Prize-Winning Charities Face Many Challenges as They Try to Grow

As a car salesman in New Hampshire, Robert L. Chambers saw firsthand how some in the auto industry took advantage

of low-income people. He grew so weary of watching colleagues gloat about offloading junkers on the rural poor that he created a charity. His organization, Bonnie (Cars, Loans, and Counseling), provides needy people with budget counseling, negotiation assistance with car dealers, and guarantees for low-interest auto loans.

The group struggled for several years to expand its reach and meet its budget until it got an unexpected lift to its fortunes: Last year Mr. Chambers was named a finalist for the Purpose Prize, a contest that honors people age 60 and older who devise innovative ideas to help society.

Mr. Chambers parlayed the $10,000 finalist prize into at least $630,000 in donations, and he expects another $850,000 soon, largely the result of the prestige and publicity from the prize.

More than money has rolled in: Following a Time magazine article that was published after he was nominated for the Purpose Prize, Mr. Chambers received 42 inquiries from individuals and organizations seeking to spread the program beyond New Hampshire. A retired General Electric executive volunteered to help the charity’s overwhelmed staff handle the backlog of calls and other tasks resulting from the prize publicity.

Mr. Chambers is far from alone in his success. Jim Emerman, executive vice president of Civic Ventures, a San Francisco think tank that created the prize, estimates that the 2006 winners and finalists have raised $1.7-million in the past year.

Mr. Chambers, now 63, was honored as part of the inaugural competition for the prize; the second round of winners were announced this month.

The Purpose Prize was financed with $9-million over three years from the Atlantic Philanthropies, in New York, and the John Templeton Foundation, in West Conshohocken, Pa. The goal of the prize is to encourage more older people to develop new ways to help others.

Finalists like Mr. Chambers receive $10,000, while five top prizes, worth $100,000 apiece, are awarded each year. In addition, winners and finalists were eligible to get additional money from Civic Ventures through the Fund for Innovation it created with the some of the money provided by Templeton and Atlantic.

A Flood of Calls

While many of the people honored in the first competition say the prize has made a big difference in their ability to raise money and advance their goals, others say they had trouble handling the attention and trying to capitalize on it.

As word got out about the approaches the competition winners were taking to solving social problems, many of their charities were inundated with more calls and messages than they could handle. Journalists wanted to interview them, donors and volunteers offered their money and time to spread the ideas to their own communities, and people in need of aid demanded assistance.

Marilyn Gaston and Gayle Porter of Potomac, Md., co-founders of a program to help African-American women take steps to improve their health, were among the winners of the $100,000 prize last year.

“We didn’t have any staff but us, and we weren’t prepared for what was going to happen,” says Dr. Gaston, a former assistant surgeon general. The media blitz following announcement of the prize generated many requests to bring their Prime Time Sister Circles program to other cities.

“We got swept up in speaking engagements and answering requests,” says Ms. Porter, a clinical psychologist. Instead, she says, “we should have spent two days a week planning the business and developing an infrastructure.”

If the organization had devised a business plan before the announcement of the award, she adds, she and Dr. Gaston would have been in a position to approach major foundations and corporations and ask them to match the prize money.

“We could have said to them, ‘You have a vested interest in your employees’ wellness. Think what we could do with $500,000,’” says Dr. Gaston.

Focusing on strategic planning also became the chief concern for Mr. Chambers.

After he was named a finalist, he hired Andrew Wolk, a scholar of social entrepreneurship at the Massachusetts Institute of Technology, to devise a five-year strategic plan that will be put in operation this fall. The goal will be to spend the next two years expanding the group throughout New England, then to focus on spreading the idea elsewhere.

The charity intends to double the size of the staff from 13 to 26 employees as the organization expands.

With a nod to Civic Ventures’ goal of using older Americans’ talents, Mr. Chambers plans to hire retired social workers for counseling positions.

“With retirees, we don’t have to pay benefits, and we can offer people flexible work schedules,” he says.

Charles Dey, a $100,000 winner last year, also moved quickly to expand an effort he created, called Start on Success.

Operated by the National Organization on Disability, the program prepares high-school students with disabilities to enter the work world.

“In the last year our experience with Start on Success and the imprimatur of the Purpose Prize have given us credibility as we’ve sought more funding for employability programs for all working-age Americans with disabilities,” Mr. Dey says.

A dozen foundations have already contributed or are expected to soon provide money for an array of projects, including $3.2-million from several donors to establish three pilot projects for the Department of Defense to train seriously wounded veterans from the wars in Iraq and Afghanistan.

A former educator, Mr. Dey has also raised $240,000 from the Bush-Clinton Katrina Fund to bring a Start on Success program to New Orleans and $60,000 from the Healthcare Foundation of New Jersey for a similar effort in Newark. He is also discussing expansion into New York City with help from a $200,000 grant from the J.E. and Z.B. Butler Foundation, in New York, to be matched by other local donors.

To cope with the growth of so many programs, Mr. Dey and his colleagues have hired two part-time staff members and are in the process of hiring full-time directors for Start on Success and for the Defense Department project.

Not every Purpose Prize winner has turned the award into a cash bonanza.

Akbar Ahmed, a professor of Islamic studies at American University, split the $100,000 check with Judea Pearl, father of Daniel Pearl, a reporter for The Wall Street Journal who was murdered in Pakistan in 2002.

The pair were honored for starting a series of speaking engagements and discussions known as the Daniel Pearl Dialogue for Muslim-Jewish Understanding.

Mr. Ahmed recently started his own nonprofit group — the Center for Dialogue, Peace and Action — to further interfaith efforts, but has encountered difficulty raising money from Muslim countries, American Muslims, or foundations.

He says that is in part because American-style fund raising is not a part of Muslim culture, and that government scrutiny of charities that have anything to do with the Middle East has made people skittish about giving in the post-September 11 climate.

Mr. Ahmed, a former Pakistani government official and ambassador to Britain, also admits he has not been “proactive” in writing grant proposals. “My nightmare is that funds will run out, and I won’t even be able to pay the bare minimum to the interns who help me,” he says.

‘A Lifesaver’

Nearly all of the winners and finalists poured the no-strings-attached award into their causes.

“The prize money was a lifesaver,” says Conchy Bretos, former Florida secretary on aging, who was honored with a $100,000 prize for bringing low-cost assisted-living services to adults in public housing. Ms. Bretos, who runs a for-profit consulting firm in Miami Beach, spent $90,000 on the start-up costs of hiring staff members and buying food and supplies in a newly created assisted-living facility.

“Eventually, we’ll recoup that $90,000 and use it as floating capital for starting other nonprofit facilities,” says Ms. Bretos, who used her house as collateral for the bank loan to start her consulting business.

Winning a major prize has pluses and minuses, she adds. “Before, I was a nonentity; now, the people at HUD [U.S. Department of Housing and Urban Development] pay attention to me,” Ms. Bretos says.

But interviews on CNN and CBS also brought a flood of e-mail messages and phone calls from individuals in search of help for a frail loved one.

“You have to restructure your office and set aside time for that,” she says. “You can’t just tell people crying for help to go away.” Ms. Bretos and her daughter, Pilar Carvajal, who is her business partner, worked nights and weekends to respond to the flurry of requests and have since hired a consultant to help deal with the requests for aid. Eventually, the pair expect to hire a business manager for the office.

Expansion Help

Money for the Purpose Prize is available for one more year, when Civic Ventures may seek further grants from Atlantic, Templeton, or elsewhere, says Mr. Emerman.

Civic Ventures has decided to discontinue the grant-making Fund for Innovation it used to help last year’s winners and finalists expand their operations. Instead, it will use the remaining $800,000 in that pool to pay for people honored by the Purpose Prize to receive training at Stanford University’s Center for Social Innovation.

“Some of these programs are just one-person, volunteer-run organizations that don’t have bandwidth to grow because it’s just one older person running flat out,” he adds.

Civic Ventures hopes recipients will learn how to expand a small program, develop public-relations efforts, and think through strategic growth and succession planning. “More-sophisticated and well-established nonprofits already understand these things, but for some social entrepreneurs, there’s a real learning curve,” Mr. Emerman says.

Dr. Gaston and Ms. Porter, founders of Prime Time Sister Circles, say they have learned their lesson. To expand their program, they recently hired the Osiris Group, a Philadelphia consulting firm, to draft a five-year plan to raise money for a training facility and expand the program in the Southeast.

To keep Prime Time Sister Circles in the spotlight, they may host an annual gala to which the news media would be invited.

“You have to maximize every photo op,” says Dr. Gaston. And to spread the word, they mention their award at every speaking engagement. “We tell the audience, ‘You’ve got some Purpose Prize winners sitting right in this audience. Just go to the Civic Ventures Web site and click on Purpose Prize. This is a once-in-a-lifetime opportunity, so go for it.’”