

New York Non Profit Press: The Upstate Difference

The Upstate Difference
Written by Fred Scaglione 

Everyone here at the New York Council of Nonprofits (NYCON) was extremely pleased when NYNP announced that they were expanding coverage to include the Greater Capital Region.  It is a natural progression from NYNP’s previous expansion to covering the Hudson Valley.
As fans and supporters of NYNP for many years, we have advocated for and worked to help the NYNP find ways to broaden its geographic scope and to also expand sector-wide.

Linking and bridging the information and “news” interests of downstate nonprofits with those upstate certainly has it challenges as they are often perceived as different worlds.   As a statewide association where our membership of over 3,400 nonprofits is evenly split between downstate and upstate, NYCON understands the importance of promoting and unifying the common characteristics, interests, and voice of our state’s charitable community. NYNP’s expanded geographic reach will undoubtedly be an important contribution  to narrowing the so-called “upstate-downstate divide”.

The divide is a matter of both reality and perception and is a product of deep historical, demographic, socio-economic, political, and cultural roots.  There is no question that nonprofits in the Greater Capital Region – and throughout “upstate” New York – face many of the same challenges as do their colleagues downstate whether they be seeking financial sustainability and unrestricted resources; struggling to do business with a state government that is wanting “more and better for less” while choking nonprofits with late contracts and payments and piling on unfunded regulatory and administrative mandates; and weakened private giving.

Of course the first question that emerges is where does upstate begin?   Most will say downstate is NYC and Long Island. The most liberal perspective would say that  downstate starts with Poughkeepsie because of the Metro North commuter train; then there is the question about what if any part of the  west side of the Hudson is included, such as Rockland.  A middle ground definition says that downstate is all that is south of the Tappan Zee, thereby dividing Westchester.

The real differences that exist are very much matters of scale, scope and socio-economic patterns.  A medium size nonprofit downstate for example would be considered a large nonprofit upstate.  For nonprofits, a major “felt” difference is the pocketbook issue.  The further down the Hudson Valley you go, the more expensive it is to operate and, on the other side of the coin, the greater access there is to donor wealth and organized philanthropy.

During much of the post-World War II period, mills and manufacturers dotted the landscape’s waterways and rail, providing a sound base for the economies of small cities and even far-flung towns and villages.  The broad transformation and deterioration of upstate New York’s economy over the past several decades have created a challenging  philanthropic environment.  

Philanthropy is very much a local phenomenon upstate. You can count on just a couple of fingers the number of foundations whose grant eligibility is restricted to nonprofits located anywhere in New York State or to nonprofits in any region upstate.   Given the high number and small size of cities, towns and villages, it is a complicated maze.

Historically, philanthropy in the Greater Capital Region and across upstate New York generally has been driven by several factors:

•    Locally-owned major businesses and banking – and the families who owned them – with strong, well-established and long-lasting roots in the community.  These business leaders and their families were the traditional community philanthropists and often founded the long standing charities.  The lineage of an often multi-generational, family connection to the local community remains some but is being lost with time as their businesses have declined, been sold or closed.  Banking is a good example as it seemed like every community had an independently-owned bank that was named after their town, city or county.  These banks typically played a leading role in local civic life with the Community Chest or now the United Way.  Some of these banks still exist, but by and large they have been acquired by those whose corporate headquarters and major charitable decision-making are elsewhere.

•    National or global corporations – Some communities were and still are in some ways are dominated by a particular national or global company – IBM in the Hudson Valley and GE in Schenectady, Waterford and Ft. Edward, for example.  These companies were extremely engaged in volunteerism and charitable giving and in many ways defined their local community. They saw and very much valued the connection between a strong, vibrant local community and a healthy, productive work force.  Globalization, significant downsizing,   the shift of corporate donations having a marketing value, and a greater focus on securing  property and other tax breaks from the local community, have dramatically changed the character of their relationship to the communities and the nonprofits in them.  In the recent years, some of these companies have been economically on the upswing.  It is important to note the Capital Region is branded as “Tech Valley” and has become a national and international center for Nano-Science research and micro-chip production.  The impact of all this on charitable engagement has yet to be determined but these plants seem strangely removed and remote from both the communities where they are located -- and the charities that serve them.

•    State government – In the Capital Region, the State Employees Federated Campaign (SEFA), was for many years a dominant philanthropic force, raising millions annually in a region that was dependent on the economic engine of the State.  The significant decline in the state workforce and the trend to toward designated giving has dramatically affected the scope and impact of SEFA.

•    Foundations – Unlike downstate, there are few foundations of significant size.  Community Foundations are growing in size and number and are becoming a significant leadership force in bringing together the traditional as well as the emerging philanthropists.  They are challenged however to secure unrestricted funds to support their own operations and to provide discretionary grants.

Upstate cities are declining in population as urban flight has continued for a generation.    As wealth in terms of people and businesses moves to the suburbs, people take their volunteer time and charitable contributions with them, preferring to invest in organizations within their own home school districts and communities.  It is increasingly difficult for urban-based nonprofits to attract charitable gifts especially those that are considered “major”. 

This situation stands in stark contrast to New York City, where the large numbers of poor and low-income individuals and families are balanced in part by whole communities of high-income and wealthy residents who willingly support and serve on the boards of local nonprofits.
Although much can be said about the urban-suburban demographic shifts, what is often neglected in this discussion is the truly rural areas of upstate. Rural communities have little tax base and employment opportunities, there is serious a lack of public transportation, and rural communities are extremely challenging and expensive for nonprofits to serve.  In these times where funders want more production and more efficiencies, rural services are often the first to be cut by nonprofit providers. And, quite frankly, their political influence is minimal.

Change in the upstate nonprofit landscape is afoot however.  In the Greater Capital Region, and all across upstate New York, nonprofits have begun consolidating with other similar, like-minded and complementary organizations in an effort to expand their programmatic and geographic reach while reducing administrative expenses by gaining economies of scale.  Regionalization is becoming more and more of a reality as it is increasingly clear it is no longer sustainable to have duplicative or otherwise competitive organizations in the same county or within neighboring counties.  The Governors Regional Economic Councils is having a huge impact on changing the parochial culture of upstate.  All of a sudden, that Hudson River is not the dividing force it once was. 

Nonprofits everywhere are facing difficult and challenging times.  However, the environment with which many Greater Capital Region and other upstate charities are attempting to cope is more difficult and challenging than many leaders of government and the downstate philanthropic community appreciate. The expansion of the NYNP will help promote greater understanding and respect for the challenging work being done by upstate nonprofits.

Doug Sauer is Chief Executive Officer of the New York Council of Nonprofits, Inc.
For the online article click here

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