April 1998
VOLUME 5, ISSUE 8
PhilantbropyJounial
A nonprofit newspaper about the nonprofit community H A /
OF NORTH CAROLINA
Challenge raises $33 million for food banks, pantries
Direct-mail entrepreneur Alan
Feinstein helps nonprofits through
out U.S. raise money.
By Michael R. Hobbs
The tally is in.
An unusual challenge issued by a
Rhode Island philanthropist prompt
ed food banks, soup kitchens and
food pantries throughout the U.S. to
raise a total of $32.9 million.
A foundation established by for
mer newsletter pubUsher Alan Shawn
Peinstein will be sending out checks
this month to disburse $1 million
pledged as a challenge to the groups.
Splitting
Feinstein’s $1
million will
be 3,575 food
banks and
soup
kitchens and
pantries that
responded to
the chal-
1 e n g e .
Feinstein’s
donation wOl
be spht equal
ly among the participating groups,
meaning each will receive a check for
approximately $279, said Kerry Park,
Feinstein
a publicist for Feinstein. The checks
will be mafled by mid-April, the foun
dation said.
Kathy Super, director of develop
ment for Second Harvest, a Chicago-
based network of food banks, said the
results of Feinstein’s challenge were
wonderful.
She said the most important
development stemming from the chal
lenge was the realization that food
banks and soup kitchens could effec
tively raise money in February, a time
of year not considered to be a good
time to raise money for such groups.
“What this shows them is that
donors respond at any time of year,”
she said. “I hope they go out again
next year, whether or not they have a
challenge.”
Feinstein, 66, made millions in
newsletter publishing and through
the sale of collectibles advertised in
his newsletters. He closed his busi
ness two years ago to devote himself
to his philanthropy, which has made
him a celebrity in Rhode Island. He
regularly appears and schools and
soup kitchens to give away money.
He estimates he has given away
more than $50 million, including the
money used to establish the Feinstein
Foundation.
Feinstein’s challenge included a
provision that charities send him
copies of donors' checks. Although it
wasn’t mentioned in his announce
ment of the challenge, Feinstein did
allow groups to black out the names
and addresses of the donors.
Feinstein said he may send other
fundraising material to the people
who made donations in response to
his challenge. He told the
Philanthropy Journal the list of
names and addresses never would be
used for commercial purposes and
would not be given to anyone else.
Serious funny money
Scrip offers major fundraising tool
The selling of the retail certificates
has become a major fundraising
tool for many grassroots organiza
tions.
By Joan Alford
More and more schools and
churches are finding they can raise
real cash by selling less-than-real
money.
What they’re selling is scrip — a
currency that’s akin to gift certifi
cates. TOen scrip is sold, a portion
of the proceeds goes to the organi
zation.
Looking for a way to help her
daughter’s school raise money, Jan
Raymond of Manchester, N.H., con
vinced school administrators in
1995 to begin a scrip-selling pro
gram.
“After introducing the idea at a
parents’ meeting, we began selling
scrip and made $15,000 the first
year,” she says. “There was no turn-
Tips for Selling the Idea of Scrip
^ Get support from your orga
nization's administrators before
making the decision ond com
mitment to sell scrip.
• Develop a good team of vol
unteers. The number you need
depends on the size of your
organization and your planning
* choose a nonholiday time of
Hie yeor to start your program.
ingback.”
Raymond now runs Fundit, one
of a handful of firms throughout the
U.S. that supply scrip to schools,
churches, scout troups and other
grassroots groups.
The companies make scrip
arrangements with grocery store
and restaurant chains and other
major retailers. The scrip compa-
* Do the best job possible in
publicizing the initial meeting
describing the program. If you
use a PTA forum, ask the school
to allow you to speak near the
beginning of the meeting so
your audience will be fresh and
* Use graphs and charts to
show what percentage of scrip
will go to your diarity and what
will return to the retailer and/or
nies make their money by getting a
percentage of the value of the scrip.
Big business
The selling of scrip has become
big business.
An estimate recently published
by the Los Angeles Times pegged
the scrip industry at $600 million to
$1 billion a year.
National Scrip Center, which also
scrip service.
• Earmark funds for smaller,
more easily attainable items
when you begin. You might
choose 0 pie% of playground
equipment or a printer for a
computer lob. Once that goal is
rearmed, your organization will
be encouraged to go for high- '
er-ticket items.
:
grew out of the fundraising efforts of
a mother trying to raise money for
her child’s school, is the nation’s
largest scrip supplier, with $241 mil
lion in revenue last year.
Scrip Plus, which was No. 4 on
Inc. magazine’s 1997 list of “Top 500
Fastest-Growing Private
Look for SCRIP, page 13
Blue Cross panel
preparing to write
its proposal
By Michael R. Hobbs
A commission studying what
rules should be established for the
possible conversion to for-profit sta
tus of Blue Cross and Blue Shield of
North Carolina is nearing the point at
which it begins putting together its
proposal.
The commission needs to shoot
for completion of its work in April to
be ready for the convening of the leg
islature in May.
'The commission needs to decide
what form its report will take. The
panel Includes members of the con
ference committee appointed by
House and Senate leaders to negoti
ate differences between the two ver
sions of a Blue Cross bill that passed
both houses last year. As a result, the
group has the option of issuing a
report that cannot be amended when
it comes up for votes in both cham-
Look for BLUE CROSS, page 11
Rising risk
Investment trends, strategies grow more sophisticated
While the bull market carries phi
lanthropic endowments to new
heights, trustees, managers and
staffs are confronted with new
challenges. Should they stick with
the conservative Investment policies
of the past or expand their risk to
achieve a higher return?
BySeanBahjey
Observers agree nonprofits and
foundations are getting smarter and
more sophisticated about how they
invest and manage the growing pot of
assets given to them to support their
charitable purposes.
In the past, charitable invest
ments were extremely conservative.
Managers purchased bonds that paid
fixed rates of interest, and it was easy
to plan for future cash flow and the
needs of the institution entrusted
with the charitable money.
But the financial and economic
landscape has changed dramatically
in the last 15 years. The economy has
exploded, producing new wealth and
new philanthropy. High interest rates
MONEY MANAGEMENT
of the early 1980s have disappeared.
And the stock market continues to
reach record highs.
It’s a financial environment few
experts have known before. And it
has created a variety of complex chal
lenges for those people entrusted
with overseeing the growth of large
gifts that philanthropists expect to be
managed safely and wisely.
High returns mean more money to
carry out an organization’s
charitable purpose, be it to give
money to nonprofits or spend money
fulfilling a nonprofit’s mission.
The primary change has been in the
area of “fixed assets.”
Relatively safe bonds that guaran
tee a fixed rate of return are clearly
less popular. Althou^ they are safe
because they put the power of com
pound interest behind a nonprofit’s
or foundation’s investment, the total
return on such bonds cannot com
pare favorably to the stock market, or
other investment areas.
“If you look at the decade of the
90’s, there’s been a major shift in
the reduction of fixed assets,”
says Wayne Coon, chief financial offi-
Look for ALLOCATION, page 7
OUR PHONE NUMBER
HAS CHANGED!
You can reach any
Philanthropy Journal
department now by
calling: 919-832-2325.
1 NONPROFITS
j FOUNDATIONS
1 VOLUNTEERS
1 CORPORATE GIVING
1 FUNDRAISING
Grants & Gifts 15
In April 15
Opinion 10
People 16
Professional Sen/ices..17
Poe options
A health education group
ponders its future following a
two-year planning process.
m Page 4
Anti-gun grants
A foundation commits $30
million to reduce handgun
violence.
8 Page 6
Paid volunteering
Corporations find employee
volunteers help company,
community.
■ Page 8
Checkout fundraising
Unusual Procter & Gamble
coupon fundraiser supports
Special Olympics.
■ Page 12
Giving rises
United Way results show
contributions rose again in
1997.
■ Page 14