Jumpstart Non Profit Funding

Nonprofit Business Case Study: Jumpstart

Overview

By some standards, Jumpstart could be deemed a successful non-profit. This is more so the case given that it has gradually morphed into a national organization and has managed to transition from a founder-led organization into a professionally managed entity. The latter was an uphill task for the organization. However, despite remaining true to its mission, expanding nationally, and embracing a more professional approach in the management of its affairs, the organization has encountered a number of challenges that could get in the way of future success. Some of the said challenges will be highlighted in this write-up and proposals to address them floated.

Main Issue

From the onset, it would be prudent to note that one of the main issues that Jumpstart grapples with at the moment is access to capital to support its growth. At present, the organization is largely dependent upon five funding streams, i.e. the government, foundations, corporations, individuals, and other sources. Data availed in the case study indicates that Jumpstart is overly dependent on government and foundation funding. Indeed, 30% of its funding comes from the government. Foundations account for 28% of the organization’s funding. Overreliance on government and foundation funding has several downsides. As a matter of fact, as has been pointed out in the case study, “reliance on the government as a funding source has significant tradeoffs, and managing the process takes creativity and persistence.” This is more so the case when it comes to the constraints placed upon such funding. This, as has been the case with Jumpstart, could affect certain aspects of operations. It is also important to note that government funding could fluctuate from one year to the other. This is particularly the case given that the availability of such funding could be affected by a wide range of factors including, but not limited to the political environment. There are also numerous claims on the very same funding from multiple organizations and entities. All these factors conspire to indicate that this is not an ideal source of funding to heavily rely upon. Similarly, foundation funding could also have significant and somewhat complex constraints. It therefore follows that Jumpstart should reign in its overdependence on these two sources of funding.

Yet another issue that Jumpstart grapples with is a significantly high employee turnover rate. It should be noted that a high employee turnover rate could jeopardize organizational operations and negatively impact the efficiency by which it delivers on its mandate. This is more so the case given that as Tyson (2012) points out, with a high employee turnover rate, an organization loses more talented, skilled, and experienced employees that it can replace. The high rate of employee turnover could in this case be attributed to a number of factors. Some of the factors that could be gleaned from the present case study are inclusive of lack of growth opportunities, poorly designed career tracks, as well as work-related pressures (i.e. the setting of difficult-to-achieve standards). Although the organization has taken deliberate steps to solve the turnover issue, available data indicates that the problem is far from being solved. This is more so the case given that Jumpstart has only managed to cut the exceptionally high employee turnover rate by 50% - effectively meaning that employees are still leaving.

Stakeholders Impacted by the Main Issue

There are a number of stakeholders impacted by the two issues highlighted above. Three of the key stakeholders will be highlighted below. These are inclusive of children who would benefit from the programs, students who would want to work as preschoolers, and employees.

i) Children who would benefit from the programs

In the absence of sufficient and sustainable funding, Jumpstart cannot be able to fulfill its mandate to children – specifically children from low-income neighborhoods. Indeed, as has been pointed out in the case study, the organization has been struggling to attract funding to support growth. This effectively means that the organization does not have the support that it requires to continue opening new sites. In effect, this means that there are children out there who would benefit from the programs but cannot do so at present because the organization is not capitalized enough.

ii) Students who would want to work as preschoolers

Failure by the organization to secure sufficient capital also means that there are students who would want to function as preschoolers but cannot do so at the moment as the opportunity is yet to present itself. The problem is further compounded by the various restrictions of federal Work-Study dollars. As has been pointed out in the case study, Work-Study rules for instance “dictate that Jumpstart can only have 40 students participating per campus.” In effect, this means that many students who harbor the desire to function as preschoolers are inevitably turned away.

iii) Employees

Lack of growth opportunities, poorly designed career tracks, as well as work-related pressures (i.e. the setting of difficult-to-achieve standards) could negatively affect the performance as well as general wellbeing of employees.

Solutions Highlighted in the Case Study

To begin with, in seeking to address the issue of insufficient funding, Jumpstart has successfully slashed costs on various fronts. For instance, following the realization that overhead costs were too high, the decision was made to slash costs per-tutor hour. The move to embrace a more professional (as opposed to founder-led) approach could also have benefited the organization on this front. This is particularly the case given that the infusion of a more skilled team inspired the confidence of the main fund sources.

On the other hand, the company has sought to address the high turnover concern by increasing the average salary of employees. This could have had the effect of motivating employees. Further, the organization has put in place measures to ensure that existing employees are able to transition to managerial positions within the organization. The impact of this particular move is enhanced career growth of employees within the organization. Simons (2011) makes an observation to the effect that “if employees stay or stagnate in one position for too long, they might search for another job where they can advance” (79). In promoting existing staff to more senior positions, Jumpstart could have helped quell the feeling of stagnation – resulting in the willingness of more employees to stay.

I am of the opinion that although the strategies embraced by the organization, as has been highlighted above, have been effective to some extent, there is still more that could be done to achieve better results on those two fronts. I am also of the opinion that the solutions highlighted in efforts to counter funding shortfall are largely short-term and, hence, there would be need to embrace more sustainable strategies.

Proposed Solution

In the final analysis, it should be noted that Jumpstart needs to grow certain funding avenues and minimize its overdependence on both government and foundation funding. At present, these two sources account for more than 50% of all capital that the organization has access to. More specifically, I would advocate for increased focus on individual private donors. This is more so the case given that unlike government grants, this source of funding is associated with less restrictions and happens to be more flexible. Thus, this would in effect make it possible for the organization to secure capital to support growth – which is presently the single-biggest challenge that the organization faces. Jumpstart could also seek to grow its corporate funding.