10 • Philanthropy Journal of North Carolina Opinion August 1996 Philanthropic politics Putting the brakes on fundraising frenzy Fundraising is spinning out of control. Funders have an opportunity to restore civility and fairness to the process. Nonprofits are more aggressive than ever in raising dollars. The fundraising profession is more sophisticated and using more advanced techniques and technology Funders fuel the competition by making grants that help non profits do a better job of raising dollars. And nonprofits that can afford to do so hire prbfes- sionai fundraising consultants that know^ howto work the system. All these developments have served to strengthen the nonprofit sector. A free market place demands heathy competition, and non profits must learn to survive. Still, as in the commercial world, competi tion in the nonprofit world can breed excess. Fundraising can become a racket, with many nonprofits dreaming up new programs simply to play to the priorities of funders. Many nonprofits also promise more than they expect those new ini tiatives to deUver. Funders, in turn, can reinforce this process. Some funders enjoy setting the agenda for the nonprofit sector, encouraging new initiatives through their funding priorities. The process of ev^uating projects also has fallen prey to the funding game. To justify future funding, nonprofits underscore their successes, however marginal they might be. And funders are only too happy to claim success for initia tives they helped to hatch. Much of this fundraising culture involves a relatively small circle of foundations and non profits that have learned to play the game and EDITORIAL engage in a kind of funding courtship. These organiza tions are savvy about the rules of the game, and grant seeking groups can be coldly combative when it comes to outsmarting and even harming poten tial competitors for dollars. Horror stories about savage competitive tactics are not uncom mon in the seemingly genteel circles of Tar Heel philanthropy. Not surprisin^y nonprofit leaders who are among the loudest to profess their alle giance to collaboration within the sector are only too willing to engage in whispering cam paigns and to sideswipe their less combative and less sophisticated competition in their rush to the funding trou^. Meanwhile, thousands of hard-working, forthright organizations strug^e to do their jobs and raise dollars the old-fashioned way by submitting grant applications according to fun ders’ guidelines. It’s time to stop the madness. Nonprofits need foundation dollars to survive and are not likely to soft-pedal their search for dollars. Any change will have to come from funders, which should discourage overstatement and hard-ball competition and encourage an open market place that is fair and that rewards hard work and worthy programs designed to help make our communities better places to Uve and work. Funders also should do all they can to rethink their preference for funding programs rather than operations. Often, a nonprofit will devote countless hours to designing a new pro gram intended to appeal to funders when all the nonprofit really needs is support for its basic operations. Such waste can be the first step in a vicious cycle. Part of the process United Ways play public policy role 'Thou^ few may realize it, the United Way is more than just a fundraising orga nization. Yes, local United Ways in North Carolina generate approximately $100 million eveiy year for human service needs identified by the local community itself. Making informed decisions about how to allocate these precious resources requires an understanding of the issues faced by the com munity, as weU as an understanding of the pub lic sector funding and policymaking processes. It requires involvement in public poUcy deci sion-making processes at the federd, state and local government levels. For United Ways, public policy is about developing relationships and sharing informa tion to ensure that basic human needs are met through the human services network in the local community As a credible and knowledgeable resource on the needs of the disadvantaged and the nonprofit resources available to meet those needs. United Ways have a responsibility to share their knowledge with policy makers as Pam Seamans is the public policy manager for the United Way of North Carolina and serves as the organiza tion’s lobbyist in the General Assembly. they consider how to develop the poUcies that influence the delivery of services and the alloca tion of public dollars. Whether we like it or not, there is no escap ing the fact that state and federal government actions affect the local community’s ability to meet its needs. Fbr this reason, it is just as important for United Ways and other local non profits to follow developments in Ralei^ and Washington, D.C., as it is in their home commu nity. There are several reasons ■v\diy the United Way is engaged in the policy process: • The magnitude of potential program changes resulting from “devolution” of respon sibility for human services programs from the federd and state level to the local level presents a unique opportunity for United Ways to take a leadership role in planning and implementing reforms in our communities. Local United Ways are situated to act as community leaders, convenors, and problem- solvers. United Ways’ specialized knowledge of the needs within our communities and our con tacts with business, government and nonprofit leaders make United Ways uniquely qualified to bring the varied Interests within a community together to develop solutions to problems plagu ing our citizens. • Devolution will likely lead to fewer dollars for human services programs. When govern ment cuts back on funding for human services programs, these programs look to organiza tions like the United Way to cover funding gaps. United Ways must pay attention to what hap pens to public sector funding so that United Way dollars are spent intelligently and effec tively, and United Ways and their agencies are not asked to do more than they realistically can. • The budgets of agencies and programs funded by United Ways are typically comprised of 40 percent to 60 percent public-sector dol lars. Because many of the a^ncies funded by United Ways do not have the resources to involve themselves directly in pubUc policy debates, providing information is a tremendous service to the community and the nonprofit sec tor. These same agencies often serve clients who are typically under-represented in the political process. United Ways must be in the business of giving a voice to those who could not othei^ wise speak for themselves. Another problem confronting some agencies is the appearance of self-interest if they debate funding or policy issues. United Ways can easi ly speak to the need for or effectiveness of a pro -am, without looking self-interested, giving additional clout to an agency’s argument. Involvement in public policy and brokering community collaborations brings credibility to United Ways in the eyes of the donor and the elected poUcy-maker. To the individual donor, we demonstrate that United Ways’ impact goes beyond just allocating dollars - that United Ways also provide a beneficial service to the community by bringing together business, gov ernment, nonprofits and other funders to address local Issues in a comprehensive way United Ways must demonstrate that a dollar given to the United Way goes farther due to our understanding of the community’s needs and our ability to bring the communify together. 'Ib the elected official we demonstrate that the United Way has a broader perspective than just our own self-interest of promoting and pro tecting the integrity and funding of human ser vice programs supported by United Ways. We demonstrate that we have a broader vision for our communify and our state and that we have the ability to marshal the necessary resources to act on that vision. We help to assure the non profit sector a seat at the decision-making table. 'The United Way system has been somewhat slow to realize its role and value in the public policy arena. Fbr too long. United Ways’ princi pal focus has been the bottom line - campaign goals and dollars raised. As a primary goal of the United Way, dollars raised should be a focus, but not the sole focus. Worthy of just as much attention is how to ensure United Way and all human service dol lars are put to good use and make a difference in people’s lives. To do that effectively. United Ways must he informed and active in the policy making process. 'Ib aid local United Ways in this endeavor, the United Way of America and the United Way of North Carolina, as part of a vertically seam less United Way system in this country, work in Look for SEAMANS, page 11 Philanthropy Journal Of North Carolina ■A-:.-' f :is4:i|0|llifyj|i|® "L private foiindatioB in Meigh, EC. ® V :'I1$e iHtoiifypy ; mmm .and puBusimn TODD COHEN — (919) f»9-3744 AURKETING AND DEVELOPMENT DIRECTOR MARGUERITE LEBIJiNC — (919) 899-3741 BARBARA SOT^W — (919) 899-3745 mAEEwiwmmk ASHLEY PEAY — (919) 899-3743 STEPHANIE GREER — (919) 899-3746 msscRimmm &PmMRENm i . KATE FOSTER CONNORS -- (919) 899-37.42 DIRECTOR OF NEW MEDIA SEAN BAILEY (919) 899-3747 PAGE DEEIGNER MICHAEL STANLEY - (919) 899-3748 JUDITH UTLEY - (919) 899-3740 Light of day To publish or not to pubhsh In July, the Journal reported the prelimi nary results of a study by the North Carolina Center for PubUc PoUcy Research on funding for the arts. 'The draft study found that increases in local and state funding for the arts have more than offset cuts in federal funding for the arts. Ran Coble, the center’s executive director, did not want us to report those results because they were preliminary and might change before the final study was released. 'The Journal, however, beUeves that even those initial results shed important Ught on a key issue facing the arts and nonprofits in gen eral; 'The impact of federal funding cuts. Further, our role as a newspaper covering the sector demands that we share timely informa tion with our readers. 'The disagreement over whether we should have reported the study findings arose partly because of the way in which the poUcy center prepares its studies. After coUectmg data and writing drafts of its studies, the center dis tributes the drafts tor review to dozens of mdi- viduals and organizations. In the case of the study on arts funding, a review copy was given to the Governor’s Business CouncU on the Arts and Humanities. ABOUT CHANGE We beUeve that the study was a pubUc record because it was in the hands of a state agency Coble disagreed but, in any event, provided us with a copy of the study and left it up to us to decide whether to report on it. The Center for l^bUc PoUcy Research was created to provide a source of information on pubUc poUcy independent of government, and its studies over the years have made a valuable contribution to public debate on numerous issues. We expect the forthcoming study on arts funding will do the same. 'That’s why we report ed on it in the July issue. And when the center issues its final version of the study - possibly with changes from the conclusions it’s made thus far - we’U report on that, too. The Journal’s debate with the pubUc poUcy center over whether to pubUsh the study is a good case study in how the interests of nonprof its and the media sometimes appear to he at odds. Coble was concerned that reporting on a draft study would be inaccurate. But we dis agreed. As a newspaper, we have a responsihiU- ty to pubUsh the best information avaUable so that our readers can engage in informed discus sion of issues - especially those important to the nonprofit sector. Coble also felt that the Journal would hurt its credibiUty and the integrity of the poUcy cen ter’s review process by pubUshing the draft study. Again, we disagreed. We beUeve our cred- ibUity depends on reporting what we know, when we know it. That’s our mission and it’s what readers expect - especiaUy readers in the nonprofit sector, which gets precious Uttle cov erage from the mainstream media. As for the center’s integrity and reputation, we beUeve it is precisely those quaUties that made the draft study worth reporting. As a nonprofit newspaper, ibe Journal plays a unique role in covering the state’s indepen dent sector - one that hasn’t been replicated anywhere else. We expect that discussions about our mission and our reporting wiU contin ue, and we welcome further debate on the mat ter. Todd Cohen

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