Hitting it big: what to do after a windfall. (Finance).When the news hit that Poetry magazine, the small but prestigious 90-year old publication of the Modern Poetry Association, was receiving a gift of at least $100 million (and maybe more than $150 million) from a single donor, it shocked the nonprofit sector.
A small organization that was never considered wealthy in the best economies would become financially flush.
The gift, announced at Poetry's 90th anniversary party, along with some initial comments on what the organization might do with the money, led to several scathing articles that called the gift inappropriate and "foolish" and the organization's premature plans "unimaginative."
Numerous articles reported immediately after the announcement of the gift from Ruth Lilly Ruth Lilly (b. August 2, 1915, in Indianapolis, Indiana) is an American philanthropist. She is the sole living heiress to the Eli Lilly pharmaceutical fortune, built by her great-great grandfather, Colonel Eli Lilly (1839–1898). , heir to Eli Lilly's pharmaceutical fortune, indicated Poetry was considering changing its status to be a foundation and would look for a new location and hire money managers. The publication, with a staff of five and budget of about $600,000, has been located in two rooms of the annex of Chicago's Newberry Library Newberry Library: see under Newberry, Walter Loomis. , reportedly rent-free, for the past 15 years.
Poetry might create a library, as well as an institute where it would train teachers of middle- and high-school age poetry students. Another goal might be to publish more books under the Poetry imprimatur, Poetry Press.
Joseph Parisi, editor of Poetry, declined to comment for this article.
Poetry's circumstance may sound unique, but the list of organizations benefiting from enormous gifts that overwhelm o·ver·whelm
tr.v. o·ver·whelmed, o·ver·whelm·ing, o·ver·whelms
1. To surge over and submerge; engulf: waves overwhelming the rocky shoreline.
a. their previous asset bases is growing. Americans For the Arts Americans for the Arts is a nonprofit organization for advancing the arts in the United States. They describe themselves as being dedicated to representing and serving local communities and creating opportunities for every American to participate in and appreciate all forms of the (AFTA AFTA ASEAN Free Trade Area
AFTA ASEAN Free Trade Association (less common)
AFTA Association for Temperate Agroforestry
AFTA Americans for the Arts
AFTA American Family Therapy Association
AFTA Arts for the Aging, Inc. ), based in Washington, D.C., also received an enormous gift through multiple gift vehicles from Lilly, which will be at least $120 million over a 30-year span. And by the end of 2002, three small parishes received unexpected gifts from West Virginia West Virginia, E central state of the United States. It is bordered by Pennsylvania and Maryland (N), Virginia (E and S), and Kentucky and, across the Ohio R., Ohio (W). Facts and Figures
Area, 24,181 sq mi (62,629 sq km). Pop. Power-ball winner Jack Whittaker Jack Whittaker may refer to:
Contribution of a tenth of one's income for religious purposes. The practice of tithing was established in the Hebrew scriptures and was adopted by the Western Christian church. from the $170 pretax pre·tax
Existing before tax deductions: pretax income.
pretax adj [profit] → vor (Abzug der) Steuern millions he won.
While these amounts of money are staggering enough, what to do with such largesse lar·gess also lar·gesse
a. Liberality in bestowing gifts, especially in a lofty or condescending manner.
b. Money or gifts bestowed.
2. Generosity of spirit or attitude. is not always clear cut. AFTA benefited from having planned for the possibility of large gifts, albeit without the expectation of anything like the Lilly gift. "It was lucky for us, but it wasn't by luck," said Bob Lynch Bob Lynch (born 12 July 1958) is a British small press comics artist who produced minicomics during the 1980s and 1990s. His self published work includes the Sav Sadness stories and Behold The Hamster. , executive director. "And, we had a staff structure in place that we had enough ...to handle this type of dialogue. Had that not been in place it would have been much more difficult. ... If it had come in 1985 when I had four staff people, this would be a very different discussion."
When AFTA learned roughly a year before the public announcement that it stood to receive a sizeable gift from Lilly, its board created a committee to determine a way to handle the resources and its ramifications ramifications npl → Auswirkungen pl . Its attorneys and consultants did not recommend that it change its status to be a foundation. AFTA will, however, create an endowment, which Lynch said will likely payout roughly 5 percent annually for the purposes that are eventually determined. The board also created an investment committee as a subset of the finance committee. AFTA is in the midst Adv. 1. in the midst - the middle or central part or point; "in the midst of the forest"; "could he walk out in the midst of his piece?"
midmost of a planning process, which should be complete by this summer. The organization has hired consultants and employed internal mechanisms to get the opinions of thousands of stakeholders Stakeholders
All parties that have an interest, financial or otherwise, in a firm-stockholders, creditors, bondholders, employees, customers, management, the community, and the government. about needs and approaches. "From that we'll shape a plan for the next three to five years," he said.
Jimmie Afford, founder of the Skokie, IIi.-based management consulting Noun 1. management consulting - a service industry that provides advice to those in charge of running a business
service industry - an industry that provides services rather than tangible objects firm The Afford Group, said his advice to an organization in similar circumstances "is for the board and senior management to step back and take a long hard look at mission and vision".
He said that while an organization that has been actively planning strategically might see the scope of its work change, fundamentally its mission and vision should remain intact. "Then, manage the growth accordingly."
Eugene Tempel, executive director of the Indiana University Indiana University, main campus at Bloomington; state supported; coeducational; chartered 1820 as a seminary, opened 1824. It became a college in 1828 and a university in 1838. The medical center (run jointly with Purdue Univ. Center on Philanthropy in Indianapolis, said that, as with all gifts, the first responsibility is to be good stewards of the money. Determine quickly whether the money is to be used for endowment or for operations and whether the gift is so large that it tips the organization into a different type of tax-exempt status. "Even with the endowment, it may be the size of the gift that causes you to really look at what are the current services you provide, "Tempel said.
"When you see these things "These Things" is an EP by She Wants Revenge, released in 2005 by Perfect Kiss, a subsidiary of Geffen Records. Music Video
The music video stars Shirley Manson, lead singer of the band Garbage. Track Listing
1. "These Things [Radio Edit]" - 3:17
2. happening," Tempel said, "it's a wakeup call Wakeup Call is a morning radio program produced in New York City by the WBAI station of the Pacifica Radio Network. The program is hosted by Deepa Fernandes and airs Monday through Friday. for every organization to have a planning process in place so they can respond quickly when major gifts or unexpected gifts happen."
Lynch said that while AFTA's mission will not change, its reach could greatly expand. "It will allow us to expand the portfolio of issues," he said. "For example, we've had a lot of foundation partners in areas of community development. Some related to education. But not really any related to health.... However, we have research that there is a connection between health and art.... If we choose to, we could expand contact to foundations on that issue."
Board leadership and development has been important in AFTA's ability to expand even prior to the Lilly gift, Lynch said. The current board of about 35 includes bankers and lawyers, corporate executives as well as artists and arts executives. "We'd set (the board) up so it had the right kind of people on it," he said. "Officially, no policies have changed with regard to our board. But I think the board nominations, the tone will look at strong governance abilities as the top criterion. (Because of the Lilly gift) it becomes more important for us to have really good governance The terms governance and good governance are increasingly being used in development literature. Governance describes the process of decision-making and the process by which decisions are implemented (or not implemented). than strong fundraising people."
Lynch said the organization's history and evolution has highlighted its ability to leverage the money it's raised. "(Now) I expect to do it more quickly and to leverage partners more quickly," he said. "I think it will allow us, secondly, to focus on the issues and strategies that our board determines are the most important and to be able to carry them out, versus what we've had to do these 40 years to identify the issues and strategies and see if there's money for those."
"I do think that when these things happen it's an occasion to go back and revisit re·vis·it
tr.v. re·vis·it·ed, re·vis·it·ing, re·vis·its
To visit again.
A second or repeated visit.
re the strategic planning Strategic planning is an organization's process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy, including its capital and people. process," Tempel said. "Bring in some consultants and outside advisers, seek input from key constituents, key stakeholders." And determine whether the organization's mission needs to expand.
"It's a time to look at your board," he said. "Are there deficits at the board level that need to be filled or overcome ... Do you have people who know about investments and accounting? ... Is the board prepared to help you, or do you need to bring in (other expertise)?"
After stewardship questions, program questions must be addressed, Tempel said, "assuming there's a planning process in place. If there isn't, one should be put in place immediately. Look at all aspects: facilities, equipment, personnel they have or might need to have."
He continued, "You want to do that immediately. Even if you're not sure (of any decisions) but there's going to be a planning process."
And planning isn't about what fantasies could be accomplished if a billion dollars fell out of the sky. "An organization's planning process should look at meeting the community's needs," he said, "so if a caller said 'I'd like to give you a million dollars, what would you do with it,' you don't reply get back to us in six months after we set up a planning committee planning committee n (in local government) → comité m de planificación ."
Tempel also cautioned against an organization getting too preoccupied with the necessary internal evaluation. "This can also be a very difficult time for organizations," he said. "The typical supporters may think the organization no longer needs money s probably also the case the organization needs a broad base of support, because that's what keeps its contact with constituents."
Lynch took that point even further. "The way we do that is by showing that not only do we still need their money but can make it more effective now than it's ever been," he said. "If the million dollar gift we got to create the ad campaign was able to do what it was able to do with virtually no match, what could it do now with a match? I think we can show funders (public, private, individual, corporate) it can do more. ... People think they're investing in strength."
AFTA accelerated the creation of three other "leadership" structures, forming a "national leadership council" to discuss cultural policy in America, a "president's advisory board" and a "policy roundtable." While the leaders for these groups are in place, the structures are not fully fleshed out, Lynch said. The organization also hired a vice president for leadership advancement, who deals with the groups. "I'm pretty excited about that new structure," Lynch said. "What's interesting about this is we've made it specifically clear that this is not a giveor-get purpose. It's leadership for the cause. That's somewhat of a freeing thing. ... It's an exciting direction. It's pretty unique to us."
Hopefully, such vision won't be.