The already close relationship between AIDS Help, Inc. and Wesley House Family Services just got a little closer. And it all presages a trend that is likely to become commonplace among the county's numerous 501(c)(3) nonprofit organizations in the coming months and years.
Several months ago, the two organizations, which serve disparate client bases, announced they would be combining their Internet Technology departments into one group, which would also be charged with graphic design work for the nonprofits. The idea was to cut costs while sharing strengths.
This week, administrators at AIDS Help and Wesley House served notice that they are taking this cooperation a step further by merging their outreach, volunteer and fundraising activities, as well.
The new team will be led by Jeremy Wilkerson, the current manager of Outreach and Fundraising with Wesley House.
The idea, Wilkerson said is to try to find ways to continue serving clients in an uncertain era of stagnant or shrinking budgets, disappearing grants, and increasing pressure from donors to do more with less.
"Grant funding, always intense and unpredictable, is becoming the proverbial needle in the haystack," Wilkerson said. "State and federal funding is stuck in cutback mode, and even fundraising has become a local challenge of creativity, venue and sponsorship. Collaboration and sharing makes sense on every level in 2014. Turf isn't a term nonprofits can afford anymore. Cooperation and blending or resources towards common goals is key."
Wilkerson's boss, Wesley House Interim CEO Bryan Green, is even blunter in his assessment of the situation.
"These are tougher times we're living through right now," Green said. "When you go to the annual luncheon they have at the Community Foundation of the Florida Keys, and see 120 or so nonprofits represented, it's madness in a way, in terms of all the duplication of services. Throw in the large-scale capital projects, like VNA/Hospice is having, and the Studios of Key West is looking for a couple of million dollars, and you've got a very tight climate out there, funding-wise.
"There are a limited number of people on this small island, and when you put money in one pocket, it's being taken out of another. So, we're trying to work smarter, and be more cost effective about it," Green said. "The more money you can raise, and the less money you spend on raising it, the closer you get to meeting that goal."
It was Green's initiative that made the recent cooperation between the two organizations happen, as he also happens to be the president of the AIDS Help Board of Directors.
"As it happened, AIDS Help has a fantastic social media guy who was very effective at getting the message out to potential donors, and Wesley House had the better I.T. department, so it's a perfect fit, really."
The urge to merge is not exclusive to these particular nonprofits.
Last week, a deal was struck between Heron Peacock Assisted Living, the Florida Keys Outreach Coalition, and the Guidance Care Center to essentially absorb Heron Peacock's properties. In this case, Heron Peacock announced that it intends to disband, as it simply can't afford to maintain its properties in Key West and Marathon.
But the bottom line of the announcement is the same general principle of the Wesley House-AIDS Help merger -- more and more streamlining is taking place in nonprofits resulting in fewer people managing a greater number of units with more money becoming available to serve the clients.
In Key West, the residents of Heron Peacock's facilitiy last week received brand new appliances, and had their properties tented, painted and repaired by local volunteers, bringing them up to FKOC standards. In Marathon, the guidance care center has similar plans for the Heron units.
AIDS Help Executive Director Scott Pridgen stressed that both his agency and Wesley House will be maintaining their identities as separate institutions, despite their collaboration.
"I was at the mayor's kickoff party and somebody asked me about the 'merger,'" Pridgen said with a laugh. "I had to explain to them that we haven't merged. All we've done is combined resources in a sense of managing certain things, without duplications. AIDS Help did not have the buying power to upgrade our phone system, whereas Wesley House did. But they didn't have their marketing down as well as we did, so that worked out well. It was a home run.
"We began to look at other ways we could combine our services," Pridgen continued. "We offer completely different services, but we're still able to cooperate. Our fundraisers and community relations people will plan and put together those events, but the dollars that are raised at those events will still be unique to the agencies themselves. Money raised at a Wesley House fundraiser will still go to Wesley House."
Pridgen agreed with Green that closer cooperation between nonprofits is proving to be a necessity as the country slowly recovers from the "Great Recession."
"I think all nonprofits are looking at ways we can work together, especially on administrative costs," Pridgen said. "Your direct costs are for the agency to use specifically for the mission of that organization and its clients. Then there are the indirect costs -- administrative, advertising and management. You still have to have people in those positions, but grants and those types of programs don't pay the full costs of the agency. So, we're looking at ways to help each out on like functions. This is a perfect example, and it will save both agencies money. It's win-win."
Pridgen acknowledged that at least one group will end up being left out of the winnings: the employees who are let go in the name of greater efficiency. While admitting that firing people can be the hardest part of his job, he said that it's a necessary evil, done for the greater good.
"With every business, and especially with nonprofits, we are here to serve the community. Unfortunately, whether it's the executive director position or any position in any nonprofit, we simply can't protect all the jobs," Pridgen said. "There are always going to be some people who get caught in the crossfire of the reorganization. If we lose a grant, it would be foolish for any organization to try to keep employees that you can't afford to have, or your doors wouldn't be open very long."
Pridgen pointed out that nonprofits are always under a microscopic lens, and are being asked how high their administrative costs are, and how those costs relate to the agency's bottom line.
"In a sense, we're at the mercy of fundraising and donations and grants, and they want to see value for their money," he said. "We want the biggest bang for the buck to be used for the client, and every donor wants that too. They don't want to see 50 percent of their money going to costs."
Pridgen added that the agency's education budget was recently cut in half, resulting in the loss of another employee, for a savings of $52,000. However, the merging of outreach, volunteer and fundraising activities, while saving money, has not resulted in any job losses.
"It's important that the community know that this is the trend," Pridgen said. "The larger municipalities are the ones now getting the bulk of the funding for everything. Rural communities like ours are really struggling to maintain our funding, so we're all looking for ways to stay open. [Partnering with other organizations] is something that's on its way."
Another player in the nonprofit world who is pleased with the direction AIDS Help and Wesley House are heading is Key West attorney David Paul Horan, who serves as the chairman of the county Human Services Advisory Board (HSAB), which allocates about $2 million each year to area organizations.
Horan also has a seat on the Shared Assets Board, which distributes the interest each year from $3 million confiscated by the sheriff's office from convicted drug dealers. As the only person on both boards, Horan's position is a unique one.
"For years and years the HSAB has been preaching that we need to stop duplication of services," Horan said. "We've also said that the best thing for many of them to do is have their administration under one umbrella, watching over expenditures, and giving us better financial information. With fewer organizations, and a better financed administration, they could afford to hire chartered public accountants to report to us. These are the kinds of things we've been asking them to do for a long time."
Horan said that he is aware of the "turf war" that exists between organizations providing similar services, but said that it's essential that such agencies join forces for the greater good.
"Not only would we be happy to see that happen, Horan said, "but we would reward them appropriately for doing so. When you lose federal and state grants, the hardest thing for me is to tell an organization that we can no longer afford to fund them because they're effectively out of business. So, I'm certainly glad to see the organizations combining and slimming down their footprints."
Horan pointed out that another thing the HSAB is always looking at is the salaries being paid to the administrators of the nonprofits, some of which are very high.
"If you're paying that kind of money, you can't afford too many administrators," he said.
As an example of how tight budgets have become, Horan referenced the Shared Asset Board.
"We had a five-year contract with a bank for 4.6 percent interest," he said. "When it ended, the new rate was .6 percent. Now that the banks can borrow from the Fed for practically zero, why would they want to pay us higher interest? Last year, the total income from the fund was $20,000. That kind of money doesn't go very far these days."