Printer Friendly

Philanthropy: a capital idea.

One of the biggest dilemmas facing those who serve older adults is access to capital to meet an ever-growing demand for services. This demand will intensify as the U.S. population ages and lives longer.

All demographic studies point to the need for facilities within continuing care communities that offer a spectrum of programs and services that parallel an older adult's life cycle.

Regardless of a person or couple's circumstances, residents deserve affordable, attractive, state-of-the-art quality care. The ability of an organization to access capital to continually update facilities to meet this need, while remaining affordable, is at the heart of a growing challenge.

For-profit entities meet their capital needs either by incurring debt or through equity markets, with a parallel obligation for a financial return to investors.

Nonprofit organizations meet their needs through debt and/or philanthropic efforts, such as capital campaigns.

Mission-driven nonprofit organizations appear to have a unique opportunity to leverage capital resources through philanthropy to provide affordable services. Yet, looking at the growth of long term care facilities over the past 20 to 30 years, most expansion for nonprofit organizations took place through debt rather than through philanthropy.

As board members and administrators of long term care facilities plan for the future, their ability to attract philanthropic support dramatically increases the opportunity to expand facilities and enhance the quality of services without dramatically increasing debt and subsequently increasing fees to service that debt.

When leaders of mission-driven, nonprofit long term care facilities make the decision to seek philanthropic support as a part of their funding strategies, they should avail themselves of practices that have proven to be successful.

Certain attributes must be in place in order for nonprofit organizations to maximize their unique opportunity in seeking philanthropic support to meet their capital needs. Foremost among those attributes are the following:

1.) A unifying and aspirational vision

Do key stakeholders (i.e. residents, extended families of residents, board members, staff leadership, etc.) share a common vision for the organization? To what degree is philanthropic investment critical to realizing this vision? How will the organization and the community be impacted by the accomplishment of its vision?

2.) A strategic plan that clearly articulates the future of the organization

Does the organization's strategic plan define its options, the rationale for its choices, and the financial requirements to be sound and sustainable in its service delivery? How important is philanthropy to the execution of its five-year business plan?

3.) Synergy among board members and staff

If the primary responsibility of an organization's board is to plan and manage the future of the organization, are the board and administrative leadership in agreement regarding the future? Is there sufficient commitment among board and administrative leadership to bring about change to fulfill vision and the strategic plan? Are board and staff members willing to take time to learn and develop the necessary skills to be successful philanthropically?

4.) An ability to articulate the impact of philanthropic investment

Is there a clearly articulated case for support that will compel donors to action? Why should someone give to the organization? What are its unique selling propositions?

5.) The alignment of infrastructure and staff resources to support philanthropic initiatives

Is the organization willing to invest the resources to assure that its philanthropic initiative is managed over time? Is the organization willing to commit to such infrastructure investments as: staff recruitment and training; relational database management; communications and marketing materials; the engagement of professional counsel--all common expenses to support a philanthropic initiative?

Successful philanthropic programs target and build upon a logical constituency base reflecting the mission, services and benefits provided by the organization.

Primary constituents are those benefiting directly from the organization's services--in the case of long term care facilities, residents and their families. Secondary constituents are others with a direct relationship to the organization, including current and past donors, employees, board members, vendors and if related, faith-based organizations. Tertiary constituents are concerned with the broader quality of life for older adults.

Upon undertaking a capital campaign, it is important for an organization to evaluate where the most likely support may come from based upon capacity and predisposition to give. Creating an effective philanthropic value proposition may vary among constituency groups. It is critical for success that effective messages be developed, targeted to specific constituents.

When building a philanthropic program, engaging volunteers who reflect constituency groups, developing key messages that market and communicate needs, and the actual solicitation process are vital elements of success.

Managing the execution of these elements over time is the cornerstone from which successful philanthropic programs are established. Major gift solicitation techniques evolve from the successful marketing of the organization's needs.

The United States is one of the world's most generous countries. Throughout our history, individuals, through tax-exempt organizations, have met community needs, which are continually evolving, reflecting our changing society.

Last year $240 billion was given for charitable causes. Of that amount, 8.7 percent was given for health care and 7.8 percent was given to meet human service needs, which includes services for older adults.

There is an awareness among individuals, corporations and foundations of the needs of our aging population. Increasingly, they are looking at supporting services for older adults--services that many long term care facilities have a strong history of providing. As a result, many facilities are building successful philanthropic campaigns, supporting both capital and programmatic needs.

Jimmie R. Alford, CFRE, is founder and chair of The Alford Group Inc., Evanston, Ill., a national consulting firm to the nonprofit sector He may be reached at jalford@alford.com or (800) 291-8913 ext. 141. The firm's Web site is www.alford.com.
COPYRIGHT 2004 Non Profit Times Publishing Group
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2004, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

 
Article Details
Printer friendly Cite/link Email Feedback
Title Annotation:Finance
Author:Alford, Jimmie R.
Publication:Contemporary Long Term Care
Geographic Code:1USA
Date:Sep 1, 2004
Words:943
Previous Article:Get more from your web site.
Next Article:Alzheimer's disease predicted to increase 600 percent among Hispanics.
Topics:


Related Articles
Organizations Back National Effort to Teach Students About Nonprofit Sector.
Online Ethics.
Study: Solicit High-Tech Donors Very Differently.
Going South.
Flash philanthropy: Donors expect fast results, too. (Streetsmart Nonprofit Manager).
Funding with interest: It's prime time for lead trusts. (Asset Allocation).
Preparing for change: grantmakers looking for effectiveness. (New Ideas).
Evolving vision: Jewish philanthropy in flux. (Asset Allocation).
Merger mania? National, regional groups continue negotiations to join forces.
Calendar.

Terms of use | Privacy policy | Copyright © 2018 Farlex, Inc. | Feedback | For webmasters