Raising Money for Nonprofits in Terrible Times

Feb. 12, 2009, Forbes — Julie Lucas, the head of fund-raising for Fordham Law School, is trying to raise $100 million at a time when few people are giving money and universities are still seen as having lots of it.

How does she do it? First of all, she goes to where the money is now. The career fundraiser put together a list of tips for her staff about how to raise money in tough times, and No. 3 was "Follow the market."

That led her to approach a firm of bankruptcy lawyers, since they're doing better than just about any other lawyers these days. After lengthy meetings and much explanation about where the donations would be spent, she got $1 million for the school from lawyers at Weil, Gotshal & Manges. And that was in December, one of the worst months of all 2008.

"I've always said to my staff that 75% of your job is pounding the pavement," Lucas says. She started her $100 million fund drive four years ago and is up to $79 million now, with three years left to go. "In tough times you have to go back to the fundamentals. It's all about relationships."

Nonprofits are in trouble just like profit-making businesses. According to the Bridgespan Group, a consulting firm, 75% of them have been hurt by the economic downturn, and 52% say they have less money now--half of those losing 10% to 20% in revenue and a quarter losing more than 20%.

Most are battling not only declining revenue but also rising demand for their services. As a result, their fundraisers are having to come up with novel ways of bringing in cash. Some are working with former donors, now laid off, to see if they can give amounts that won't break their wallets. Others are going after non-traditional groups. Or they're turning to social-networking sites and other modern technology.

At the United Jewish Appeal's UJA Federation of New York, many of the donors were burned in the Bernard Madoff scandal; others have lost their jobs and can't afford to give what they used to. The group has retooled its efforts so it can stay involved with those newly unemployed, both to assist them and to find ways in which they can still contribute.

"The mantra of our fund-raising campaign for the next few months is that it's 'for those who can,'" says Stuart Tauber, a senior development official at UJA-New York. He says the demand for UJA's services, like providing food to needy families, is increasing as local, state and federal governments cut back. "This is a perfect storm situation. There's no softening of the blow now, and it's coming from every side."

Tauber rejiggered the group's annual Wall Street dinner this winter to allow former donors to attend even if they'd lost a job or all their money. More people participated than before, and though the event brought in 13% less than the year before--$18.8 million--Tauber says it did far better than if those people hadn't been there at all.

Younger members helped pick up the slack, though in the past they had been largely ignored. "In general, we never thought of the younger community," Tauber admits. Just reaching out to them and encouraging groups of them to join up to pool their resources brought the UJA $350,000 in donations.

A big way to engage younger donors has been through technology. The United Nations Foundation, which was launched 10 years ago with a $1 billion gift from media mogul Ted Turner, has its own YouTube channel, uses Twitter and makes videos to document how its money is spent. "You've got to go where the people are," says Kathy Bushkin Calvin, the organization's chief operating officer.

The foundation gets $50 million a year from Turner's initial gift, but it has recently had to start reaching out to less wealthy donors as the demand for its services has increased. One way it has done this is by keeping all its campaigns very easy to understand and capable of working with various media platforms. For instance, the Nothing But Nets campaign, in support of anti-malaria netting, uses YouTube, Twitter, Facebook, MySpace and ThinkMTV.

Being direct with potential donors is key too. "People are moved to give, but they need a price point to get involved," Calvin says. She has set a low price point for Nothing But Nets, $10, which pays for one net and its delivery and installation. The project has raised $20 million so far, and more money came in in December than in any other month since 2006. "There is still a desire to be engaged."

Calvin says a new tack with more affluent givers is to draw on the many partnerships the United Nations Foundations has and network donors across them. For instance, she'll reach out to those who gave to the International Red Cross and get them involved with other organizations that deal with world health. "All of those levels of engagement are really important," she says.

Hard times have also brought fundraisers back to essentials--and even to some of the old-fashioned approaches. Julie Lucas, at Fordham Law School, has turned to tithing, which usually means churchgoers pledging percentages of their annual incomes to their places of worship. She managed recently to persuade several multimillionaires to give Fordham 1% of their incomes for five years.

"You have to talk business," Lucas says. "You have to be specific. If you never ask, people are never going to know what you need."