November 1998 ■iorth Caroiina -ig! VOLUME 6, ISSUE 3 PhilantbropyJoumal OF NORTH CAROLINA The business of service Nonprofits today more entrepreneurial, businesslike There is a move to increase the professionalism and accountability of the independent sector, and . more nonprofits and the sources that fund them are working to encourage the change. By Emily Brewer Nonprofits need to be enterprising to make it in today’s world. Shouldering a greater burden than before, with fewer resources and higher expectations, nonprofits no longer can hold out their hands and reap sufficient funds to do the job, say observers. Jim Johnson is one the nation’s I leading proponents of increasing the efficiency and efficacy of nonprofits. He founded and directs the Urban Investment Strategies Center at the University of North Carolina at Chapel Hill, which supports strug gling minority businesses by teaching them business and management skills. “In an era of devolution at the fed eral level, with fewer and fewer dol lars coming from the federal govern ment to address community prob lems, the nonprofit sector is going to have to address more of those prob lems and be more entrepreneurial to raise money to meet that mission,” says Johnson. “Competition is going ENTREPRENEURIALISM to become more intense.” To become entrepreneurial, a nonprofit first must examine the entrepreneurial and business skills of the existing staff and board, says Johnson. TTien it may need to recruit staff with those skills and train exist ing staff. Beth Briggs, president of Creative Philanthropy in Greensboro, says as more nonprofits boast professional administrators at their hehns and increasingly sophisticated boards, they have the abihty to step back and look at the big picture of fundraising. “Today they have business sense and they have people thinking about where the money is going to come from and what they can do to get it,” says Briggs. To look ahead, nonprofits need to draw up a strategic plan, keeping clearly in line with the mission of the organization, she says. “Nonprofits need a strategic busi ness plan and need people on the board who understand how to run a business and how to meet the bottom Une year after year,” says Briggs. Increasingly donors are looking for business objectives and a soUd plan before investing their money in the oiganization because many come from well-run organizations, says RELATED STORIES I Going into business . . . .page 3 I Nonprofits collaborate . .page 4 Briggs. There are a number of initiatives emerging around the country that pair nonprofits with businesses that can share their know-how with non profits. On the West Coast, about 150 soft ware millionaires have formed Seattle, Wash.-based Social Venture Partners, which works to encourage Look for TRENDS, page 5 Lifetime of quiet charity Blumenthal receives philanthropy award The chief executive officer of Radiator Specialty Company and head of the Blumenthal Foundation has spent a life time helping others. By Patty Courtright Charlotte In quiet ways Herman Blumenthal has made a big difference in North Carolina. For more than 50 of his 83 years, the Charlotte businessman and philanthropist has supported a wide range of civic institu tions and programs designed to help the state’s nonprofit sector. For his contributions, Blumenthal received the Philanthropy News Network’s 1998 North Carolina Philanthropy Award. The award was to be presented to Blumenthal by Hugh McColl, chief executive officer of Bank of America, at the Oct. 29-30 “Nonprofits and Technology” conference sponsored by the Philanthropy News Network. Blumenthal’s son Philip explains that his father came from a family that empha sized the importance of working for the community. The phi losophy started with Herman Blumenthal’s par ents, Lithuanian immigrants who settled in Savannah, Ga., in the early part of this century. “It’s nice to be honored, but he feels it’s our obligation to work on behalf of the com munity, especially when there are so many organizations that need help,” Philip Blumenthal says. For many years, the Blumenthals have given back to the community. In 1953, Herman Blumenthal Blumenthal and his brother I.D. established the Blumenthal Foundation for Charity, Religion, Education and Better Interfaith Relations. The foundation has supported pro jects promoting leadership, education, the environment, the arts, family and health ser vices, literacy and reUgion. In a 1997 interview on the North Carolina Public Television program “North Carolina People,” Blumenth^ said: “It came naturally to give away money and enjoy it. And we do enjoy it.” In 1978, 40 years after joining the family business, Herman Blumenthal took over direction of both the foundation and Radiator Specialty Company, which his brother I.D. had founded in 1925. The company’s first product was a powder radiator sealant. The company since has expanded into five operating divisions that provide 5,000 automotive, plumbing and hard- Look for BLUMENTHAL, page 8 Duke University targets individuals in capital campaign By Emily Brewer Durham Duke University will rely in large part on an effort to boost the support the school receives from individuals as it pur sues the largest fundraising drive con ducted by a Southern university a $1.5 bil lion capital campaign. In the past, approximately one-third of donations to Duke have come from indi viduals, says Robert Shepard, Duke University’s vice president of develop ment. “The percentage of donations from individuals has been less than other insti tutions of our type,” he says. That’s largely because Duke is a younger school than other large research universities, and therefore has a younger alumni base, says Shepard. But the five-year campaign publicly Look for DUKE, page 20 Fundraisers need to have a handle on the name game By Patty Courtright Fundraisers need to take care when offering to name buildings or other facilities after donors, say development officers who have used naming rights in their fundraising efforts. Experts give three fundamentals for using naming rights as part of a fundraising campaign: planning, com munication and consistency. Long before a campaign is launched, experts say, an organiza tion should take a look at itself and what it wants to accompUsh. During this process of self-exami nation, the organization looks reaUs- tically at whether it has the resources and personnel to spend the necessary time and energy, says Richard Hoffert, executive director of the North Carolina Symphony. Then, it must make sure the gov erning board is in favor of the drive and has discussed specific needs and whether outside help is required. This is when the organization deter mines the amount of money neces sary to support the mission and pin points how the money will be used, he says. Board support at every step of the process — before and during the campaign — is crucial. Organizers should work with their governing boards to develop clear pohcies and procedures that define the ground rules under which dona tions are received and processed, says David Winslow of Winslow- Considine in Winston-Salem. “Always try to anticipate as many questions as might arise through your policies and procedures up front, before the campaign begins,” he says. This is especially important when naming rights are involved. “UTtimately, when one is receiving a gift and, in return, giving recogni tion for the gift, it’s something that will impact on the organization tor years to come, so it affects the gov erning board as well as the organiza tion itself,” Winslow says. Just how does an organization decide its gift categories and levels required for naming rights? It’s a combination of art and sci ence, Winslow says. First, he says, make projections of the size and number of gifts neces sary for a successful campaign. Take into account that some donors are capable of making much larger gifts than others, he says. Then look at the structure’s floor- plan and assign dollar amounts to the various parts of the building as well as the gift required to name the entire building. “This is where the art form comes Look for NAMES, page 8 INSIDE Opinicr, 10 Grants & Gifts 14 In November 15 People ■.....’ 15 Professional Services..!£ 1 NONPSOFtlS 1 FOUNDATIONS { OPINION 1 FUNDPAtSING Six agencies across the state partner The Community Foundation of Four fundamental principles guide Charitable Remainder Unitrust can with N.C. State University to modify Western North Carolina celebrates collaborative leadership. direct unused retirement funds from homes of the disabled. 20 years and large growth. A column by Hank Rubin I.R.S. to charity 1 Page 4 S Page 6 1 Page 10 H Page 12

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