September 1996
Philanthropy Journal of North Carolina • 1 1
Funding questioned
after church burnings
In raising nearly $9 million to nelp
rebuild black churches destroyed in
fires, the National Council of
Churches has raised more money
than needed for the rebuilding - and
in the process boosted a previously
stalled campaign to raise money for
advocacy programs to' fight racism
and discrimination, The Wall Street
Journal reported Aug. 9.
“A close look at the NCC’s burned-
churches campaign provides interest
ing - and, for some in the charity busi
ness, troubling - insights about how
charity works in America,” the
Journal said.
“On one level it confirms the
perennial generosity of T^ericans in
opening their pocketbooks to worthy
causes or those in need. But it also
hi^li^ts what some fundraisers call
the “cause of the moment” phe
nomenon - the tendency of donors to
heap money on causes in the news
without regard to the amount actual
ly needed.”
The Journal cited critics who
“wonder whether the NCC’s pitch
might be too creative, particularly the
assertion that the church fires are
part of a national racist conspiracy.
“About 60 churches, most of them
housing black congregations, have
indeed burned since January 1995,”
the Journal said. “But law enforce
ment officials have eliminated more
than a dozen of those after determin-
ng they had nothing to do with
racism. Of the rest, virtually aU have
been ascribed to individuals or hate
groups acting alone; there is no cred
ible e'vidence of a coordinated
widespread conspiracy by white-
supremacist or other racist groups.”
Arts groups learn
to sink or swin
Foundations and local arts fund
ing agencies have begun using grants
as a stick to force arts groups to tight
en their bottom line. The New York
Times reported on Aug. 5. So-called
“stabilization” grants are designed
“to help recipients impose financial
discipline and institute long-range
planning,” the Times said.
“The soul-searching is more than
a form of institutional therapy In pon
dering the basics, arts organizations
often end up changing the makup of
their boards, devising strategies to
reach a broader audience and casting
about tor new income sources.”
The Times, which also found a
“growing acceptance of the notion
that some arts organizations can and
should die,” cited the Arts & Science
Council in Charlotte for encouraging
local arts groups “to seek areas in
which they could cooperate or, in the
case of groups pursuing identical
goals, to merge.”
Cheney cites donor
retreat from arts
Lynne Cheney, former chairman of
the National Endowment for the
Humanities, said in an opinion col
umn in The Washington Post on Aug.
11 that a sharp drop in individual con
tributions poses a huge challenge for
arts organizations.
Rather than relying on public
funding to survive, said Cheney, now
a senior fellow at the conservative
American Enterprise Institute in
Washington, arts organizations must
learn to compete in the marketplace
with offerings that earn the support
of arts patrons and customers, par
ticularly the baby boom generation
born between 1946 and 1964.
Cheney also suggested that arts
groups have not wanted to draw
attention to declining private support
for fear of making it “politically more
difficult to justify government under
writing.”
Agency leaves
United Way
Tracy Thompson, the new philan
thropy reporter for The Washington
Post, reported on July 20 that the
National Capital and Virginia division
of the Salvation Army was ending a
48-year relationship with the local
United Way “because recent changes
in United Way fundraising undercut
traditional inner-city social services.”
Under the United Way’s new sys
tem, the Post said, “more nonprofit
groups qualify to draw on the pool of
donations, and indi'vidual donors are
permitted to restrict their gifts to a
favorite charity or to one geographic
location. United Way says the
approach is more inclusive and
responds to what donors wanted.”
The change has had a “profound”
impact on traditional social service
providers, particularly those in the
inner-city, the Post said. In 1995, for
example, the local Salvation Army
received $71,173 in “undesignated”
funds from the general pool of money
the United Way divides among mem
ber agencies. That was down from
$376,589 in 1993.
IRS targets
excessive pay
A new federal law authorizes the
Internal Revenue Serivce to fine non
profit executives who receive exces
sive pay and benefits, along with the
officials who approved the compensa
tion, The Wall Street Journal report
ed on Aug. 7. The law requires that
nonprofits take steps to ensure that
compensation is reasonable.
Previously, the only saction available
to the IRS if it found excessive pay
was to revoke a nonprofit’s tax-
exempt status.
Spelman raises
$114 million
Johnnetta Cole, president of
Spelman College in Atlanta, was the
subject of a story July 31 in The New
York Times about a successful $114
million capital campaign by the his
torically black women’s college.
Spelman’s success “lifted it into
the rarefied fundraising world of elite
liberal arts colleges,” the Times said,
noting that Bryn Mawr recently
raised $92 million and Mount Holyoke
raised $139 million.
The Times said that Cole, the first
black woman to head Spehnan, made
140 solicitation visits throughout the
U.S. in the last year and a half - an
average of two a week - to corporate
and foundation chiefs and boards,
wealthy alumni and others.
Colleges focus
on community
The New York Times, in a special
education section on Aug. 4, featured
the trend in higher education that
tries to instill in students a sense of
social responsibility
“In recent years, as the demands
and definition of success have grown
more complex, American college edu
cators have been rethinking their
mission to students,” the Times
reported. “No longer is it enough,
many of them say, simply to equip
graduates with the academic skUls
necessary to excel in their chosen
careers.”
The newspaper said the trend
takes the form of “revamped fresh
men orientation programs with
emphasis placed on guidance, stu
dent seminars about character and
values, [and] renewed interests in off-
campus volunteerism.”
Lord
Continued from page 10
that foundations can play by directly
or indirectly urging nonprofits to
become active Internet users. It is
Important that foundations make a
determined effort to consider ways in
which the Internet has altered the
fields in which they work and to
develop thoughtful responses to these
changes.
Foundations must first realize
that the Internet is important to the
work of nearly every grantee. It is
tempting to fund organizations only
for programmatic activities, activities
that achieve concrete, immediate
results. But budding the capacity of
an organization, helping it to do its
work more efficiently and effectively
is an important goal as wed. The
Internet is a capacity-budding tool
that can dramatically improve the
work of nonprofits. As such, its use by
nonprofits merits support from foun
dations.
In addition to having concerns
about what outcomes might result
from funding nonprofits to use the
Internet, many foundations face the
more fundamental barrier of not
understanding the Internet them
selves. How can a foundation respond
intedigently to a request for funding
for an Internet-related project if it
does not understand the proposal?
Foundation staff and trustees
must learn more about the Internet,
even go on-line themselves, to become
famdiar with the benefits and chal
lenges it can offer grantees. By going
on-line, foundations also enrich the
Internet for nonprofits, providing one
more resource to tap as programs
and proposals are developed.
Once foundations begin to explore
ways in which the Internet can be
used and some of the challenges orga
nizations face in using it effectively
new grantmaking strategies can be
developed. Like all organizations,
foundations have their own missions
and methods of operating, and their
response to the opportunities pre
sented by the Internet wdl vary. But
certainly some wdl respond to the
need for initiatives in this arena and
wdl realize that nonprofits wdl be
much more willing to investigate
using the Internet in their work if
foundation support is forthcoming.
Caution is warranted. Going on
line wdl not be a high priority for all
organizations, and for those tor which
it is a priority, different levels of activ
ity will be appropriate. Foundations
should also state clearly their funding
priorities in this area and try to make
sure that nonprofits understand the
potential costs involved - in both
money and personnel time - and know
how much foundation support can be
expected. Nonprofits must not leap
blindly at an opportunity to explore
the Internet ■without facing the ramifi
cations of their actions.
Although beginning to use the
Internet can be chadenging for non
profits, the changing world in which
they work offers many new opportu
nities. Foundations must help non
profits move forward by enabling
them to explore the Internet and, if
appropriate, to incorporate this new
technology into their work. Only with
the support of their funders can non
profits reap the rewards of the
Internet.
Snow
Continued from page 10
free).
For some nonprofits, marketing
can expand to include sales -
ticket sales, product sales - online.
Why not?
Grants. CoUaboration online has
helped many agencies share informa
tion and draft documents quickly for
editing and revision, many times
making the difference between mak
ing a deadline and missing it. The
online environment - once the initial
face-to-face meetings are held - is
becoming a key to creating grant pro
posals.
There’s more, but you get the
point.
Now, about barriers. You don’t
need a Pentium 166 with a 25-gi!
byte hard drive and 64 megabytes of
RAM connected to ISDN. You need
just about any computer connected
with a 2400 baud modem to a tele
phone line. You can share your fax
line. A 2400 baud modem costs $10,
and comes with free communication
software.
In Mecklenburg County, we are
working with 25 nonprofit agencies of
different sizes. With the help of a
$5,000 grant from the Foundation for
the Carolinas, we have been provid
ing training, assistance and support
so these agencies can join the “elec
tronic culture”. They are learning to
use email, starting to collaborate, are
beginning to see the efficiencies of the
technology for both internal and
external uses.
We’re also working with homeless
agencies to help them share common
databases, among other things, and
with regional law enforcement agen
cies that need to communicate inex
pensively
But for all my exuberance, here
are some important cautions: The
Internet is not the Holy Grail. It will
not bring world peace. It has plenty of
limitations. It will not replace all face-
to-face meetings. It is a new medium
with its own limits and uniqueness. It
does require learning, buy-in from
staff and a commitment to sticking
with it. At first you might not see ben
efits, but they come. If you aren’t
willing to devote at least minimal
resources to it, then don’t do it. Wait
until you are ready to make a com
mitment.
One thing is clear, though: This is
NOT the wave of the future; it is the
wave of the present. Grab a board
and start surfing, or the wave just
might knock you over.
Budget
Continued from page 3
June MUby the commission’s pub-
iic information officer, says the deci
sion by la'wmakers to close down the
panel was a surprise.
But commission Co-Chair Carmen
Hooker-Buell, wife of UNC-CH
Chancellor Michael Hooker - says she
does not believe that decision reflects
a lack of commitment to address
health-care reform.
“My experience has been that
commissions have a certain lifetime,”
she says. “I don’t think anyone wants
any commission to live on in perpetu
ity. I think there are issues that this
commission can highlight for the
General Assembly - to provide them
with information and make recom
mendations for which functions of the
commission should be ongoing and
should probably be placed in a state
agency.”
HOUSING
State lawmakers agreed to place
$3.5 million in the Housing Trust
Fund and to allocate $3 million to the
Center for Community Self Help to
help expand its home ownership loan
program.
State housing groups had hoped
for $500,000 more for capacity-build
ing grants to nonprofits and another
$10 million to $12 million for the
Housing Trust Fund - which provides
money for affordabie housing pro
jects.
Linda Shaw of the North CaroUna
Low-Income Housing Coalition in
Raleigh says perhaps the most posi
tive result of the legislative session
was a commitment to consider a
study commission that would
research permanent sources of dol
lars for the housing fund.“If we can
get them to move on this, it would
really be the first time since the orig
inal study commission came up with
the trust fund idea in 1983 or 1984,
that the legislature will sit down and
take a serious look at housing,” Shaw
says. “And we really need that in
North Carolina.”
ACCOUNTABILITY
Lawmakers approved a Nonprofit
Disclosure/Accountability Act
designed to ease red tape for non
profits. The bill eliminates the more
complicated “yellow book” audit
requirement tor nonprofits that
receive less than $100,000 in state
grants. However, it mandates that
nonprofits receiving $15,000 or more
in state funds tile a detailed account
ing of finances.
The measure also reduces the size
and changes the wording of disclo
sure statements required on all print
ed solicitations or receipts sent out by
nonprofits.
Kendall, of the N.C. Center for
Nonprofits, says the ideas incorporat
ed into the act came from the input of
many nonprofits. The N.C. Center had
recommended the above measures to
the House Nonprofit Study
Commission, which accepted all three
recommendations.
In a separate measure, the
General Assembly exempted YMCAs
and YWCAs from the requirements of
the state’s Charitable Solicitations
Act, which governs nonprofit
fundraising.
SMART START
The General Assembly approved
$10.1 million for Smart Start expan
sion. That is $10 mUlion less than Gov.
Hunt had requested.
David Wdker, executive director
of the North Carolina Partnership for
Children - the nonprofit that oversees
the early childhood program - says
the money will allow 12 new Smart
Start partnerships to receive plan
ning dollars retroactive to July.
Eleven “third-year” Smart Start
counties will receive program dollars
beginning in January - sharing a pool
of $11.5 mUlion. And the state part
nership’s budget will grow by $1 mil
lion to $1.7 million in order to help
carry out new responsibilities man
dated by the legislature.
Had Hunt’s budget request been
approved, the third-year counties
would have received dollars retroac
tive to July instead of January and
money would have been available to
expand most of the 32 first- and sec
ond-year partnerships, Walker says.
Under the approved budget,
Mecklenburg and Cumberland are the
only “pioneer” Smart Start counties
that receive expansion funds. In
aU, 55 counties will have Smart Start
funding this year.
Smart Start leaders still will have
to raise about $7 million in private
funds and in-kind contributions to
ensure state funding for the program.
The N.C. Partnership’s contract with
Raleigh fundraising consulting firm
Capital Consortium runs out in
October. After that, the firm will con
tinue to advise Smart Start, but on a
more limited basis, Waiker says,
because the state partnership is in
the process of hiring a full-time devel
opment director.
Board of Advisers
jowe Fitzpatrick
Bartsara Ffedmari
James fioodmon
CoftnrteAllai
Meiityn Hartman
vviiam Aftlyaa *
NatSwn
George Autiv
Janefendall
JoFiri m
Thomas Umbeth
David Benefldes
Elizabeth locke
Rhitip Slumentha!
Michael Marsicar.0
William Bondurant
Todd Miller
fertneth Srowi
JVlsfy
BBS
johr-Nifalock
. ■
Mtchael Rose
Sbamon St. John
JdiaFSriigls?i;;iT
Chate Sanders
dofea DdrS® ;;”:;;: ; ); '
Donald Sanders
Mary D.B,T, Semans
■
iMartidlliSiTTC
Sherwood Smith
iBfccNeiStifWgliiBi:
Wiliam Spencer
Gayle Williams
SmedesYork