January 1997
Philanthropy Journal of North Carolina • 7
Strategic grantmaking
Programs maintain
donor confidence
If you
think
making
t h e
grant and asking for a report is
enou^, think again.
In these days of cost sensitivity
and media pursuit of the story it is
arguably shortsighted to make a
grant to anyone who can just write
persuasively Your efforts in building
donor confidence and maintaining
fiduciary responsibility are both at
risk when grantees require continual
funding infusions just to stay alive.
Two for-profit parallels illustrate:
First, unstable firms cannot con
sistently deliver quality service; this
conflicts with consumer expectations
and often results in loss of market
share. The same is true for nonprofits
that fail to meet their service commit
ments. When poor financial manage
ment results in unmet objectives, the
result is a “sUppery slope”; Revenues
may deteriorate because of losses in
contracts, donations and grants.
Second, a company marginally
affiliated with a firm with poor opera
tions finds that both firms’ stock
price can be negatively affected when
the affiliate’s bad news is released.
Likewise, a grantmaker that associ
Brid^et E. Robinson is director
of Precision Management
Advisors, a nmnagement advisory
firm in San Rafael, Calif, that
kelps community-based oragniza-
tions achieve financial stability.
She may be reached at (415) 464-
1060, or by e-mail at
WeAdvise@aol.com.
ates with a deficit-ridden agency may
be implying irresponsible fund stew
ardship to the public, thus affecting
donor confidence and possibly subse
quent donations to the grantmaker.
Adding to the complexity, if poor
financial management becomes pub
lic, a community based organization
actually may become more dependent
upqn you if public outcry results in a
M in the organization’s direct con
tributions. Fortunately, the solution is
straightforward.
Grantmakers should fund stabi
lization grant programs.
Grantmakers are in the most pow
erful position to influence improve
ment because you are the often the
primary “customers,” deciding
whether or not to fund.
Also, change needed in some orga
nizations requires a good amount of
investment. Requiring highly skilled
technical assistance as a condition of
the grant, whether throng additional
internal hires or external consul
tants, is absolutely necessary to
ensure meaningful and lasting
improvement.
There also is evidence that grant-
makers are successful as stabiliza
tion proponents. As reported in
Philanthropy News Digest,
.(Foundations Encourage Arts Groups
to Develop Financial Discipline,
August 7,1996), “cutting edge” foun
dations are pushing their grantees to
improve their financial situation. In
particular, the National Arts
Stabilization Fund requires gi-antees
“to reduce debt and define clear
objectives.” Others, seeing the bene
fits, including the Ford Foundation,
the Haas Foundation and the Pew
Charitable Trusts, also provide stabi
lization grants. The question will
soon become “when and how” not “if”
stabilization will be widely funded.
As government social programs
continue to shrink, the pubMc increas
ingly win see personal and corporate
giving as major vehicles by which
social and cultural needs are fulfilled.
Evidence to support this contention
comes from the Independent Sector’s
recent survey, “Giving and
Volunteering in the United States,”
which indicates that, controlled tor
Inflation, annual charitable contribu
tions increased 10 percent from 1993.
The survey also found that 31 per
cent of respondents - up from 20 per
cent in 1990 - disagreed with the
statement “most charitable organiza
tions are honest and ethical in their
use of funds,” - thus implying a
decrease in donor confidence.
Together, these findings point to a
growing “fiduciary expectation”, even
as grantmakers try to operate within
self imposed fiduciary responsibility
The problem for grantmakers is that
donor confidence drops when fiducia
ry expectation is not met: The United
Way provides a recent illustration, as
their donations have dropped signifi
cantly since the public uproar over
the financial scandal involving
William Aramony the organization’s
former president. Are you next?
. Stabilization grants build donor
confidence. Demand better from your
grantees, but enable them to succeed.
Although they may groan a bit at
first, as managers they will gain ten
fold from improved financial stability
better overall communication and
reduced stress.
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Carter
Continued from page 6
The Winston-Salem Foundation
dates back to 1919, when it was
established by Wacho\ia Bank. Bank
officers ran the foundation’s grant
making until 1964, when the first
executive was hired. In 1995, the
foundation gave away $6.1 million in
grants to nonprofits.
Under Carter’s leadership, the
foundation has launched new initia
tives to fund programs addressing
race and economic development and
has reached out to donors to try to
encourage more charitable giving.
“We’ve moved from a much more
conservative stance to the point
where we are wfiling to take a stand
in the community,” he says.
Wierman, who has been with the
foundation for ei^t years, says those
efforts will continue.
“Our mission is permanent philan
thropy,” he says. “TTiere are more and
more challenges facing nonprofits in
terms of what they are being asked to
do. That’s a challenge for this founda
tion and others to find better ways of
being of value to nonprofits.”
Before joining the foundation’s
staff, Wierman, 33, worked in the
development office at the University
of North Carolina at Chapel Hill. He is
a 1985 graduate of the university and
also holds an MBA degree from Wake
Forest University.
In addition to his leadership of the
foundation, Carter - who will be 65 in
March - has also been active with
other philanthropic organizations,
including the Winston-Salem donors
forum, Forsyth County Smart Start
and the national Council on
Foundations.
He hopes to continue to play a role
in the state’s nonprofit sector,
althou^ he is also looking forward to
a much lifter schedule.
“The thing I really want to do most
of all is travel,” Carter says. “I’m
going to learn how to play.”
Arts
Continued from page 6
will teach artists how to use the World
Wide Web. Charlotte’s Web is one of
the mentor sites.
The two-pronged approach is
aimed at encouraging more arts
groups and artists to go online and to
make the arts more available to the
general public.
“The National Endowment for the
Arts was created to make the arts
accessible to all people of all back
grounds in every district of the
nation,” says NEA Chair Jane
Alexander in a message on the
endowment’s Internet home page.
“Open Studio is a groundbreaking
project that will increase cultural and
arts resources on the information
superhighway.”
In addition to selecting Chariotte’s
Web as a pOot site, the Open Studio
program has other Tar Heel connec
tions. Anne Green, a graduate of the
law School at the University of North
Carolina at Chapel Hill, has been
hired as project coordinator for the
program.
Other pilot sites for Open Studio
are; Mentor Sites - Breakaway
Technologies, Los Angeles; Carnegie
Mellon University, Pittsburgh, Pa.;
Access Sites - 911 Media-Center,
Seattle; Beacon Street Gallery,
Chicago; Cambridge Community TM
Cambridge, Mass.; DiverseWorks
Artspace, Houston; Hult Center for
the Performing Arts, Eugene, Ore.;
Lewis & Clark Library, Helena, Mont.;
Metro/Dade Arts Council, Miami;
Minneapolis Institute of the Arts,
Minneapolis; Schomburg Library, New
York, N.Y.; Telluride
Institute/InfoZone, Teliuride, Colo.;
and Topeka and Sbawnee County
Public Library, Topeka. Kan.
Remaining pilot sites in all 50
states will be selected throng a com
petitive process, with awards to be
announced in February
To apply, send email to mentor-
rfp@benton.drg (for mentor awards)
or accessrfp@benton.org (for
access awards). For information on
Open Studio, c^l Green at (202) 638-
5770.
Barbara Solow
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