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Fund-raising: tough times; here's how members can help their favorite charities and foundations keep the coffers filled despite cutbacks in government and corporate giving.

Fundraising for charitable causes has never been easy. But a stagnant economy has made the job of ferreting out donations--large or small--even more of a challenge for monprofit fundraisers. Just ask Stephen Hocker, executive director of the District of Columbia Special Olympics.

"Over the past 18 months, individuals and corporations have found so many ways to say no to nonprofits," laments Hocker, who is the only minority executive director of the Special Olympics in the United States "There's a lot of competition for the dollars. You hear that right away when you walk in to make a presentation."

Nonetheless, professional and volunteer fundraisers have found creative ways to keep the coffers full even when corporations turn tightfisted, government funding becomes scarce and individuals are overwhelmed by charities prospecting for contributions.

Hard times call for enterprise and creativity. For example, in Hocker's case, he took a different tack when marketing his organization's annual Christmas gala, an event highlighted by the auction of 30 designer-decorated trees. Instead of relying solely on individual ticket sales, he promoted "The Night of Trees" to local businesses as a way of either rewarding top salespeople or hosting a ready-made company Christmas party. The strategy worked; the organization sold 15 corporate tables for $30,000 at an event netting $80,000.

"By positioning our event as a way of giving employees a good time at a point in the year when companies usually say thanks, sponsors felt as if they were really getting something back for their money," explains Hocker. Of course, the strategy might not have worked, he admits, if the event didn't already have a nine-year reputation as a holiday crowd-pleaser.

Other ways in which nonprofit organizations are revitalizing their fundraising include:

* Targeting new donor bases, with an emphasis on minorities and small businesses.

* Developing innovative partnership and sponsorship opportunities with corporations.

* Creating and marketing unique special events.

* Establishing endowment, deferred-giving and payroll-deduction programs.

Furthermore, many nonprofits are going back to basics. They are relying heavily on board members for peer-to-peer solicitations, and are conducting extensive research before approaching prospects for major gifts. They are also reevaluating mission statements and making sure all their fundraising efforts relate back to them.


"You can't raise money in a vacuum. It has to be tied to the important needs of your community or service area," says Anita Joseph, director of financial development for the YMCA of the USA, headquartered in Chicago. "Sometimes that means going back to your organization's vision."

"An organization must have a strong message to communicate," adds William H. Gray III, president and CEO of the United Negro College Fund in New York City. "You must be able to explain your cause and what makes it different from other philanthropic causes. You also should have a history of doing good work."

As for new strategies, targeting untapped donors should be at the top of your group's list. The Cleveland Foundation recently formed the African-American Outreach Advisory Committee to evaluate how the foundation could better reach blacks, a largely untapped donor base that represents about half of Cleveland's population.

"For a long time African-Americans were not viewed as persons of high net worth," explains Steven Minter, executive director of the foundation. "But that view is gradually changing. You can see that with new ad and marketing programs geared toward persons of color."

What's also helping to overturn that view are studies that demonstrate the giving patterns of African-Americans. According to the report, "Giving and Volunteering in the United States," 64% of African-American families contributed to charities in 1991. That's up from 26% in 1987. In addition, African-Americans donated a larger share of their income to charities than all U.S. households--2.7% versus 2.2%. Among African-American households with incomes of $40,000 or more, the average amount given to charities was $1,616, according to the report. The study was published by the Washington, D.C.-based Independent Sector, a coalition of over 800 groups supporting nonprofit initiatives.

Nonetheless, "the idea of contributing to foundations and building endowments is a relatively new concept for the African-American community," says Minter, noting that philanthropic giving has been traditionally centered around churches and family members. "For so long we were caught up in surviving," he reflects.

At the United Way of Massachusetts Bay, the emphasis is on getting small businesses to participate in its payroll-deduction program. "The base of brand-name companies is shrinking," says Marian Heard, the Boston-based organization's president and CEO. "The new growth is at small, entrepreneurial companies. So we're creating lists and targeting franchises, travel agencies and cleaning companies, and other mom-and-pop type operations with 25 to 100 employees, or sometimes 100 to 500."

Corporate giving may be flat, but there are still many promising avenues open to nonprofits on the hunt for financial support from businesses. For example, the National Urban League (NUL) recently received a $1.4 million grant from NationsBank to create Mortgage Loan Review Boards in 18 cities served by both organizations. NationsBank is also lending employee expertise to develop the program, train Urban League staff and set up the boards. Any customer whose home-mortgage or home-improvement loan application is denied may automatically appeal the decision to one of the review boards.

"When I joined the Urban League's national board, I did some assessment," says Tony Grant, a senior vice president at NationsBank in Columbia, S.C. "I wanted to find out if my company was involved enough, and if there were ways it could do more."

Bank officials then brainstormed to come up with ways to match the bank's needs with those of the communities the NUL served. The loan review board idea won wide support. "We had mutual constituents and operated in the same markets," explains Grant. "If the communities don't survive, the bank doesn't survive."

In another innovative partnership, Big Brothers/Big Sisters of America received thousands of dollars worth of free advertising and publicity in the in-flight magazine of Northwest Airlines. The airline was looking for ways to support charitable causes but didn't have the dollars to give outright. So it created the "Northwest Air Cares Program."

On a quarterly basis, Northwest teams up with a charitable organization and runs a one-page story on it in three issues of the magazine. It also includes a tear-out, postage-paid envelope for readers to insert donations and request more information. When Big Brothers/Big Sisters was featured in the April, May and June issues of Northwest's magazine, it subsequently received $21,000 in donations and about 700 requests from potential prospects and volunteers.

The Dance Theatre of Harlem got a $50,000 boost when Procter & Gamble featured performers from the dance company in a television advertising campaign for Tide laundry detergent. At the same time the ads ran, the company also set up point-of-purchase displays with 35[cts.] discount coupons at 500 supermarkets in New York State. For every coupon used, the company made a donation (up to $50,000) to the dance company.


When it comes to special events, many nonprofits are going beyond traditional awards banquets, golf tournaments and silent auctions. In five years, the Dimock Community Health Center's "Steppin' Out" has become Boston's premier multicultural event. The black-tie musical extravaganza recreates seven jazz clubs of the '30s and '40s. Each club, sponsored by a local corporation, features a different type of music, from jazz and calypso to reggae, fusion and big band. Last year, the event netted $135,000, and attracted 3,000 people, a multiracial and predominantly senior audience.

Dimock also raised $17,000 through an art exhibit fundraiser called "Paper Prayers." The "prayers" are actually works of art created by area artists to support the Boston Pediatric AIDS Project based at Dimock. In 1992, 14 area galleries displayed 2,000 works of art for three weeks in December.

"People go to the galleries, pick out a prayer and make a donation of any amount they want," explains Jackie Jenkins-Scott, president of Dimock." A gallery owner came to us with the idea. It's based on a Japanese tradition of making a paper prayer for those who are ill, and hanging it on a tree so the wind will carry the get-well wishes."

Dimock has also been successful in raising money through house parties. Last year, Dimock supporters hosted five parties, which eventually brought in nearly $60,000 to the organization.

"House parties go back to the political tradition of inviting candidates to your house to meet the neighbors," says Jenkins-Scott. "We're an inner-city organization. A lot of people in the suburbs don't know about us. Such parties don't necessarily bring in a lot of money, but they generate interest and don't really cost much to put on."

In an offshoot of this approach, a longtime supporter of the Boys Choir of Harlem recently threw herself a 50th birthday party and asked her guests to donate to the choir in lieu of gifts. The event garnered $7,000 for the choir and the Boys Choir is looking for similar opportunities.


Endowments and deferred-giving programs aren't exactly new fundraising tools for community foundations and academic institutions, but they are for many social-service and some arts organizations. In fact, the YMCA recently developed extensive training materials on how to implement endowment programs and held four training seminars on the subject. The goal is to have endowments at all YMCAs by the year 2000.

"Many of our Ys already have endowments, but others don't," notes YMCA's Anita Joseph. "Endowments provide the interest-earning capital you can count on forever."

With long-term stability in mind, the Boys Choir of Harlem is examining deferred-giving programs more closely. "We're working on some living trusts now," says Horace Turnbull, general manager. "One of them will have a cash flow of about $33 million, of which $1 million would go to us."

The National Black United Fund Inc. will soon roll out a deferred-giving program, whereby the fund can be named as both the owner and beneficiary of an individual supporter's life insurance plan. In this case, the donor's premiums become tax-deductible contributions.

Although churches have had such programs in place for years, "it's a new idea to us," declares William Merritt, president and CEO of the Newark, N.J.-based United Fund. "The amount a person contributes is a cash asset to us while they are living. When they die, we get the payout."

For other organizations, getting involved with United Fund or United Way payroll-deduction programs is an effective way to get donations flowing. The National Hook-Up of Black Women Inc. signed on as a United Fund member last year for a fee of $2,500. As a result, the political group received $108,000 in pledges and used it to open an office in Washington, D.C., according to board member F. Gail Reed, a director of development at the College of Medicine at Howard University.

Finally, one simple, yet often overlooked, fundraising tip: Say thanks to donors and tell them about your organization's successes.

"With competition for contributions so heavy, you have to do your homework, be clear about what you're asking for, and deliver," advises Dimock's Jenkins-Scott. "Once you get the money, say thanks and follow up. Tell people how successful the project was. Ask them to come out for a visit. Even if they are too busy to come, they'll remember that you asked."

If you're new to fundraising, or just looking for ideas, here are some books worth reading.

* Successful Fundraising, A Complete Handbook for Volunteers and Professionals, by Joan Flanagan; Contemporary Books, Chicago; $12.95.

* The Grass Roots Fundraising Book: How to Raise Money In Your Community, by Joan Flanagan; Contemporary Books, Chicago; $16.50.

* Fundraising, Hands-on Tactics for Nonprofit Groups, by L. Peter Edles; McGraw-Hill, New York; $16.95.

* The NonProfit Times, 190 Tamarack Circle, Skillman, NJ 08558, 609-921-1251; $59 subscription; qualified nonprofit managers (with annual gross revenues over $500,000) get it free in the U.S.


Before Denise Lamaute, a principal and investment banker at Lamaute Financial Group, agreed to join the board of A Community of Friends in Los Angeles, she posed an important question: "Do you have liability insurance for your directors and officers?" When she was told no, she delayed joining until the group purchased such a policy.

Although lawsuits against nonprofits are rare, any organization and its board is vulnerable. Directors-and-officers liability insurance indemnifies board members of nonprofit organizations for damages and defense costs that can arise from these lawsuits.

According to Terry Tumang, an account executive for LFC Insurance Brokers and Agents in Beverly Hills, claims can be filed on any number of grounds, including:

* wrongful employee termination

* discriminatory practices

* mismanagement of funds

* conflict of interest

* misstatement of financial condition

* irregular attendance at board meetings

* actions beyond granted authority

* misleading statements

* unwarranted salaries.

"Those who are considering joining a board or allowing themselves to be elected to a board, should take a look at the organization's insurance policies and see what the limits are," advises Janis P. Farrell, a partner at the law firm of Barnes, McGhee, Neal, Poston & Segue in New York City. "Find out what lawsuits, if any, have been brought against the corporation and/or board members."

"You should also know the background of other board members," she continues. "You want some comfort that they are not likely to act in ways to jeopardize the corporation or you."

Generally speaking, though, the law tends to protect volunteer board members as long as they are acting in good faith and using sound business judgment. Starting prices for directors-and-officers insurance are in the $1,000-$1,500 range, but can go much higher depending on the size of the organization and its risks and exposures.

For more information, contact the American Society of Association Executives at (202) 626-2836 or (800) 453-5191.


Asking for donations isn't the only tough assignment facing the board members of nonprofit organizations. Watchdogging the bottom line is an equally demanding chore.

"Our board is very involved in financial management," says ABC Sports commentator and former Pittsburgh Steeler Lynn Swann, national president of the board of directors at Big Brothers/Big Sisters of America. "We don't want dollars and cents thrown away. More nonprofits have to be financially responsible. The dollars are too hard to come by."

Monthly budget reports highlighting the key areas of spending are prepared for the board of directors to review. If one area seems to be getting out of line, board members can discuss ways to get costs under control early on.

"It's also important that your bookkeeping system doesn't mix dollars," advises Swann. "If you get $50,000 for a drug and alcohol program, you must spend $50,000 on a drug and alcohol program. You can't spend $40,000 and then slide $10,000 into another project. If it turns out a program costs less, show the surplus and let the person who gave the grant decide what to do with it."

In-kind contributions and staff trimming also help nonprofits be fiscally prudent. The United Negro College Fund (UNCF) cut operating costs by 10% in the last two years, in part by reducing personnel (through attrition and combining jobs), closing a few field offices and donating office space.

"We had 31 offices across the country," explains UNCF president and CEO William H. Gray Ill. "We reduced it to 25 by closing offices and using existing offices to serve adjacent areas. We also asked for in-kind contributions of office space. Now, 65% of our field office space is donated."

The Dance Theatre of Harlem (DTH) has also had success asking for in-kind contributions on everything from printing services for its many brochures, tickets and flyers, to videotapes for recording rehearsals, performances and sales presentations. DTH also keeps dance production costs down by borrowing or swapping sets and costumes from other theater groups.

The world-famous dance company carefully watches its budget. "We have a very austere, bare-bones budget," explains Sandi Robertson, director of development. "We only add projects to the budget when those projects pay for themselves or make money. That may sound simple, but it's not necessarily true for all organizations."
COPYRIGHT 1993 Earl G. Graves Publishing Co., Inc.
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Title Annotation:includes related articles on liability insurance for directors and budgeting
Author:Markarian, Margie
Publication:Black Enterprise
Date:Dec 1, 1993
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