Nonprofits defying a downed economy 27° Organizations leverage new revenue in recession

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PORTSMOUTH — When Martha Cunningham arrived in 2007 as
development director for Families First Health & Support Center,
few could have anticipated the severity of the economic downturn
that unfolded beginning in late 2008.
"During the economic crisis, every single funding source that a
typical nonprofit relies on was getting blindsided," Cunningham
said. "Portfolios for individuals declined and many foundations had
to reduce funding because their portfolios also declined. There
were cuts in government funding while our demand for services
increased. It really was a perfect storm."
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Organizations leverage new revenue in recession
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Two years later, it didn't turn out to be a fatal storm for local
from Newington bank, say police organizations that depend increasingly on individual donations,
12/13/2010
such as Families First, which functions as the region's all-purpose
community health center. Families First changed part of its fund-raising focus to target major donors
through a more robust development effort, intense networking and initiatives such as challenge grants.
Monetary and in-kind service donations now make up as much as 27 percent of the almost $4.4 million
annual budget for Families First, up from 24 percent in 2008-09, to fill a necessary budget hole as demand
for services increased. According to the past two annual reports, Families First — which served almost
4,200 people from the region during the reporting year that ended June 30 — had a more than $105,000
increase in monetary donations from 2008-09 to 2009-10, from $875,295 to $981,750.
This came during a time, according to the Boston College Center on Wealth and Philanthropy, when
overall household charitable giving was down 5 percent nationally in 2009 to $217.3 billion from 2008. And
in New Hampshire, according to IRS data compiled by the New Hampshire Charitable Foundation,
itemized household charitable giving went from $3,405 in 2007 to $2,800 in 2008, a drop of almost 23
percent.
"Overall, the amount of giving does follow the economy," said Katie Merrow, program director at the NHCF.
In a 2010 survey, Merrow said, about half the state's nonprofits expected donations to stay the same,
about one quarter expect them to decrease and the remaining quarter expect an increase in donations.
She said the economic crisis forced nonprofits to rethink how they did business and many are poised to
take advantage of an economic rebound.
"There's no doubt that the economy has led to a increase in the demand of services while budgets were
being cut or stretched to the limit," Merrow said. "But there has still been a lot of charitable giving and
many donors want to strategically use their donations to get maximum effect."
Getting the most bang for the buck for Families First, Cunningham said, was done in part by tapping into
the fundamental goodwill on the Seacoast among major donors. In particular, challenge grants are effective
because they offer the ability, for example, to double the impact of a donor's dollar by matching it.
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"In the world of nonprofits, it's not unusual to make a decision to look at major gifts to enhance revenue
streams," Cunningham said. "On the one hand, it's looking for people who have the capacity to give, but
more importantly, they have the desire to give to an organization that is vital for the well-being of the entire
community."
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Martha Stone, development director at Cross Roads House in Portsmouth, said major gifts and challenge
grants were important in raising more than $4 million for the capital campaign for a new building that
opened last November to house the homeless.
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"We were unique in that we had the major capital campaign over three years while doing our annual fundraising," said Stone, who was hired seven years ago to prepare for the capital campaign that is charged
with raising $5 million, to include a second phase of construction next year. One important ingredient was
that Cross Roads House, founded in 1982, had a foundation and reputation for good work that Stone said
made raising money "in this incredible community" if not easier than certainly more feasible.
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With the crucial holiday and end-of-year charitable giving season kicking off, Stone said the challenge
continues to be raising necessary donations every year to cover two-thirds of the annual $1 million
operating budget. Stone said the goal is to keep in contact with its existing donor base and expand it
further with a greater emphasis on communication that explains the shelter's needs and how it benefits the
community.
Cunningham said the number of major donors to Families First rose dramatically from 40 donors giving
$1,000 or more to 130 giving $1,000 or more. "We learned that donors are inspired when they see
someone in the community issue a challenge," Cunningham said.
The Schleyer family of Rye Beach was one of those challenge donors at the $25,000 level. Mary Schleyer
is also on the Families First development committee, after having had a 20-year affiliation with Berwick
Academy as a volunteer and trustee, including three years as board president. She said when she talks to
donors, they want to know how to best leverage their dollars, and challenge grants are a beneficial avenue
to that end.
"I know there is less expendable income and that decisions have become harder. They want to give to
organizations that will make a difference," said Schleyer, who has donated to or been involved with
Families First for five years. "With challenge grants, you know every dollar you give leads to two dollars,
and that's enticing for some donors."
Schleyer said her goals when meeting potential donors isn't an immediate solicitation, but a chance to
educate and communicate the mission of Families First. "What I do is tell them how passionate we are and
how the mission of Families First has stayed true to client needs," she said.
Another goal is to make fund-raising dollars go further. Merrow said nonprofits are leveraging the
expertise, enthusiasm and networking capabilities of volunteers more than ever. Cunningham said the
active engagement of the volunteer board and development committee helped create a large return on
investment and cut individual fund-raising costs to around 1 percent.
Donna Ryan, a local restaurant owner and developer, is co-chairperson of the development committee of
Families First and has been very involved with the organization. She said the successful fund-raising
efforts over the past two challenging years speaks volumes about the community. She engages in much
word-of-mouth sharing with families, friends and businesses she works with to raise money and
awareness.
"In this community, people realize the important role that Families First plays," Ryan said. "They can also
relate to having good health for themselves and their family."
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SeacoastOnline Article: Nonprofits defying a downed economy http://t.co/uGYx5HE
November 29, 2010, 11:51:33 AM EST – Flag
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Families First
Families First wins generous financial support from individuals & businesses even in this
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November 29, 2010, 10:18:52 AM EST – Flag
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Nonprofits defying a downed economy http://bit.ly/fPZ1Ht #nonprofit
November 29, 2010, 4:57:55 AM EST – Flag
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