Pubdate: Thu, 03 Feb 2005
Source: Chronicle of Philanthropy (US)
Copyright: 2005 The Chronicle of Philanthropy
Contact:  http://philanthropy.com/
Details: http://www.mapinc.org/media/3680
Author: Holly Hall
Note: Nicole Lewis and Suzanne Perry contributed to this article.
Cited: Drug Policy Alliance http://www.drugpolicy.org
Bookmark: http://www.mapinc.org/find?214 (Drug Policy Alliance)

Challenging Times Ahead

FUND RAISERS STRAIN TO CAPTURE ATTENTION OF DONORS

In Grand Rapids, Mich., where the average high temperature at this time of 
year hovers just above freezing, the local Salvation Army is relying on 
donors to give generously so it can help needy people pay heat and utility 
bills.

But DeWayne Duskin, the group's director of development, worries that he 
could have trouble raising enough money to meet the demand for help, 
especially because so many donors have been opening their wallets for 
efforts to help the tsunami victims in South Asia.

"I hope we don't run into a dry spell like we did with 9/11," he says. 
"Fund raising took a dip for three or four months and went real flat. We 
cannot afford that at the front of the calendar year."

Across the country, many other fund raisers are struggling to find creative 
ways to capture the attention of donors and experimenting with new 
approaches to soliciting gifts. As charities map out their fund-raising 
approaches for 2005, many are redoubling efforts to solicit gifts from 
affluent people rather than putting more energy into mass solicitations, 
such as mailings and telemarketing, and are looking for new ways to attract 
money from corporations.

Fund raisers at domestic charities say it is not just the spotlight on the 
tsunamis that's making it harder to win contributions. With Americans 
focused on topics like the war in Iraq, the debate over Social Security, 
and the ups and downs of the stock market, donors seem to be paying less 
attention to causes like the environment.

Garnering attention from donors is likely to become ever more challenging 
in the months ahead, as more and more nonprofit groups step up 
solicitations to individuals, foundations, and corporations -- often in an 
attempt to make up for cuts in government aid.

Cautious Approach

The bleak outlook for 2005 comes after a year in which many charities 
struggled to raise enough money to keep pace with inflation, which was 3.3 
percent in 2004.

Even though other organizations saw strong increases in donations last 
year, many say they are not overly optimistic about the fund-raising climate.

"The market is still volatile, and we are being careful rather than 
optimistic," says Jon Gossett, senior vice president for development at 
Minnesota Public Radio, in St. Paul, where a new effort to win big 
contributions from affluent donors helped push donations to $31.6-million 
last year, up from $27.7-million in 2003.

While many of the fund raisers at more than 50 organizations interviewed by 
The Chronicle in the past month said they expected 2005 to be a year of 
continued struggles, a new survey has found that fund raisers are more 
optimistic about giving than they were a year ago.

In a semiannual survey of more than 200 fund raisers nationwide released by 
the Association of Fundraising Professionals in December, 88 percent of 
respondents said they were optimistic about their ability to raise money in 
the current economy, up from 75 percent one year earlier. It was the 
highest level of confidence reported since 2001.

Election Aftermath

For many nonprofit groups, the reverberations of the 2004 elections 
continue to affect their finances.

Some groups hope that in 2005 they can make up money they believe they lost 
because donors were giving to political causes rather than to charitable ones.

At Covenant House, which operates shelters for runaways in Los Angeles, New 
York, and other cities, officials say the election was at least partly 
responsible for a 12-percent decline in direct-mail returns, which make up 
about 70 percent of the charity's $120-million budget. "The election sucked 
out some contributions," says James Harnett, the group's chief operating 
officer.

Other charities may still be experiencing cash-flow problems because of 
sluggish direct-mail returns. Political candidates and advocacy groups sent 
out so many mailings last year that the postal system couldn't keep up, 
says Ray Grace, chairman of Creative Direct Response, a Crofton, Md., 
company that handles direct mail for nearly 20 large charities. "We saw 
pieces that normally turn around in 7 to 10 days take a month or five 
weeks," he says.

But for many advocacy groups, the election year was a fund-raising bonanza. 
Groups that are concerned with some of the most divisive and prominent 
social issues, such as gay marriage and abortion, say they raised a lot of 
money from donors who wanted to influence the election or its aftermath.

Focus on the Family, a Christian advocacy group in Colorado Springs that 
promotes traditional family values, raised $146-million, a 13-percent 
increase over 2003.

Mark Buzzetta, the group's chief financial officer, said 7 percent of the 
rise came from contributions to the organization's new lobbying arm, which 
promotes President Bush's call for a constitutional amendment to restrict 
marriage to heterosexual couples.

But this year, Mr. Buzzetta says he doubts that donations will increase by 
as much as they did in 2004, especially now that the election is over. 
"We're not anticipating another 13-percent growth year," says Mr. Buzzetta. 
"This was unique."

At Planned Parenthood affiliates, fund raisers say that donations flowed in 
fast after the election. Many donors, they say, are concerned that the Bush 
administration will push for new limits on abortion, birth control, and sex 
education, and they don't expect contributions to taper off, because donors 
support the charity's efforts to oppose such restrictions.

"We saw a definite postelection bounce among our supporters," says Bryan 
Howard, president of Planned Parenthood of Central and Northern Arizona, in 
Phoenix, which raises about $1.3-million from donors each year.

Mr. Howard says that total contributions for December, immediately 
following the election, were 20 percent higher than projected, with 
direct-mail returns alone generating 30 percent more than expected. "Our 
supporters are very familiar with the policies of the first Bush term," Mr. 
Howard says. "The re-election caused supporters to sit up and take note 
that challenges we faced over the past four years will become that much 
stronger."

Out of the Spotlight

Donors have not rushed to give to all types of advocacy groups, however, 
and charities working on issues that are not hot topics of debate among 
politicians and pundits are seeking new and better ways to raise money.

At the Drug Policy Alliance, in New York, Clovis Thorn, director of 
development, says many of his donors do not see his organization's issues 
as a high priority these days. The alliance wants to promote 
needle-exchange programs to help drug users avoid disease, legalize 
marijuana use for medical purposes, and seek ways to help drug addicts get 
treatment.

"So many donors are turning their attention elsewhere," Mr. Thorn says. "A 
lot of our major donors are staying committed to political issues, and 
we're being moved down to tier two."

His charity raised $7-million last year, about the same as in 2003. To 
increase donations in 2005, Mr. Thorn says, the alliance "is going to have 
to work harder to convince donors and the public that drug reforms are needed."

He says that the group hopes to persuade the public and policy makers that 
taking a different approach to drug offenses could save considerable 
amounts of money at a time when the growing federal budget deficit is 
prompting many lawmakers to look for ways to slash spending.

"Offering treatment for drug offenders rather than incarceration could save 
hundreds of millions of dollars," he says. "Our challenge is to demonstrate 
that."

Environmental groups say they also are straining to get donor attention.

"There has been a reordering of priorities, and the environment is not as 
pressing an issue as it used to be," says Kalman Stein, chief executive 
officer of Earth Share, which last year raised a total of $13.4-million for 
500 environmental groups through on-the-job drives. In the organization's 
most recently completed campaign, Mr. Stein estimates that Earth Share will 
raise enough to keep up with inflation.

Appeals From Volunteers

With fund raising growing more competitive, charities of all kinds are 
lavishing attention on individuals who have the potential to make 
significant gifts -- especially after such efforts paid off handsomely last 
year.

Big Brothers Big Sisters Southeastern Pennsylvania, in Philadelphia, raised 
$1.1-million in donations and pledges at a spring breakfast gathering. That 
event, plus a similar one in December that raised $312,000, helped the 
charity raise 40 percent more last year than it did in 2003.

The spring breakfast featured a youth choir and testimonials from both a 
Big Sister volunteer and the 16-year-old she helps. The event worked 
because board members invited friends and colleagues to the breakfast who 
were greatly impressed with the program, says Linda Jacobsen, the group's 
fund raiser. "We let the people whose lives have been changed by this work 
do the talking." Sixty percent of the nearly 250 people who attended, she 
notes, made a gift to the charity, many for the first time.

Other charities are getting more aggressive in asking wealthy people to 
donate land or stock in privately held businesses. World Vision, the 
international relief organization, received $12.2-million in such gifts 
last year, triple the amount it received in 2003. Although that is a small 
part of the organization's donations -- it estimated that it raised 
$800-million last year -- the organization believes such donations can 
become a strong part of its fund-raising effort in the future.

Real-estate gifts are attractive to many people. Property values have 
soared in recent years, and donating land to charity allows contributors to 
escape capital-gains taxes they would have to pay if they sold it.

World Vision only recently started going after stock in certain types of 
privately held companies, after Congress passed a law in 1998 that made it 
easier for stockholders in many private companies to donate their shares. 
Before that, stock in S corporations, a tax status used by many family-held 
businesses, could not be donated to charity.

"A lot of these family-owned businesses have been doing very, very well, in 
contradiction to the stock market," says Dan Rice, World Vision's national 
director of planned giving. "Ninety percent of all businesses are privately 
held; half of those are S corporations. We're getting these gifts because 
we're asking for them, and you get what you ask for. If you went all the 
way through 2004 and did not get real estate or closely held stock, you 
left something on the table."

Corporate Support

Many charities are turning to companies for help in reaching both new 
clients and new donors.

In Nebraska, Father Flanagan's Girls and Boys Town has formed an agreement 
with Godfather's Pizza, the national chain that has its headquarters in 
Omaha. The deal is the first corporate-charity agreement for both 
organizations.

Godfather's is printing the Boys Town logo and hotline number for children 
on more than 18 million of the boxes it uses to deliver pizzas and is 
mentioning the charity in its national advertising. In addition, the 
company says it will devise ways for its 600 local stores to raise money 
for the charity.

William Swindell, national director of development for Boys Town, estimates 
that the charity will realize $1.5-million per year from the Godfather's 
deal. "We'll be able to serve more kids as a result," he says.

Cardboard Fund Raisers

The Salvation Army, which received a major setback last year when Target 
stores said the charity could no longer hold its traditional red-kettle 
holiday drive on its premises, has also been developing new ways to work 
with companies.

While the charity figured it might be wise to solicit customers at small 
stores, it didn't have enough people to stand alongside the kettles. During 
the 2004 holiday season, the charity's fund raisers decided that one way 
around the problem was to use life-size cardboard figures as stand-ins for 
the charity's workers.

Two versions of the cardboard figures -- a man and a woman, both wearing 
Salvation Army uniforms and broad smiles -- were placed beside kettles in 
200 bookstores and sporting-goods stores. Each figure was rigged with a 
motion detector so that when a customer walked by, the cardboard figure's 
arm would wave up and down to the sound of a ringing bell, and a voice 
recording would ask for a gift.

The cardboard displays raised $135,000 this year, and the charity says that 
it wants to place them in 1,000 retail locations next holiday season.

The charity's efforts to diversify the locations where it solicits kettle 
gifts -- plus the publicity the Salvation Army received when Target ousted 
the charity's workers -- helped the organization raise more this year than 
it had in the past. While the charity is still calculating how much the 
kettles brought in nationwide last year, officials say that at least 
$94-million was collected -- $1-million more than in 2003.

Government Cuts

For many charities, the loss of government funds is creating new pressure 
to raise money from private sources.

In Colorado, for example, 76 percent of charities that receive state money 
to provide job training, family planning, mental-health treatment, and 
other services saw cuts in government aid last year, according to a study 
by the Colorado Association of Nonprofit Organizations. Meanwhile, more 
than half reported increased demand for their services.

YouthZone, a Glenwood Springs group that helps troubled children, has 
already lost a third of its budget because of state and federal cuts. The 
charity has reduced the number of youngsters it serves from 1,500 to 900 
annually, even though it says demand for its services is rising.

The charity has tried to make up for a loss of $92,000 in government funds 
last year by charging fees to its clients, but it does not want to go too 
far in that direction because many people cannot afford to pay. YouthZone 
also stepped up its efforts to raise money from private sources, but the 
depressed local economy and competition from other charities made that 
difficult. The organization brought in $403,000 in 2004, $110,000 less than 
it raised in 2003.

The budget woes forced Debra Wilde, YouthZone's executive director, to 
place a freeze on hiring, and she is now doing three jobs -- her own, as 
well as that of the former program director and the financial officer.

"We are feeling the strain," says Ms. Wilde, "but we had to get leaner."

Other charities are also taking a cautious approach to spending on 
employees and other administration expenses -- even those organizations 
that achieved fund-raising increases in 2004.

"I will aim high and budget flat," says Peter Thomas, senior vice president 
of United Ways of New England, which raised $22.4-million last year, about 
$100,000 more than in 2003. "It is just prudent business until we see a 
real economic turnaround."
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MAP posted-by: Richard Lake