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Squeeze Play
Incredible disappearing corporate base forces area non-profits to find creative new ways to raise money
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Business New Haven
5/14/2001
By: Priscilla Searles
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Most if not all area non-profit organizations are faced with trying to survive financially in a shrinking corporate environment. No longer able to rely on large-block corporate gifts, many are forced to develop new fundraising methods. For four New Haven-based organizations, finding new approaches to fundraising has been literally a matter of life and death.
Sandra Koorejian, executive director of Domestic Violence Services of Greater New Haven (DVS), joined the organization in 1987 when its annual budget was approximately $400,000. Services that have increased dramatically and a staff that has almost doubled in size have pushed the annual budget close to $700,000.
“Sixty-seven percent of our income comes from state and federal sources,” explains Koorejian. “United Way and similar organizations provide 11 percent, municipalities plus community development block grants account for five percent, foundations fees and miscellaneous grants eight percent and special events, appeals and donations nine percent.
“Although a few corporations make donations,” she adds, “most come from individuals, clubs, churches, synagogues, honoraria, memorial donations and court-ordered contributions.”
Court-ordered? “A court ordered contribution might be the result of someone convicted of a crime and fined,” explains Koorejian. “The money received by the court can be directed to a non-profit organization at the descretion of the court. However, this practice is currently being examined so we can only hope that the funds will remain available.”
How have DVS's fundraising methods evolved? “We are getting a lot more state and federal dollars due to program expansion, mainly in the courts. This probably accounts for most of the additional funds. In addition, the Violence Against Women Act, enacted by the Clinton administration in 1995, added dollars to both court and non-court services,” says Korejian.
Leadership, Education & Athletics in Partnership (LEAP) receives 20 percent of its operating budget from federal funding from sources such as AmeriCorps, a national service program enacted during the Clinton administration, and the federal Department of Education's Community Technology Centers Program.
“We receive 20 percent of our budget from the state's Office of Policy & Management,” says Brad Williams, LEAP's executive director. “The remaining 55 percent comes from private foundations and individuals, including national and local foundations.”
Hart Caparulo, president of the United Way of Greater New Haven, points out that New Haven was never a corporate mecca. Acquisitions and mergers since the late 1980s have made support from large corporations even more scarce.
“We don't have local decision-makers any more,” says Caparulo. “Those [funding] decisions are made in corporate headquarters located in other areas - many out of state.” In addition, much of New Haven's remaining “corporate” sector is actually non-profit (Yale University) or regulated (the major hospitals).
Koorejian saw an obvious potential source of income when she realized that the municipalities to which DVS was providing services were not supporting DVS financially. “I had to approach all of them,” she says. “But we were receiving support from the New Haven Foundation.”
Koorejian has to renew her plea for support annually, but each town now makes an annual contribution of some kind. “We need to demonstrate to the towns we cover that the problem continues to exist and that DVS continues to be in the best position to address that problem [of domestic violence].”
Arts organizations face different challenges. Founded in 1862, the New Haven Colony Historical Society is working hard to develop a new, modern image. “We're trying to become more inclusive,” says Peter Thomas Lamothe, executive director.
“For example, we've begun a 12-month ad campaign in the Arts Council newsletter aiming at people who are not familiar with the Historical Society and pointing to its new directions. The Historical Society is positioning itself as a new public facility for the city of New Haven, a place where anyone can come, where people can feel comfortable, safe, where they are welcome, where they can try new things and can keep coming back.”
Every non-profit organization thinks of grants when it comes to putting its annual budget together, but these are a very iffy proposition.
“Grants are renewable annually and there's no promise or assurance that any of the grants will be renewed - that's in the contract language, “ says Koorejiann.
“Some national grants will give you funds for two or three years, then its either over or you reapply,” adds Williams. “It's important to have a three-year strategic funding plan so you're always thinking ahead and still have funds for current programming.”
The United Way is a prime example of a success story that resulted in looking carefully at fundraising methods and taking a new direction.
“We've been focused for the last five years and made goals every year since - but hadn't for the previous nine years,” explains Caparulo.
The United Way has focused on individual “leadership” gifts of a $1,000 or more. “These gifts have grown in five years from $300,000 to $1.5 million,” says Caparulo. The $1.5 million represents 30 percent of dollars raised. In 2000 the United Way raised a total of $5.3 million.
“We're putting more emphasis on appealing directly to individuals. They may or may not be part of a large corporation or they may be part of a small company. Our whole target market are individuals who are civic-minded and who give $500 or more to charity annually,” says Caparulo.
Like officials at all non-profits, Caparulo characterizes a donation to the United Way as an investment in the community.
“We add knowledge to the giving,” she says, “and place dollars in the community where dollars will get the job done.”
With an annual budget of approximately $400,000 the NHCHS views its endowment as a security blanket but doesn't want to get too comforable about it. “Our goal is to have the lowest possible spending rule on our endowment,” says Lamothe. “Future corporate and foundation support will enable us to do that.”
A healthily portion of the historical society's budget comes from contributions from members of the board of directors, members, an annual appeal and membership dues. “We now have ongoing corporate support for our educational programs thanks to Fleet and People's Banks,” says Lamothe.
The group's annual “Seal of the City” awards event honoring a citizen who has made a major contribution to the betterment of the community is the NHCHS' biggest fundraiser.
“This event has increasing importance, not only to the budget,” says Lamothe, “but to the people of the city - the people we honor and the citizens. In 2000 we raised $100,000 at that event and we are using the money to fund a full-time director of education.”
But funders increasing want accountability, too. “Funding agencies are much more involved in programs and exhibit outcomes now,” says Lamothe. “Who does it service? What new audience is being served?
“Successful programming and successful exhibits will always receive funding,” he adds. “There's a finite source of funding now. It's more important that the program and exhibit serve a broad audience. That's how we develop our programs now, to involve everyone.
“The historical society cannot do what it has always done,” Lamothe says. “We have to reinvent ourselves so we can offer more programs and new exhibits for our community.”
As for the future, Lamothe says his group will seek additional support from the National Endowment for the Arts and the Pew Charitable Trusts, a major supporter of the arts.
“We don't receive charity; we receive investments,” he says. “And investments in the historical society are investments in the community. That's why when planning exhibits we have a public responsibility and commitment to the community.”
Technology has also changed fundraising. Computers, the Internet, Web sites are here to stay and smart organizations are discovering how to use new technology to boost support.
The United Way, for example, is in the process of launching a new Web site to share information and knowledge with individuals and organizations. It's a more personal approach for dispensing information and gaining financial support.
Caparulo points out that, in the past United Way didn't know the contributing individuals from corporations; the moneys were simply given in a block by the companies. It was up to the company to encourage employees to commit to a donation, often in the form of a stated amount taken out of the employee's paycheck weekly.
All organizations recognize the value of individual gifts and each targets the people that can write out the checks, of course. But more often than not, all non profits are trying to appeal to the same people.
For LEAP, “We target more individuals because we are in more locations,” explains Williams. “We're looking for potential partnerships and it isn't just financial support.”
LEAP continues to receive donations from local corporations and banks but, as Williams explains, “Our fundraising strategies have changed in that we are serving a broader community and also see the potential for national replication [of the LEAP model].
“Fundraising efforts require a strong local base, but ultimately funds will be generated by large national funds,” Williams says. “Because LEAP is considered to be an innovative educational model as well as a workforce and training ground for young people, grants are available that are not possible for organizations without that educational mission.
Williams also notes that many non-profits are looking for money-generating ventures, small businesses with the profits to be reinvested into the parent organization. LEAP is exploring the possibility of teaching students how to produce greeting cards.
“This approach is directly in line with our mission to teach business principles and at the same time generate income that would go back supporting LEAP's programs,” says Williams.
The challenge of raising funds in the future isn't going to get any easier. “Every year 25,000 new 501©3 [non-profit corporations] are created nationally, and they come in competing for the same dollars base,” says Caparulo.
Perhaps Koorejian describes the fundraining challenge best with DVS' approach to staying financially secure. “Fundraising is like shifting sands. You can't get too comfortable with any one source of funds. You always need to be prepared to take another road.”
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