Ellen Alberding’s interview with the Chicago Tribune in advance of the Independent Sector‘s meeting in Chicago earlier this week pressed nearly every one of the Nonprofiteer’s buttons. Ms. Alberding, head of the Joyce Foundation, described the Foundation’s approach to what even she characterizes as a perfect storm of increased need and reduced resources in the nonprofit sector:
We do what any good business person would do when faced with reduced resources. We have become very focused on first maintaining support of our core grantees. Foundations are required to spend a minimum amount — 5 percent of our assets. On occasion, we will overspend that in order to keep our grantees whole.
In other words, business as usual. Most likely the Joyce Foundation’s governing documents prevent its Board from spending its assets down to zero, but there’s no reason why the Foundation shouldn’t use more than the statutory minimum 5% of its $800 million in assets to sustain the work it exists to support. Foundations are NOT businesses; they exist to give their money away, and only in some vague theoretical sense is an institution with $800 million facing constraints preventing it from giving away more than $40 million.
If Joyce gave only 6% instead, that would be another $8 million available to nonprofits in its areas of concern—a not-insubstantial 20% increase. What is stopping the Foundation from doing this, other than a misguided sense that preserving its capital is more important than doing its job?
And then the cherry on the sundae:
It’s the position of the Independent Sector that a cap [on charitable deductions] will reduce charitable contributions across the board and diminish support for nonprofit organizations. I believe it’s the administration’s view that the 28 percent cap might have some impact, but it wouldn’t have a dire impact. (But) I think we have to listen to the organizations themselves, who feel otherwise.
In other words, notwithstanding reality, the prejudices of self-interested parties will dictate the organization’s behavior. Their minds are made up—don’t confuse them with the facts. But as President of the organization, doesn’t it behoove Ms. Alberding to make sure her members don’t make their decisions based on fantasy?
Grrrr.
In fundraising there’s an old saw that if you want someone’s money, you ask for his advice. Leave it to the ever-innovative Rahm Emanuel to turn this observation into an ultimatum, telling people equipped with useful advice that it won’t be heard unless it comes wrapped in money.
That, in effect, is the meaning of Mayor-elect Emanuel’s request to a group of Chicago foundations that they pay the costs of his transition, costs traditionally covered by leftover campaign funds, of which Emanuel has plenty. In a city whose political culture has long consisted of being punished for disagreeing with or disobeying the mayor, the foundations faced an unattractive choice: call the mayor-elect on his inappropriate pick-pocketing and look forward to 40 years in the desert, or pay the man the $2 (or $2 million, as the case may be) in order to be heard.
The Nonprofiteer doesn’t blame the foundations for ponying up, though she wishes they hadn’t: their job is to influence public policy and make change, and the mayor’s office is an important route (sometimes the only route) to doing so. But the Emanuel administration-in-waiting should never have asked for this sort of tribute. Whether intended or not, the request makes it appear that access to city government is restricted to those who tithe. There’s nothing new about that—the title “City That Works” has always ended in a silent “For Pay”—but Chicagoans might be excused for having hoped for something new post-Daley.
Many in the nonprofit sector are dismayed at having to compete with city government for the foundations’ largesse, and that’s a legitimate concern, though a belated one: the Daley administration never hesitated to ask private and foundation donors to subsidize city expenses with money that would otherwise have gone to independent community groups. (Can you say “Millennium Park”? “Olympic bid”?) But the Nonprofiteer is more concerned about a new mayor’s implying, and establishing a precedent for the idea, that even being heard on the 5th floor requires big bucks.
Some wag once said that New York was about culture and Washington about power, but Chicago was all about money. Plus ca change . . .
As all budding journalists know, every story can be told through judicious use of the 5 Ws: Who? What? When? Where? Why? Here the Nonprofiteer employs this efficient system to tell the story of how reluctant volunteers can become enthusiastic and successful individual-gifts fundraisers.
For most small- and medium-sized organizations, everything about this story is a blank. So here’s a primer on how to fill in that blank.
WHO to ask?: Only two types of people should be asked individually for gifts: people who’ve given to your group before, and friends of your Board members. With anyone else, it’s sheer impertinence: “Hi, nice to meet you, open your wallet.” Ask friends (of the agency and the Board), and ye shall receive.
What to do when your Board members say, “I don’t want to ask my friends for money”? Reply: “You don’t have to ask your friends. Just ask each other’s friends!” So Angela asks John’s friend, and John asks Angela’s. All they ask of their own friends is to come to a meeting, and all they have to do at that meeting is wax enthusiastic about the group and listen while the other one solicits the gift.
WHAT to ask for?: If they’ve given to the agency before, you’re asking for more. You have to make the leap of imagination (from $250 last year to $1000 this year) before the prospective donor can think about making it.
Don’t worry about being too ambitious in your monetary goal. Very few prospective donors are offended by being mistaken for rich people. (Women, though, are more likely to be taken aback than men, so ask for slightly less from women. They’re more likely to say ‘yes,’ so it all evens out.)
If you’re asking a Board member’s friend, ask for slightly less than the Board member gives him/herself, because the first thing the prospect will do is turn to his Board friend and say, “What do you give?” If the Board member doesn’t think the agency’s worth $500, the friend is unlikely to think it’s worth anything.
What if your Board member’s friend is a gazillionaire? (We should all have this problem.) Then prime the Board member to say, “I give $200, because that’s what I can afford. We’re hoping you’ll likewise consider a gift based on your capacity.” Again, few people mind being suspected of success, so if your Board member is prepared to say, “Listen, I know you made a killing last year when you sold your Google stock . . .” his friend is unlikely to want to correct him!
WHEN to ask: The Nonprofiteer is a prompt—some might say premature—fundraiser. As a cautionary tale, she offers the story of how her alma mater took her out for coffee repeatedly to soften her up for an ask, despite her saying, “Guys, I’m a fundraiser. I know what we’re doing here. Just ask me for the money!” By the time they were ready to ask her, she’d been reminded that the school’s investment philosophy would have permitted owning shares in slave-ships, and did permit investing in companies propping up genocidal regimes; and therefore she declined to give, though she wouldn’t have reneged on a preexisting pledge. So don’t delay; get the yes!
“What about cultivation?” you ask. The Nonprofiteer believes that lots of what passes for “cultivation” in individual-gifts fundraising is nothing more than stalling. Don’t hold “cultivation” events and plan to ask for money later; if you hold an event, either get contributions through the ticket price or ask forcefully that night.
All you need to do to “cultivate” people is to demonstrate that you’re thinking about them on a regular basis, and you can do that by forwarding something you think they’d like to read. Better yet, send them invitations to your activities, whether performances or client graduations or river cleanups. People give where they feel they belong, so be on the lookout for “belonging” opportunities. For this purpose, the less special the event, the better. If you do something special for a donor, make it an ask.
One word of caution about WHEN: don’t ask too soon after the last gift. May and June may be two separate fiscal years to you, but your donors probably think (and give) on a calendar-year basis. So they’ll think you bizarre and ungrateful if you respond to their May gift with a June ask.
WHERE?: Over breakfast, lunch or dinner (or possibly bedtime snack). The Nonprofiteer is a firm believer in the power of food to facilitate fundraising. In any case, the advantage of a meal is that it requires the prospective donor to sit still for about an hour, during which time you can a) learn about her; b) educate her; and c) ask her.
WHY?: Why bother with individual gifts? Why not just write some more grants? (asks your Board.) Three reasons:
By contrast, most individuals give because they’re asked, and what they’re asked for is support for a cause or an agency (not a single program), and once they’ve agreed they keep giving out of habit. So you have to actively offend them before they stop.
So that’s the story of successful individual giving. And if who-what-when-where-why merely piques your interest, you can learn how right here.
Dear Nonprofiteer:
We are a small non-profit music school. We have been running into a problem with grants strategy–as in, we aren’t getting any.
I am consistently getting feedback:
1. “Lovely program but we are only funding projects that can promise to reach 500-1000.” We are small with 350 students and while I can conceive of a program that would reach a larger audience, I don’t feel I can creditably offer that in a proposal.
OR
2. “Great ideas but we only fund people who we funded before.”
Previous executive directors in more generous times had decided that grant seeking was not worth the effort. I think we need to make a big push but I am starting to wonder if they were right.
We have a subsistence existence with only earned income and I feel we are desperately in need of a more diverse income stream if we are ever going to grow or prosper. Operating at less than break-even is not an option with my board.
What’s the small non-profit to do?
Signed, Stymied at Every Turn
Dear Stymied,
The Nonprofiteer suspects, as you’re starting to, that your predecessors were right when they gave up seeking foundation support. At the best of times, foundations have the attention span of fruit-flies, which means even agencies receiving support spend the whole grant term sweating blood over whether they can get it next time–nonsensical program-officer-speak to the contrary notwithstanding. (What kind of response is, “We only fund those we’ve funded before,” anyway? It’s barely lucid, let alone reasonable–unless it’s just a bald-faced lie.)
And these aren’t the best of times. (Like you hadn’t noticed.) Some foundations are stepping up and spending a larger percentage of their income on grant-making to make up for a loss in their portfolios; others can’t, or won’t. And as aggravating as it is to have a foundation ask you to provide services on a scale beyond your capacity, the Nonprofiteer will defend that point of view: foundations are in the business of trying to have broad impact with narrow means, and your program simply doesn’t meet their needs.
So you have to seek funds from another source. Earned income is all very well, but of course you’re required to raise one-third of your budget in contributions simply to maintain your 501(c)(3) status. How?
Well, as the Reverend Mother did not say, “When a foundation closes a door, somewhere an individual donor opens a window.” Stop pounding your head against the foundations’ doors and get thee to an individual gifts program. This may be your only option; it’s certainly your best one. Seek small gifts through an annual campaign, and big ones through individual appeals made by you and members of your no-deficit Board. (They made the rules, now they have to play the game.)
The annual campaign: Ask your students and their families, as well as any alumni you may have, to help you make up the difference between what it costs to provide this first-rate music education and what you charge in tuition. (If you don’t know that number, figure it out: it’s magic. Not only does it encourage contributions, it makes future tuition increases easier to swallow. Why do you think colleges keep repeating, “Tuition covers only a fraction of the cost of educating a student”? Though at $40,000-plus a year, one might begin to wonder what fraction, exactly.)
Ask at “Back to School” time, and again around Christmas, and again before or during recital/graduation season. Also, ask at performances. Don’t be shy: remember that most people say they give because “Someone asked me.” Your school is just as deserving as any other charity, and with 350 people in the program someone connected to you should be willing to cough up some dough.
Major gifts: Identify anyone who’s already been giving you money and take him/her out to lunch and ask for more. If your Board members aren’t already giving, conspire with your Board president to get them to do so–and once they’ve given, ask each of them for the name of one person who could be asked. Remember the Nonprofiteer’s rule: Board members don’t ask their friends for money–they ask each other’s friends for money!
Individual gifts come in smaller chunks than foundation gifts (though not in your case, actually). Moreover, they’re infinitely renewable and will sustain your school for years to come. Good luck, and let us know how you do.
Many thanks and kudos to Blue Avocado and the Nonprofit Online News for this glorious skewering of the news coverage and foundations which so dominate the nonprofit sector.
Or, as one of the Nonprofiteer’s pithier colleagues remarked, “Narcissism in philanthropy–really?”
 | Andrew Olsen on Dear Nonprofiteer, How dare th… |
 | Anita Bernstein on Dear Nonprofiteer, How dare th… |
 | Nonprofiteer on Foundation Friday: War Profite… |
 | Cuzierizkiey on Foundation Friday: War Profite… |
| Anita Bernstein on Give the people at Komen a pie… |
