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
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AURKETING AND DEVELOPMENT DIRECTOR
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BARBARA SOT^W — (919) 899-3745
mAEEwiwmmk
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PAGE DEEIGNER
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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