November 29, 2007

Enough to go around?
With a rash of nonprofit building projects and capital campaigns in New Hampshire, are there enough donor dollars for everyone?
By Heidi Masek hmasek@hippopress.com

It seems like everywhere you turn these days, some nonprofit is starting or finishing a capital campaign. Hard hats are everywhere. With such a rash of building and expanding going on, one would think that perhaps, just maybe, there will be less funding to go around.

It turns out that the number of nonprofits in the state has grown substantially in the past few years. But whether donors are being stretched by big campaigns or more groups clamoring for cash depends on who you ask.

Growing sector
There are about 7,000 charities registered with the state’s Department of Justice. Since 2001, the number has increased by an average of 440 annually. It averaged an increase of 250 annually before 2001.

“The nonprofit sector or charitable sector is really undergoing profound change,” said Micheal DeLucia, director of DOJ’s Charitable Trusts. That’s just registered 501c3s. Municipal trusts, trade groups like chambers of commerce, private foundations and religious organizations aren’t included.

There are 10,856 nonprofits registered with New Hampshire’s Secretary of State. In 2005, 1,608 new ones registered, and 1,834 did in 2006. So far 1,337 have registered in 2007, but there’s usually a year-end rush.

Nationally, the number of nonprofits grew by 36 percent from 1996 to 2006, according to the Urban Institute. In New Hampshire, the increase was 38 percent while the number of 501c3 public charities in the state grew by 72.8 percent.

“So it’s harder and harder because there are more and more groups,” said Angel Colarusso, director of development and marketing for CATCH (Concord Area Trust for Community Housing) in Concord. She’s worked for nonprofits for 10 years.

There are other changes to the fundraising environment.

“You can’t necessarily rely on state or federal funding anymore,” Colarusso said. Additionally, when local businesses are bought out by national companies, it can impact local nonprofits soliciting sponsors. National scandals related to nonprofits make fundraising hard, too. “Credibility is not assumed anymore,” she said.

The Corporate Fund is a small grant program run by New Hampshire Charitable Foundation “on behalf of about 12 of New Hampshire’s most generous companies,” said Ellen Koenig, who administers it. The number of applications it saw averaged about 60 to 65 until about three or four years ago when the average jumped to about 100 and stayed there, she said. Needs are greater each year because of state and federal cutbacks, she said. The Corporate Fund can award money to about 30 organizations, which means it’s gone from filling half of the requests it gets to less than a third.

Lucky Concord
The state capital, which has an estimated population of more than 42,000, is a prime example of a place where there’s been a rash of capital campaigns, construction projects and major fundraising. The Christa McAuliffe Planetarium broke ground on an addition, the Alan Shepard Discovery Center, this fall, using public and private funding sources. Red River Theatres opened this fall, thanks to a capital campaign. New Hampshire Public Radio fundraising is ongoing. The Society for the Protection of New Hampshire Forests added a LEED-certified wing to its Concord headquarters in 2001. It wasn’t too long ago that there were major campaigns going on for the Capitol Center for the Arts and the Concord Community Music School, said New Hampshire Audubon president and CEO Rick Minard.

“It’s remarkable that Concord has been able to create organizations this vibrant,” Minard said.

“Many of the people who have given to New Hampshire Audubon have also given to those [other] organizations,” Minard said, noting that it’s not too surprising that people who are passionate about arts and music are passionate about the environment. “I suppose there’s a degree of competition” for dollars, Minard said.

The New Hampshire Audubon had to lay off employees in August, months after finishing a new addition to its headquarters in Concord, now called the McLane Center. But whether recent capital campaigns impact other fundraising is “unknowable,” Minard said. There are several factors. The donor community in New Hampshire has a diverse range of interests and giving ability. Stock market performance affects endowment performance.

The Audubon layoffs were “in some degree a response to weaker philanthropy,” Minard said. They Audubon is paying about $300,000 annually toward its mortgage for the McLane Center. The project had suffered cost overruns, and other projects at Audubon centers in the state also required funding. Mortgage costs indirectly contributed to the financial problems that led to layoffs.

The New Hampshire Audubon is almost 100 years old and has 4,200 member households. Of its almost $3 million annual budget, its leaders try to raise about a third from philanthropy, including membership dues, annual fund donations, bequests and corporate sponsorships. Grants and contracts for science team work cover another third. The rest is income from program fees, camps, school groups, birthday parties and other events.

Fundraising success determines what Audubon can offer or accomplish the next year, Minard said. The group is on target for this year and is hoping for significant year-end donations.

“The McLane Center is proving to be a remarkably good facility for meeting program needs,” Minard said. It added classroom and meeting spaces and brought the staff together under one roof. Audubon is trying to retire its building debt quickly in order to invest more in programming.

Catch up
Nonprofit consultant Mario Capozzoli of Sunapee said that concurrent capital campaigns might not affect each other. A hospital building a new wing looks for local funding while a nearby college taps alumni who might not be local. Sometimes running concurrent campaigns can actually raise the profile of each.

Capozzoli said New Hampshire lagged behind other New England states in terms of number of capital campaigns until the past few years. He credits more education for nonprofits. They are realizing “they can raise the dollars, like the other organizations can,” Capozzoli said.

Nonprofit consultant Bill Dunlap of Amherst said he hasn’t seen a marked increase in capital campaigns. Higher education in particular always seems to be conducting a campaign or planning one. Hospitals have been building frequently, too, but this has been going on for the past 10 to 15 years, Dunlap said.

“I do think there’s a lot of competition for capital campaign dollars,” Dunlap said. Yet he also thinks many are doing well and there’s philanthropic interest.

Needy pols and the tax-free factor
“State government takes a minimalist role in New Hampshire and leaves many important operations that we could call public services ... to private philanthropy, and that’s the environment we work in,” Minard said. Some of the Audubon’s conservation and research or education programs would be covered by fish and game or education departments in other states.

“The nonprofit sector does an awful lot in the U.S. over and above what government does and corporations do,” Dunlap said.

There’s another competing factor in the first-in-the-nation primary state: New Hampshire residents are often hit up for donations by political campaigns, Capozzoli said.

Manchester impact
Henry Fuller left more than $40 million to the Currier Museum of Art in 2001. The museum is set to reopen in the spring, after a major expansion. The Fuller family also left an endowment to New Hampshire Institute of Art. The school is looking to grow, having already added buildings and dorm space. DeLucia said those endowments, through the art college and museum, should impact the quality of life in Manchester.

An 1890s bequest for a home for elderly women resulted in the Mary Gale Home in Manchester. The $10 million from that institution’s sale years ago became the Mary Gale Foundation. It grants money annually for the care of elderly citizens in their own homes. That’s created a wider impact than the home had for the ten or so remaining residents, DeLucia said.

In more recent news, Adam Sandler gave $1 million to a Boys & Girls Club of Manchester capital campaign, said executive director Gary Frost. The Club wants to increase its annual membership to 4,000. Its leaders have raised about $4 million in the past year and a half. The campaign went public a few weeks ago. The plan is to raise $6.6 million total. The money will pay for renovations and a 15,000-square-foot addition to the Club’s Union Street building and increase its endowment.

In Nashua, Rivier College’s first capital campaign surpassed its $7 million goal through pledges in August. The funding is for improvements and planned growth overall, including academic, athletic and recreational facilities, technology, programming and scholarships.

A bigger purse
The New Hampshire Charitable Foundation has seen an increase in contributions — to $35 million in 2006 — and investment performance at 14 percent in 2006. It had more than $407 million in assets in 2006.

Since charities own stock, the general state of the stock market impacts endowments. The 501c3 nonprofits registered in the state held $14 billion in total assets in 2006 according to the Urban Institute. That doesn’t include religious institutions.

On the other hand, a lot of those assets are in property. Some places, like Saint Paul School or Dartmouth, hold significant endowments, but many charities don’t. “You begin to think it’s a wealthy sector,” DeLucia said, but many charities face complex challenge.

Yet there is an expectation that there will be extraordinary growth over the next 30 years as the Baby Boomers begin to retire and make their bequests, DeLucia said.

Capozzoli said there are other dynamics that come into play in New Hampshire giving. There’s a lot of wealth and education in the state — and many second homes. Owners might be more apt to give to their hometown nonprofits. For example, Sunapee is trying to get a new library built, which Capozzoli thinks will be challenging since its summer population is double its winter one.

The New Hampshire Center for Nonprofits doesn’t monitor capital campaign effects, but Mary Ellen Jackson, executive director, said she’s heard the number of campaigns has increased, particularly in areas where nonprofits have received campaign training.

“Right now I’ve been hearing that it is a positive giving environment,” Jackson said. Corporate giving was up 4 percent this year according to the Chronicle of Philanthropy, she said.

Jackson said the challenge for nonprofits is to branch out. There are people or businesses who have never been asked, she said. “You’re actually inviting people to take part in whatever your mission is,” Jackson said. She said she has heard that in certain areas of the state some of the same donors are being asked repeatedly, particularly individual philanthropists. Banks, corporations and many foundations are fairly clear on how they give, Jackson said.

“It’s a very small state and people get to know who’s out there,” Jackson said. But philanthropists are also clarifying what their passions are, she said.

The grants awarded by New Hampshire Charitable Foundation have increased. It made 2,842 grants to nonprofit organizations in 2006, and 2,700 in 2004. The dollar amount awarded is also growing, Hopkins said.

Some of the new nonprofits are actually existing out-of-state ones now registering in New Hampshire.

Corporate trends
There is only so much that Verizon Foundation allocates toward grants. Now it’s spread thinner, said Jill Wurm, the public affairs director for Verizon in New Hampshire. As Verizon has increased its business involvement in other states, the amount available to give in New Hampshire has been reduced by 4 to 5 percent annually for the past three years, Wurm said.

“With a decreasing dollar pool and increasing number of requests we really look for the best fit,” Wurm said. Verizon’s focus areas are literacy and domestic violence, so it seeks to support programs that help build literate communities or improve family safety and health.

Kathleen Reardon, director of public affairs and community relations for Citizens Bank in New Hampshire, said there’s been a steady increase in requests in the past five years. She’s also seen an increase in the amount requested. The Bank probably funds two out of three proposals.

“Our giving to the community is based on our ... success in the community as well,” Reardon said. In the past several years, the company’s giving has increased. Citizens considers local economic factors when deciding how to give, such as the Berlin mill closings.

“We say yes to everybody,” said Stephen Singer, president and owner of Merchants Automotive Group. Singer said requests have been pretty constant. “The phone rings every day,” he said. He likes to give to organizations in his own community, particularly those that benefit children. The company is now working with the Salvation Army Kettle Campaign, the Chanukah at the Palace event and a warm clothing program. The Singers don’t just donate money; they provide “lots of what we call sweat equity,” Singer said, such as bell ringers for the Salvation Army. They helped coordinate one of the area’s biggest single-day blood drives.

“There is no end to the good causes that you can help underwrite in our community,” Singer said. “

Mission and tactics
“I don’t know if there’s ever a good or bad time” for capital campaigns, Frost said. “You look to your past supporters ... to who’s willing to step up [and] make [a] bigger contribution,” Frost said.

Capital campaigns are very goal-focused, and donors can quickly understand them, Jackson said. Part of becoming sustainable as an organization is securing a building.

“People like to give to capital campaigns, but at same time people give to what’s important to them,” said Sarah Denmark, director of development for Families in Transition (FIT) in Manchester. “Money follows relationships, money follows passion. You have to care about the cause,” Denmark said.

FIT, like Boys & Girls Club, is facing increased need for services.

“The needs certainly are greater in the community than they have ever been,” Frost said. “It’s always a challenge raising money ... there’s certainly more nonprofits out there than ever before,” Frost said. “If folks in the community are willing to support your mission, I think that’s key to making any campaign successful,” Frost said.

“I think it’s our job to deliver programming that matters, to do it well, and to demonstrate that we’re going to use people’s money wisely and efficiently for purposes that they value, and if we do that they’ll support us,” Minard, at New Hampshire Audubon, said. “And it’s my job as president to balance what we want to do with what we can afford to do,” Minard said.

Jackson said the NH Center for Nonprofits is working on preventing duplication of services: “You don’t want to water down the effort.” The Center recommends partnering with existing nonprofits rather than starting new ones when possible. There’s also some movement for shared resources — putting several nonprofits under one roof to share resources like bookkeeping and reception.

Easter Seals works with many service providers: “Donors like to see collaboration,” said Karen Van Der Beken, senior vice president of development and communications.

Van Der Beken said Easter Seals has so many programs that help a range of people that it has been fortunate to attract a number of donors. It supports services for newborns, special education, seniors, transportation and more. Donors often lean toward one or more, and Easter Seals hasn’t seen a drop in fundraising dollars.

Dunlap said in capital campaigns the bulk of giving comes from people already familiar with the institution. Organizations that are successful with capital campaigns are successful with annual giving.

“Donors tend not to give to organizations that solicit them out of the blue,” Dunlap said.

Van Der Beken explained that Easter Seals uses fundraising events to familiarize people with Easter Seals’ work. If people want to get more involved, there are a number of ways to help out. The VIP campaign uses teams of individuals who raise money annually with events like chili cook-offs. The President’s Council is a major gifts recognition club. There’s also planned giving — leaving money or other assets to a nonprofit in a will through various tools.

Jackson said the Chronicle of Philanthropy reported that more donors are relying on the Internet to investigate where they want to donate. Online giving rose to 37 percent in 2006 in the U.S., according to the Chronicle. So investing in technology is important to nonprofits now, Jackson said.

The Corporate Fund grants focus on capacity-building.

“This is really about building stronger organizations and stronger boards,” Koenig said. It’s hard money for nonprofits to find. “For a long time fundraising support was the largest request that we got,” Koenig said; now, organizations are seeking grants for things like Web site development and upgrades. Groups use Web sites as portals for donations and for ticket sales and members-only features.

“There needs to be a level of sophistication that wasn’t expected years ago,” Koenig said.