United Way expands funding eligibility

By Todd Cohen

MORRISVILLE, N.C. – Starting in 2013, any nonprofit in the four-county Triangle region that addresses priority needs targeted by United Way of the Greater Triangle will have a chance to seek United Way funding.

The change is expected to increase competition for a pool of funds that this year totals $5.23 million and until now has been limited to United Way’s 78 partner agencies.

Driving the change is growing demand from donors to see the impact of their contributions, says Angie Welsh, senior vice president for resource investment at United Way.

United Way wants to “be responsive to that new generation of philanthropists who care that the money and the treasure they’ve shared has really helped change somebody’s  life,” she says.

While United Way is “proud and supportive” of its partner agencies and their 150 programs that it funds, Welsh says, it also recognizes that addressing the region’s most urgent needs in health and human services will require “a more open view of all the nonprofits” providing those services.

The Triangle is home to over 5,000 nonprofits, she says, and many of them provide health and human services.

United Way also wants other nonprofits in Wake, Durham, Orange and Johnston counties to understand that the process for applying for funding will be rigorous.

That funding already is under pressure: Funds available for partner agencies this year are down 10.5 percent from last year as a result of last fall’s annual fundraising campaign.

For the rest of 2012, United Way will evaluate the past performance of agencies that it currently funds, as well as the priority needs their programs address, and how well their proposed services and activities show the impact they will have.

Information sessions

Nonprofits that are not United Way partners and want to apply for funds will be required to attend one of six two-hour information sessions it will hold in March, April and May at its offices in Morrisville.

At the sessions, United Way officials will talk about what United Way requires for agencies to be its partners and to account for their programs that receive its funding.

Agencies with annual revenues of $300,000 or more, for example, must have an annual audit, while those with revenues under $300,000 must have a financial review.

And agencies must provide a “logic model” for their programs that spell out what is needed to support activities and services to achieve the “outcome” the agency is promising in order to address goals from three “action plans” United Way has developed that focus on priority needs in the region.

Those priorities reflect urgent problems in the areas of income, education and health.

Agencies also must show how they will measure the impact of their programs, identify the “indicators” they will use and the systems they have in place to track those indicators, and provide evidence to show why their programs will work, as well as a “theory of change that makes sense,” Welsh says.

“And they have to be accountable for the results they promised they would deliver with the money they’re asking for,” she says.

United Way makes two-year funding commitments, with the second year of funding contingent on agencies delivering the outcomes they promised.

An after-school tutoring program seeking funding, for example, might promise to improve academic performance by increasing the number of students testing at or above grade level on their end-of-year tests in a certain subject area.

At the information sessions, Welsh says, agencies will be “fully informed about how realistic it is” for them to apply for United Way funding.

Letters of intent

Following those sessions, agencies will be able to submit “letters of intent” to seek funding.

After a review of those letters by United Way volunteers, agencies “that seem to fit our vision” will be invited to submit a full program proposal, which is a fairly extensive process,” Welsh says.

Organizations seeking United Way funds will need to define “how they have in the past achieved program outcomes,” she says. “We have specific program outcomes they must address, as well as indicators they must track for those programs.”

She says United Way is not looking for agencies that want to create new programs.

“We want demonstrated success in a program that this organization has been delivering,” she says. “We’re trying to invest in the strongest results possible in the areas of financial stability, opportunities for young children and youth and adults to have successful lives, and in health programs.”

And if in reviewing funding requests it sees agencies that might be offering programs that overlap or duplicate efforts, Welsh says, United Way will look for opportunities to encourage those groups to work together.

“We do see ourselves as growing in our role of collaborator, convener, as someone who has a unique ability to see the big picture as a region,” she says.

As United Way works to develop closer relationships with individual donors in a generation that increasingly cares about the impact of its giving, Welsh says, United Way also will be using social media and other digital technology to keep donors informed about community needs and the impact of the programs their dollars support.

“We understand that loop needs to be closed,” Welsh says, “of helping individual donors understand the power of their contributions.”

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Investment in fundraising urged

Health-care providers in 2010 saw slow recovery from the recession years of 2008 and 2009, when they saw fewer new major-gift pledges and planned-gift commitments, as well as smaller gifts from individual donors, although the commitment of individual donors has continued, a new report says.

At the same time, individual fundraising programs have experienced improved efficiency and effectiveness in raising cash gifts, and organizations are getting smarter about how they run their programs, says the report on “performance benchmarking” from the Association of Healthcare Philanthropy.

“Growing the foundation’s donor pool is essential in raising success rates in a down economy,” says the report, which is based on data for fiscal 2010 from 63 organizations throughout North America. “Organizations must work harder than ever to engage the public and bring new donors into the fold through annual and special-event activity.”

The report found a slow recovery from the recession years of 2008-09 in terms of both “cash” and “production.”

Cash consists of all outright gifts made during the reporting year in the form of marketable securities and other liquid assets, including payments on pledges and planned-gift maturities.

Production consists of total gifts of cash actually raised, excluding payments on previous years’ pledges, plus new gift commitments made in the reporting year.

Fundraising cash grew 14 percent during between fiscal 2008 and fiscal 2010, although 8 percentage points of that growth occurred between fiscal 2009 and 2010 alone, mirroring an overall increase in charitable giving to health-care groups of 8.1 percent in the U.S. and 7.1 percent in Canada that the Association of Healthcare Philanthropy previously reported.

Fundraising production, in contrast, grew only 2.5 percent in new pledges and planned-gift commitments between fiscal 2008 and 2010, recovering from a loss of 0.3 percent between 2008 and 2009.

“These results point to a faster pace of growth in outright cash gifts combined with payment on previous years’ pledges,” the report says. “In the long term, if production growth continues to remain flat, then we might expect declining cash revenues in future years.”

The report also looks at fundraising “efficiency,” or the cost to raise each dollar, as well as fundraising “effectiveness,” or the return on each dollar spend on fundraising, based on charitable revenues raised between fiscal 2007 and fiscal 2010.

The median cost of fundraising production, or identifying and securing major and legacy gifts, grew 5 cents on the dollars during that four-year period, while returns on investment fell 25 percent, the report says.

Returns on fundraising cash also fell since fiscal 2007 but experienced a faster rebound in fiscal 2010, it says.

“Overall, these results point to the importance of remaining flexible in attracting annual gifts of all sizes from a large donor pool – particularly during periods of rough economic activity for donors,” the report says. “At the same time, it does not negate the value of previous years’ work in attracting pledge or gift commitments, typically raised through programs such as planned, major-giving campaigns.”

The biggest share of contributions to health-care organizations continued to come from individual donors, with individual giving representing 49 percent of total gifts in fiscal 2010, up 3 percent from fiscal 2009, and the average gift totaling $415, the report says.

External donors such as government entities, other foundations and other sources all increased their gift sizes.

Major gifts continued to represent the largest share of total fundraising revenues, 51 percent, a category that includes gifts of $10,000 or more from individuals,  including campaign gifts, as well as gifts of any value from corporations and foundations.

Planned giving represented smaller share of total revenue, or 14 percent, although new pledge commitments averaged nearly $60,000, outpacing every other fundraising program analyzed.

Gifts from public sources posted the highest return on investment, or $14.51 per dollar invested in fundraising, mainly because few organizations have full-time staff devoted exclusively to raising those gifts.

Major giving and planned giving also had comparatively high returns on investments, near or over $5 per dollar invested.

The report shows that “central factors that are likely to influence high returns are sustained investment in fundraising coupled with the judicious allocation of human resources to cultivate and nourish donor relationships,” William C. McGinly, president and CEO of the Association for Healthcare Philanthropy, says in a statement.

That will take “dedicated work to accomplish,” he says. “It will require continuous, objective observation of the philanthropic landscape, the knowledge set to meaningfully interpret findings, and the leadership skills to put lessons learned into practice.

Family Services retooling to help families cope

By Todd Cohen

WINSTON-SALEM, N.C. — In the early 1900s, a Winston-Salem telephone operator named Annie Grogan started giving part of her paycheck to needy families in the community.

Co-workers and other individuals started pitching in and, in 1905, they formed the Association of Charities, which soon was joined by local churches.

Now known as Family Services, a private nonprofit, the agency serves about 5,000 families a year.

Operating with an annual budget of $8 million and roughly 150 employees, the agency provides services in the areas of safe relationships, family solutions, and child development.

And with the battered economy continuing to take its toll on families, Family Services is seeing growing demand for services, as well as a shift in the types of families looking for assistance.

“More families are struggling with underemployment, unemployment or lack of benefits,” says Al Renna, who has been the agency’s president and CEO since 1995.

“So we’re seeing more of the middle-class, working family needing counseling,” he says, “because they’re affected by the economic pressures while not necessarily having the insurance benefits that would support counseling for family and children’s issues.”

In the agency’s largest division, which focuses on child development, a Head Start program serves nearly 500 children ages three and four, while other privately-funded programs also serve young children.

The group’s safe-relationships division includes a battered-women’s shelter, owned by the Winston-Salem Foundation, that houses up to 34 women and children.

And the agency recently landed a $180,000 federal grant that will pay for subsidized rents in community apartments for up to 10 women at any given time, a new “transitional-housing” program that will give women time to “build up assets so they could take over more and more of their housing costs,” Renna says.

The safe-relationships division also provides services in the areas of domestic violence and sexual assault.

The agency’s family-services division provides family and individual counseling; helps people buy used cars so they can get to work and get their kids to child care; works with volunteers who phone frail elderly people every day to make sure they are okay; and assists with domestic adoptions, including “home studies” for families throughout the state wanting to adopt children from abroad.

In the last decade, the agency has made over $1 million worth of auto loans and, in the fiscal year that ends June 30, 2012, is on track to make auto loans worth nearly $250,000, Renna says.

“Our goal is not only to get their car but to help them build credit so they can get future loans for other things,” he says.

Family Services generates $5 million, or 63 percent of its overall budget, through federal funding for its child-development programs, mainly for Head Start.

The agency also generates $900,000 in state and county funds, just over $500,000 in counseling fees, roughly $1.2 million from United Way of Forsyth County and other local United Way affiliates, and roughly $250,000 through fundraising, mainly from individuals.

But with funders increasingly targeting and restricting the use of their support for specific programs, Renna says, Family Services lacks the flexibility to shift dollars to “wrap” services around emerging community needs.

The economic downturn has made it tough for working families with jobs that are low-paying but not low enough to qualify for subsidized day-care programs like Head Start, he says.

To better cope with the tough economic times, including ongoing changes in government funding and the impact of the economy on private funders, Family Services is reviewing its business model and looking for ways to bundle and market its services to corporations, medical providers and families in return for fees.

The types of fee-based services it is considering include employee assistance programs for small companies, training on workplace violence for corporations, and conflict-resolution training, child care, and specialized parenting training for individuals.

“Like many nonprofits, we’re in that difficult transition of trying to remain stable in an unstable world,” Renna says.

“The funding environment continues to be confusing and unpredictable,” he says. “So we’re trying to read it correctly, support the vital services we’re delivering, and at the same time prepare ourselves for a greater change that will lead us into new ventures that will ultimately make us more sustainable.”

Focus on donors can help build community

By Todd Cohen

Donors are changing, and community foundations are adapting their business model to try to keep up with donors’ needs.

What is emerging may be a greater focus on building a more engaged community of donors by providing strategic advice on giving, and on social and global needs, and by connecting donors with charities and other donors who care about the same causes.

That is the view of Ellen Remmer, president and CEO of The Philanthropic Initiative, a nonprofit consulting firm that advises donors and on Jan. 1 merged with The Boston Foundation.

The foundation, which was founded in 1915, has $850 million in assets and has made over $1 billion in grants, including nearly $78 million in 2011, when it also received $81 million in gifts, while The Philanthropic Initiative, which was formed in 1989, has advised corporate, foundation and individual clients on giving away roughly $1 billion.

The merger creates a new, hybrid model for community foundations that can help ease a natural tension The Philanthropic Initiative identified in the old model in a study 10 years ago, Remmer says.

That study, which focused on donor education and learning, recommended that community foundations be strengthened so they could serve as more effective educators of donors.

Because their traditional business model relies on fees from donor funds under management, Remmer says, community foundations tend to focus on generating new funds, leaving them less time to devote to donors.

“The tension is, they’re always trying to get money under management,” she says.

But with their needs changing and growing, she says, donors need a lot of hands-on attention, as well.

Donors, for example, have a growing number of choices, and thus a growing number of questions, about what to support and how to give and get involved.

Family giving increasingly needs to accommodate not only an older generation that traditionally has focused on institutions like hospitals or museums, but also a younger generation that tends to focus on specific issues like homelessness.

And while they all live in local communities, donors increasingly care about global issues as well.

So community foundations should be providing training and resources for donors, particularly families, as well as hands-on consulting that helps them clarify their values and interests, define their mission, and craft a vision about what they want to accomplish, Remmer says.

Some donors also may want to operate their own foundations or manage the investment of their philanthropic assets, she says.

So while they traditionally have played those roles, she says, community foundations should be thinking about ways to accommodate those donors while still providing the advice donors need about their giving, a role that consultants like The Philanthropic Initiative can play.

A growing number of donors also want to have a big impact with their giving, and recognize they may need to collaborate with other donors, so in addition to giving money away, they find themselves playing a fundraising role, Remmer says.

In the wake of the earthquake in Haiti in 2010, for example, a Boston couple created a $1 million challenge fund at The Boston Foundation that generated another $1.5 million from other local donors.

In addition to just raising money, the effort engaged Boston-area donors who are part of a Haitian diaspora, and helped the foundation connect with them.

Throughout the U.S., Remmer says, community foundations are looking for ways to bring donors together so they can learn from one another and work together.

So focusing on the needs of donors can help a community foundation play a leadership role in building community.

“To be a leader, you need others to be with you,” Remmer says. “It’s all about having the potential for more influence, and having those relationships.”

In the end, she says, “you’ve got to build community.”

Product giving seen as good business

Companies can get a better return on investment by donating merchandise instead of liquidating or destroying it, a new study says.

Giving products to charities boosts corporate bottom lines, reduces waste in landfills, and provides relief for people in need, say The Business Case for Product Philanthropy by the School of Public and Environmental Affairs at Indiana University.

The research shows that “donating products can result in substantial financial and social benefits for minimal cost and risk,” Justin Ross, assistant professor of public finance and economics and lead researcher for the study, says in a statement.

Product giving offers a “considerable advantage over cash donations because it can carry an enhanced tax deduction” and is more visible than giving cash, the study says.

During recessions, it says, cash can be a more pressing constraint for businesses, while lower sales tend to create a surplus of inventory.

And because product costs are below market value, product donations can be more valuable to nonprofits that cash-equivalent gifts for buying those same products, the study says.

It also can be simpler for companies to decide how much product to donate than determining the amount of a cash gift, freeing management to focus on other issues.

Donating cash is equivalent to donating profitable inventory, so donating products that otherwise would be liquidated or disposed of allows for bigger strategic philanthropy by a company, the study says.

Product donations also can provide the same “image-enhancement benefits” as marketing and advertising programs, it says, and at a lower cost.

Companies that donate products also avoid fees and “negative branding implications” associated with disposal of excess inventory, the study says.

And product donation is “superior to liquidation in most circumstances,” it says.

For people in need who are get the products donated to charities, donated products “can alleviate constraints on family budgets by reducing necessary expenses associated with utilities, household upkeep, furnishing, apparel and personal-care products,” the study says. “This frees family income to cover other more discretionary expenses.”

The study includes a worksheet that companies can use to conduct a financial analysis help decide whether to liquidate, dispose or donate products.

It also provides information for estimating logistical costs of product philanthropy, and describes administrative and accounting involved in product philanthropy.

Children’s advocacy center plans to expand

By Todd Cohen

RALEIGH, N.C. — In the past year, the child protective services unit of the Wake County Department of Social Services, as well as the Wake County Sheriff’s Office and local police departments in the county, submitted 237 requests to SAFEchild’s new Children’s Advocacy Center to conduct medical evaluations of children who had been sexually or physically abused.

The center, which opened in October 2010, handled 97 of those cases.

Part of a growing network of children’s advocacy centers throughout the state, and the only one in Wake County, the SAFEchild program uses a multi-disciplinary-team approach to assist local agencies that investigate, prosecute and treat abuse.

Before the center opened, a child in Wake County who was sexually or physically abused would have to navigate, “while in trauma and crisis, a very complicated system” of agencies and professionals, says Cristin DeRonja, the center’s director.

“And these kids were being re-traumatized over and over again by having to retell their story,” she says. “There wasn’t a coordinated, streamlined approach to these investigations.”

Before the center opened, scheduling an evaluation could take well over a month, compared to 10 to 14 business days at SAFEchild’s center.

And kids and their families, as well as professionals involved in the evaluations, had to make visits, sometimes more than once, to WakeMed, the only location in Raleigh where evaluations were conducted, or to Duke Medical Center in Durham, UNC Hospitals in Chapel Hill, or University Health Systems in Greenville.

The new center operates with annual operating costs of $322,000, or nearly 29 percent of SAFEchild’s annual budget, and a staff of three employees plus two part-time medical practitioners, one of them representing an in-kind donation from WakeMed, the other under contract.

Grants cover 53 percent of the costs of operating the center, with donations and fundraising covering another 24 percent and insurance reimbursements covering for 23 percent.

The medical evaluation consists of an interview, medical examination, multi-disciplinary review of the case, and advocacy support and services.

Participating in the review are the center and its collaborating partners, including the Wake district attorney’s office, Wake child protective services, sheriff’s office and police, medical professionals, mental-health providers, and Wake County public schools.

“No one professional knows every single thing about what needs to happen in these investigations,” DeRonja says, “and we need to work together as a team to provide the best outcomes for the healing of the child, but also the best outcomes for the prosecution of the offenders to keep the child safe and our community safe.”

The interview and medical exam alone take two to three hours, and the interview is conducted by a center staff member, digitally recorded, and observed live on a monitor in a different room by the referring professionals.

With its current staffing, the center can see three to five children a week, or a maximum of 20 a month, compared to 10 to 12 a week it could see if it had a full team of medical professionals, DeRonja says.

To add a full-time medical practitioner for the center, SAFEchild has launched a campaign to raise $200,000.

Chaired by Geoff Miller, owner of Professional Recovery Inc., the campaign raised nearly $120,000 at a luncheon Oct. 6.

A key goal for the center, DeRonja says, is to “increase our capacity to see more kids and get them in sooner.”