A Nonprofit Group Helps Tiny New York Charities Drum Up Big Fund-Raising Galas

BRAINSTORMS

By Alison Stein Wellner

At Webster Hall, a trendy nightclub in New York’s Greenwich Village, the dress code for people who come to dance every weekend is a notch above casual: no athletic wear, no sneakers, no hats. But on a weeknight in late October, the more than 500 people who packed into the club needed no such instruction. Suits and ties abounded as some of Wall Street’s most powerful executives and other notable New Yorkers attended a fund-raising event to benefit the city’s children, an evening hosted by ABC News anchor Steve Bartelstein and featuring the actor Joe Piscopo. At the end of the night, donations reached more than $500,000.

This wasn’t the major fund-raising event of the year for a large and established charity. Instead, the party was designed to drum up funds for 11 small nonprofit groups that work with children, organizations that would never be able to manage an event of this size, scope, and success on their own.

The “Celebration,” as it’s known, is the major annual undertaking of the eight-year-old Youth Improving Non-Profits for Children, more commonly known as Youth, I.N.C., in Washington. Youth, I.N.C. selects the organizations to participate in its programs in New York and Los Angeles, and plans and promotes two major fund-raising events each year, one in each city. It also provides a year’s worth of training on fund raising and marketing to its nonprofit organizations, as well as free tickets to the event, which the charities can then sell to donors.

The charities receive about 90 percent of the funds that they raise through the event, and the rest goes to Youth, I.N.C. to help defray costs. Over the past six years, 40 nonprofit groups that serve children have raised more than $7-million with help from Youth, I.N.C.

Matching Charities With Donors

The organization is the brainchild of Stephen K. Orr, a former investment banker who helped found the group with James E. Duffy and who serves as its executive director. Mr. Orr had volunteered for several children’s charities, and he says he noticed a pattern among the smaller groups: They would grow to a certain size and then peter out.

“They’d have a very difficult time growing their networks, implementing fund-raising vehicles, while they were running all of their programs,” he says. “It’s a huge challenge. You might have the greatest youth program in the world, but if you can’t fund it, it won’t be able to grow.”

At the same time, he says, he knew there were plenty of philanthropists in corporate America who might be willing to donate money to a small but worthy charity, if they could feel secure that the organization would use the funds wisely, had a strong program, and could endure.

In 1994, Mr. Orr hatched a solution to bring together those who need money and those who give it away — and make the most of the donated money. Youth, I.N.C., he says, would look for nonprofit organizations that were delivering an established, distinctive service to children, but still had room to grow: charities beyond the start-up phase, with annual budgets of about $250,000 to $1-million. “They’re organizations that are ready to become more self-sufficient,” he says.

One of those organizations is Friends of the Children New York, a two-year-old group that provides full-time mentors to disadvantaged youngsters in Harlem. This year, it participated for the first time in Youth, I.N.C.’s program. Friends’ leader, Howard Clyman, learned of the program through happenstance: His program manager’s brother-in-law works at the consulting firm Deloitte and Touche, where managing partner Allen S. Thomas Jr. sits on Youth, I.N.C.’s board. “We’d talked about sponsoring an event, and we looked into it, but we still didn’t have a wide enough base of support,” Mr. Clyman says. “We’re expanding and doing well, but to do an event of this magnitude on our own, I knew that would be almost impossible,” he says.

His group applied to Youth, I.N.C., and was admitted into the program. Like the 10 other charities that were involved this year, it sold its own tickets, and had its own private reception in one of the many rooms off Webster Hall’s main room, before joining together with the rest of the crowd for the evening’s entertainment. Mr. Clyman’s charity raised about $30,000 that night, he says, making it Friends’ largest fund-raising event of the year.

‘Like a Venture-Capital Program’

Fund-raising events, however, are only part of Youth, I.N.C.’s mission. With a $2-million annual budget of its own, it acts as a sort of pro-bono management consultant for children’s charities. The group conducts workshops and, through various training programs, teaches charities to raise their own money; it also provides assistance in board development, and has recently started to help with information-technology challenges. (Mr. Clyman says his group is planning to seek Youth, I.N.C.’s assistance in the areas of technology and board building.)

This system has proven attractive to corporate executives, who serve on Youth, I.N.C.’s several boards and lend their clout — and attract donations — to the nonprofit organizations that Youth, I.N.C. serves. Representatives from financial institutions Goldman Sachs, JPMorgan Chase, Merrill Lynch, and Bear Stearns, to name a few, have been persuaded to become Youth, I.N.C. trustees, in part because the organization’s method for helping small charities is a logical extension of the business world.

“It’s like a venture-capital program, if you think about it,” says Alex Navab, co-chairman of the board, and a general partner at the investment house Kohlberg, Kravis Roberts and Company, in New York. “We try to help the organization raise their own funds, and also try to bring them leadership at the board level.”

Like the fledgling businesses that are nurtured with the assistance of venture capitalists, Youth, I.N.C. hopes that the charities it aids will learn enough to “graduate” from the program, and eventually host their own profitable events. And that’s just what happened for Everybody Wins, a children’s literacy program founded in New York in 1991. “I didn’t have a background in nonprofit management or fund raising,” says Arthur Tannenbaum, the group’s founder. “I started up this program and it was extremely well received, but we struggled financially, and we definitely would not have grown, had we not been fortunate enough to find Youth, I.N.C.”

Over the past eight years, Everybody Wins has raised more than $2-million the organization hosted its very own gala fund-raising event. Gossip columnist Liz Smith served as the honorary chairwoman, and the authors Judy Blume, Dominick Dunne, and Malachy McCourt gave readings to a crowd of 500, says Mr. Tannenbaum. The event brought in $500,000.

Mr. Tannenbaum says he believes that the funds his group raised through its first solo fund-raising event will continue to propel it down the path that Youth, I.N.C. helped to pave. “We’re looking to double the size of our program over the next couple of years,” he says. Now, he’s got the skills to turn that plan into reality.

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