Hiring for dollars: does your agency need a development director?

As recreation and park administration continues to evolve and encompass broader aspects of life, financial concerns remain an issue for providers. In the past, various strategies have been used by park and recreation agencies to meet financial responsibilities. Such strategies have included user fees, partnerships, retrenching programs and relying on volunteers.

Another strategy has been soliciting charitable contributions from individuals, corporations and granting agencies. To secure these philanthropic dollars, some park and recreation agencies have hired development directors whose sole responsibility is generating additional revenue for the department. Does this strategy make sense?

In 1996, $552 million in grants was awarded to recreation agencies in the U.S. This figure represents only 2 percent of the total grants awarded that year, so obviously grants are a potentially vast resource for park and recreation agencies. Foundations benefiting nonprofit agencies have steadily grown in the U.S. in recent years, and in 1994 represented $9.4 billion dollars in revenue. As far back as 1978, Wayne Kennedy observed that "to remain a viable service in the community, the park director needs to be responsible for acquiring gifts of parkland." Many recreation professionals today echo that sentiment.

Surveying the Field

To assess whether development directors are successful in securing foundation grants in park and recreation agencies, I led a team that surveyed recreation superintendents and directors in Indiana, Ohio and Illinois. We were interested in determining whether a difference in success existed among the options or having no development director, a part-time development director, a contract development director or a full-time development director. The questionnaire solicited responses to questions relating to agency characteristics, agency fundraising practices and success in receiving foundation grants. Success was based on the number of foundation grants that were acquired in the preceding five years. We mailed a full questionnaire package to the 198 directors who accepted the invitation, and eventually received 178 completed questionnaires (compared to the 459 superintendent/directors we initially contacted).

We discovered a high level of activity in this regard. In fact, one agency had applied for 250 grants and had received 75 grants in the preceding five years. Although we didn't look at the amounts of the foundation grants, 75 grants is nonetheless quite an addition to a park and recreation department's operation.

This result demonstrates the opportunity that park and recreation agencies have in pursuing foundation grants. (In 1996, there were 42,000 granting foundations, which awarded a total of $13.8 billion.) We also found two agencies that had more than 21 percent of their operating budget come from foundation grants.

There was representation among small, medium and large-sized communities in this study. Thirty-nine percent of" the respondents served communities with populations under 20,000. Forty-eight percent of respondents served communities of populations between 20,001 and 99,999; 14 percent of the respondents served communities of more than 100,000. The smallest community size was 1,450, and the largest community was 500,000. The average size of the community served was 49,452.

We found a positive relationship between community size and success in receiving foundation grants. The larger the community, the larger the recreation department, the greater the number of demands and the greater the resources necessary. Agencies then are able to hire a development director. In this study, the percentage of agencies that had full-time development directors was the greatest among communities over 100,000 in population.

In terms of fundraising activity, respondents seemed to be fairly active in trying to secure alternative finances. For instance, 70 percent had attended at least one grant-writing workshop in the preceding five years.

The greatest number of grant-writing workshops attended was 12. As well, 43 percent of respondents had a nonprofit foundation set up as a separate entity to their organization. In terms of actual grant work, a large range was found in the number of grants applied for in the preceding five years.

The questionnaire also asked respondents to indicate the percentage of their operating budget that is compromised of foundation grants. Generally, fundraising receipts represented a small portion of budget revenues.

Thirty-five percent of agencies reported that charitable donations accounted for at least 1 percent of their budget, with the highest percentage being 30 percent. While one percent of a budget may not be large, it should be noted that 1 percent of a $1 million budget is $10,000. The mean number of grants received by agencies was 2.5; the range varied between 0 and 75 grants.

We were interested in determining whether different types of development directors had varying degrees of success in securing foundation grants. Twenty-nine percent of respondents had a development director. The majority of development directors (55 percent) were part-time, followed by full-time (32 percent) and contract development directors (13 percent).

The most important finding of our study was that there were significant differences among the different types of development directors and the success in securing foundation grants. That is, having a full-time development director was significantly different in the amount of grants received from having no development director, a contract development director and a part-time development director. In fact, only a full-time development director was able to secure more foundation grants when compared to no development director, a part-time or contract development director. This finding suggests that agencies that hire a contract development director or a part-time development director don't receive any more foundation grants than agencies that don't hire any type of a development director.

Investing in the Future

To summarize, the study my team and I conducted examined whether full-time, part-time, or contract development directors differed in the success experienced in securing foundation grants. Our data suggest that hiring a full-time development director will yield greater success in receiving foundation grants versus hiring a part-time, contract or no development director. Therefore, it seems that unless park and recreation agencies can commit to hiring a full-time development director it may be in their best interest not to hire any type of development director.

The field of public recreation has been evolving for years, with each decade showcasing new advances made with regards to programming, financing and employee satisfaction. Hiring a development director is simply one more approach that agencies now take to secure financial success. With agencies becoming aware of the wealth in America, there are definite reasons to aggressively solicit private donations with the help of a full-time development director.

Park and recreation administrators need to become aware of the potential that foundation grants (among other forms of philanthropic support) can offer in terms of stabilizing budgetary concerns. Even though creating a new job position isn't the common approach to financial problems, in the case of a development director, it is certainly worth considering. This study indicates that hiring a full-time development director will improve the number of foundation grants a park and recreation agency will receive. As more and more individuals are educated on modes of acquiring philanthropic dollars, it will be imperative that park and recreation agencies hire full-time development directors to be able to stay competitive.

The Foundations of Foundations

There are three main types of foundation-granting organizations: independent foundations, corporate foundations and community foundations. These different types of foundations all have the same purpose, which is to channel private wealth to public causes in a quick, efficient manner. A foundation must file for nonprofit status with the Internal Revenue Service so that donors receive a full tax deduction.

When park and recreation agencies establish a foundation, it's usually a public or community foundation, which can accept donations from individuals in the community and, in return, offer the maximum tax deduction. Foundations vary not only in distinction, but also in size. For instance, the California-based Venture County Foundation has assets of $5 million, while the California Foundation is worth $130 million. The California Foundation has contributed more than $90 million to state parks in California through grants.

Park and recreation agencies can also form a partnership with existing foundations, as is the case with smaller recreation agencies that find it too difficult to create their own foundations, which require financial obligations as well as a board of directors. For example, in 1990, the San Buenaventura Parks and Recreation Department in California formed a partnership with the city's Buenaventura a Foundation, and watched a $60,000 investment grow to $85,000 over a three-year span, an approximate 40-percent increase. Additional reasons that an agency may consider forming a partnership include ensuring credibility in the community and ensuring that proper procedures are followed. Finally, reduced administrative costs convince some agencies to form foundation partnerships rather than create their own foundation.

An advantage of being affiliated with a nonprofit foundation is that individuals are more likely to make a financial contribution to a nonprofit foundation rather than to a government agency. When making a donation to a foundation, the donor also has the option of earmarking her donation. (Earmarking a donation means that a donor can direct a charitable contribution toward a specific recreation program versus simply to the general fund of the parks department.) Foundations offer recreation agencies increased freedom and independence from government as well as guaranteed revenue for new programs.

A Brief History of Fundraising

Making a charitable donation to a park and recreation agency isn't necessarily a new concept. In fact, in St. Louis circa 1944, 7,500 acres of parkland became the first large donation to a recreation agency. At the time of the donation, the land was worth $9 million, but over time has increased in value. What was once a precedent-setting event is now becoming more commonplace. Peoria Park District in Illinois, for example, has 80 percent of its existing 5,800 acres of parkland donated through fundraising efforts.

Foundations rose and fell in popularity throughout the 20th century. The first surge of foundations was in the 1920s, owing to the great mass of personal fortunes that existed. The second boom of foundations was after 1945, when the government offered generous tax incentives to all individuals interested in establishing a foundation or contributing to existing foundations. North America has recently witnessed its third rush of foundations. Between 1985 and 1991, approximately 7,717 new foundations were created.

Tax incentives and a renewed philanthropic spirit among citizens have led to this increase. The funds available to a foundation are usually derived from many donors and held in an endowment that's independently administered. Earned income by the endowment is then used to make grants.

Directing Agency Development

The administrative responsibilities associated with establishing and maintaining a foundation (as well as other fundraising activities) require a great amount of resources on the part of park and recreation agencies. Typically, the job of securing philanthropic dollars has been added to existing job responsibilities. However, it's important to recognize that park and recreation agencies are more successful in soliciting charitable donations when the right individual is responsible for obtaining these dollars. This leads some to believe that assigning the duty of soliciting charitable donations to various employees in the department may not be in the agency's best interest. Therefore, some agencies are creating a development director position.

A development director has the sole responsibility for creating and implementing a fundraising plan to solicit charitable donations. Job responsibilities for a development director include marketing, public relations, grant writing, alumni relations, special events, publications and administration. While a park and recreation agency director may be hesitant to create this new position in his organization, it's often advantageous for agencies to hire a development director, in particular a full-time development director.

Martha Barnes is a Ph.D. student at the University of Waterloo in the Department of Recreation and Leisure Studies. The data used in writing this article was collected for her master's degree, which she completed at Indiana University in Bloomington, Ind.