Nov. 30, 2021

This paid piece is sponsored by Startup Sioux Falls.

Sioux Falls is facing a turning point in terms of its growth and the leadership and infrastructure necessary to support it. That shift also is reflected in the changing landscape of the city’s nonprofit sector.

Maximizing Excellence LLC is a consulting group that partners with organizations — including nonprofits — to improve effectiveness and achieve high impact. Founder Cindy Elifrits Peterson and consultant Rika Peterson recently completed a study on the relationship among philanthropists, nonprofits and the business community in Sioux Falls.

“When we set out to study philanthropy, it was motivated by this sense that there was a shift happening in the industry,” Peterson said. “We know that Sioux Falls philanthropy is its own brand — it works here differently than it does other places — but what comes next? With the growth of the community, how does Sioux Falls philanthropy respond to meet that need?”

What they found is that the relationship among donors, the business community and established nonprofit organizations is changing as new decision-makers take the reins from their predecessors. Additionally, the motivations of philanthropists and emerging business leaders are changing, but the level of generosity exhibited by this new generation is not wavering.

“I think philanthropy is as essential as it’s ever been to the success of our Sioux Falls community,” Elifrits Peterson said. “As a community grows, the needs of the community grow. When you think of the tremendous pace at which Sioux Falls has grown, the pace at which its needs are growing is the same, if not faster. Philanthropy plays a part in turning those needs into services that can meet those needs.”

In light of these changes, all three players involved — established leaders, emerging leaders and nonprofits — must learn to collaborate effectively in the shifting landscape. Elifrits Peterson said each group has its own perceptions of the other that may not be entirely accurate.

“It’s really important to our established leaders that the next generation of leadership understands the infrastructure and how it all came to be,” she said. “What they don’t realize is that the next generation also wants to know all of that. There is an opportunity for combined impact by ensuring that those emerging leaders do understand how it was done before so they can replicate the pieces that resonate with them, respect and honor what brought us to where we are today, and then they can contribute to that looking ahead.”

Those who participated in the communitywide survey indicated support of two to four organizations per year on average, with 50 percent of participants reporting a typical gift size of less than $100. Elifrits Peterson emphasizes that those community members have much more in common with larger, established donors than they might realize.

“While those who participated in the communitywide survey didn’t see themselves as philanthropists, anyone who gives of their time or treasure is a philanthropist — and what a wonderful thing to be.”

Who are the emerging leaders, and what are they looking for out of philanthropy?

In the context of this study, emerging leaders represent the next generation of philanthropy in Sioux Falls. They are decision-makers in their organizations, typically younger than 50, who are taking over for the established leaders.

According to Peterson, this is the first time Sioux Falls will witness a transition in the philanthropy space.

Emerging leaders today are seeking out personalized giving over the institutionalized giving of the previous generation. They want to engage with the organizations they are supporting and understand their missions in order to have confidence in their gifts of time and treasure.

“These emerging leaders are taking a step back and constantly assessing and reevaluating their giving on an annual basis,” Peterson said.

Elifrits Peterson emphasizes, however, that while emerging leaders may have a different perspective on how philanthropy should operate, they don’t differ from their predecessors in terms of values.

“There was more of an institutionalized process that established leaders gave through, and that’s just the way they learned philanthropy,” she said. “This next generation is just as philanthropic and just as passionate about giving, and I think what our established leaders can take a lot of pride in is that though this emerging group might do it a little differently, they have no intentions of giving less, and I believe they have been inspired by the established leaders.”

What does this mean for the nonprofit sector?

In light of the increased focus on engagement and personalization from emerging leaders — and for that matter, from community donors as well — nonprofits must step up to the task of stewardship.

“Whether an individual gives $20 or $20,000, they want to see the impact,” Elifrits Peterson said. “It’s important that nonprofits know that because it’s an important part of the story they tell.”

Peterson emphasizes that for nonprofits to be successful, they must work to differentiate themselves and engage with donors.

“Overall, the nonprofit sector in Sioux Falls has built a very strong reputation among its supporters, but especially as a new nonprofit, you expect this automatic philanthropic power and impact, and that’s not always the case and can’t be assumed,” she said.

Maximizing Excellence’s research shows that the key differentiator for nonprofits is stewardship.

“There are so many asks, and fatigue weighs heavy on the usual suspects,” Peterson said. “The differentiator is stewardship — not feeling like you’re constantly being asked but that you’re giving in a meaningful way to the organization and that you feel recognized.”

Learn more about Maximizing Excellence LLC

Maximizing Excellence is a success story out of the former Zeal Center for Entrepreneurship, now Startup Sioux Falls. Elifrits Peterson started the company 11 years ago out of a Zeal office space and has since grown her team to five and guided countless organizations and nonprofits through strategic planning processes and capital campaigns.

Follow along with Maximizing Excellence for more news on its upcoming study, The State of Sioux Falls Philanthropy.

Read our 2020 feature on Maximizing Excellence’s 10-year anniversary here.

Visit maximizingexcellence.org for information.