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New Research from Common Impact and Capital One Finds For-Profits Outspend Nonprofits Almost 3:1

Posted: June 28, 2010

Skills-based volunteering underutilized as solution to address "capacity gap"

Nearly 40 percent of nonprofit organizations cite an underinvestment in operational infrastructure as the top barrier they face in delivering effective community programs and services, according to a recent study conducted by Capital One Financial Corporation and the nonprofit group Common Impact.

The study, launched in 2007, includes three phases of research. The first phase, completed in July 2008, found that the vast majority of nonprofits significantly underinvest in operational areas such as Marketing, Human Resources and IT. In the second phase of the research, completed in the spring of 2010, Common Impact sought to benchmark capacity building and mission effectiveness at nonprofits.

Chronic underinvestment in capacity building continues to hamstring nonprofits, the second phase of research shows. More than 79 percent of nonprofit respondents report spending two percent or less of their operating budgets on capacity building. On average, nonprofit respondents reported spending about 8.7 percent of their total budget on infrastructure, compared to an average of around 20 percent at for-profit companies.

Lack of access to functional area expertise was cited as a major impediment to building capacity. Volunteers make up 50 percent of the human capital at nonprofits, but most nonprofits have no management structure for overseeing volunteer work, and one-third of volunteers drop out of service every year, creating a significant challenge for nonprofits looking to engage volunteers for long-term program and service support.

In addition, the research shows that nonprofits largely underutilize skills-based volunteers as a resource for boosting capacity through the transfer of specific functional area expertise.

"Our research underscores both a lack of investment in nonprofit capacity and an enormous opportunity for nonprofits to access skills-based volunteering to help close that gap," noted Common Impact Vice President Karen Horwitz. "Skills-based volunteering is a way to deepen relationships with existing volunteers, develop on-going mutually beneficial relationships with companies - all while building much-needed infrastructure and not adding strain to budgets. When it's done right, there's a measurable payoff for nonprofits, companies and volunteers."

Companies such as Capital One have helped nonprofits to close the capacity gap by providing pro bono volunteers in areas such as Marketing, Finance, IT, HR, and Legal.

"At Capital One, pro bono volunteerism reinforces our associates' long-standing dedication to our communities. Since 2008 alone, our associates have contributed more than $5 million in professional services to help nonprofits develop Brand Marketing, Human Resources, Information Technology, Finance, and Legal infrastructure," says Emily Talley, Senior Director of Community Programs, Capital One. "By connecting the unique talents of our associates with our local nonprofit partners, we enable these organizations to more effectively reach the children and families they serve."

For example, during a pro bono engagement with Goodwill of Greater Washington, Capital One IT associates addressed the operational infrastructure and stability of the nonprofit's technology platform. Based on the recommended strategy, Goodwill realized more than $125,000 in annualized savings.

"The input and value they provided was worth more money than we could afford," says Goodwill of Greater Washington President and CEO Catherine Meloy. "And looking back over the past couple years since this work was done for Goodwill of Greater Washington our organization has grown both in an innovative approach to our extensive technology, and we are more financially sound through the efficiencies and effectiveness that were implemented following the Capital One study."

The third phase of research, which is underwritten by Capital One, will be an analysis of the extent to which nonprofits can improve performance by investing in key infrastructure. Those findings will be released in 2011.

About Capital One

Capital One Financial Corporation, headquartered in McLean, Virginia, is a Fortune 500 company with approximately 1,000 branch locations primarily in New York, New Jersey, Texas, Louisiana, Maryland, Virginia, and the District of Columbia. Its subsidiaries, Capital One, N.A. and Capital One Bank (USA), N. A., offer a broad spectrum of financial products and services to consumers, small businesses and commercial clients. We apply the same principles of innovation, collaboration and empowerment in our commitment to our communities across the country that we do in our business. We recognize that helping to build strong and healthy communities -- good places to work, good places to do business and good places to raise families-- benefits us all and we are proud to support this and other community initiatives.

About Common Impact

Common Impact is a nonprofit organization that connects skilled professionals from global companies to high-potential local nonprofits. Our employee engagement programs match employee-volunteers with nonprofits that need help overcoming key business challenges. This innovative approach to corporate community service enables companies to realize a positive return on their social investment while building stronger teams and developing employee skills. At the same time, this access to private sector talent enables nonprofits to amplify their impact on the constituents they serve. Ultimately, our work helps foster stronger communities wherever those companies operate. Further information can be found at http://www.commonimpact.org/.

For more information, please contact Meghan Gardner, Public Relations Specialist
(e-mail: mgardner@commonimpact.org, phone: 857-222-2864).