Non-profits get creative

November 6, 2011

In a YouTube video clip, a middle-aged man with brown hair demonstrates how he can recline on his sofa watching a baseball game and at the same time participate in an upcoming charity walk to raise funds for N Street Village, a women’s homeless shelter.

He’s virtual walking, he explains.

It’s a mechanism that mortgage giant Fannie Mae created last year for its annual Help the Homeless walk that allows supporters to contribute funds as a “walker” online, without really breaking a sweat. Last year’s walk raised $6.5 million for 118 nonprofits in the region — $300,000 of which went to N Street Village.

Nonprofits have had to become ever more creative as the economic slowdown lingers — and their work is only just beginning. Two of the region’s largest philanthropic organizations, Fannie Mae and Freddie Mac, announced plans to phase out their charitable giving. Corporations are becoming much more selective in their philanthropy. And foundation budgets remain largely stagnant — they are handing out fewer grants — amid fears of continued budget cuts from the federal government.

As a result, Washington area charities are scrambling for new ways to raise money.


Sister Ada of the Little Workers of Sacred Hearts in Riverdale loads up food from the Capital Area Food Bank in the District. (Jeffrey MacMillan/For Capital Business)

For instance, Columbia-based Ulman Cancer Fund for Young Adults has narrowed its operation from national to local to capi­tal­ize on the growing trend of corporations shifting their giving to causes in their own backyards. To reach a new donor pool, Capital Partners for Education in the District expanded its mission from working with private schools exclusively to include working with charter schools, which are popular in the city. Capital Area Food Bank in Northeast Washington, which experienced a 20 percent drop in corporate giving, is aggressively pursuing individual gifts, particularly large ones.

And N Street Village, in Northwest, is preparing for Fannie Mae’s possible pullout from the walk by making plans to run its own version next year. Part of those preparations involve using YouTube and other social media to recruit participants and build a database of names to stay in touch with.

“We’re trying to be as creative as we can to increase the number of walkers,” said Stuart Allen, N Street Village’s associate director of development. By reaching out now, “it won’t feel that shocking for people who have already supported us through virtual walking.”

A recent survey by the Center for Nonprofit Advancement illustrates the financial turmoil roiling Washington area charities: More than half that responded are seeing demand rise for their services, with nearly half of those grappling with a 10 to 50 percent drop in revenue. Nearly 60 percent said they have responded to the funding gaps by cutting salaries or staff.

Many were forced to either shut down, suspend operations, shrink, merge or restructure just to break even.

This week local nonprofits are signing up for an online 24-hour fundraising event, Give to the Max — hosted by fundraising site Razoo— that will call on the region to give to area charities.

“Nonprofits are now continuing to develop new strategies to deal with the new reality,” said Glen O’Gilvie, chief executive of the Center for Nonprofit Advancement.

Narrowing the focus

When the economy faltered in 2008, officials at Ulman Cancer Fund for Young Adults in Columbia saw donations from corporations and individuals plummet. As a result, revenue dropped to $500,000 from $1 million.

The organization, which supports young adults living with cancer, laid off three of its seven full-time employees and ran an operating deficit of $40,000. Officials decided to shift from a national to a regional scope in an attempt to make the charity more attractive to corporations with tighter budgets that want to only give locally.

“They wanted to see their dollars impact the communities where they live,” said Brock Yetso, Ulman’s executive director. He turned national scholarships into local scholarships and shifted national patient outreach programs to local hospitals and cancer centers.

That attracted the support of corporate donors such as Kaiser Permanente, which since last year has given a total of $125,000; a local car dealership, which gave $20,000; and a local waste company, which contributed $25,000. Those donations helped put the organization on a more solid financial footing — revenue has increased to $900,000 and its full-time staff has grown to 10.

Shifting gears was important, too, for Capital Partners for Education, a college preparation organization that is sustained mainly through wealthy individuals and foundations.

The District-based group previously worked exclusively with private schools. But when private schools cut their budgets for scholarships, forcing the nonprofit to supplement costs, officials decided to expand programming to tuition-free, high-performing charter schools.

“It also opened us up to a new pool of funders who might not have otherwise been interested in us,” said Khari Brown, the group’s executive director. “A lot of the conversation in Washington has been around public school reform and charter schools, and we had to adapt to what philanthropy was doing.”

Shift to individual givers

Reductions in corporate and government funding have nonprofits looking to make up the difference from another source of revenue: individual donors.

Last year, the YWCA of the National Capital Region established “giving societies” that encourage individuals to commit to multi-year financial contributions. YWCA officials also created walking tours and luncheons to meet prospective donors, all in hope of closing a $1.5 million hole in its budget, which led to the layoff of three full-time employes, salary and hiring freezes and program cuts.

“Individual giving is the cash cow for many nonprofits,” said Patricia Pasqual, director of the local chapter of the Foundation Center.

A $1 million budget gap forced Capital Area Food Bank for the first time to charge food pantries for fruits and vegetables — until William E. Conway Jr., co-founder of Washington private equity firm Carlyle Group, came to the rescue with a $5 million grant. The late sports entrepreneur Abe Pollin and Washington Post Co. Chairman Donald E. Graham also stepped in.

That prompted the food bank this year to create a major gifts division, which aims to increase the amounts of individual donors and acquire wealthy donors.

“What’s going to be important is to see the philanthropy coming from high net worth families,” said Chuck Bean, executive director of the Nonprofit Roundtable of Greater Washington.

Vanessa Small covers philanthropy and nonprofits for Capital Business. She also spotlights newly appointed executives in the New at the Top column, which chronicles their journeys to the top. Small was raised in Orange County, Ca. and graduated from Howard University.
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