Building a New Trust

Decade of transformation pays off for preservation charity

Ten years ago the National Trust for Historic Preservation was itself in need of restoration. Chartered by Congress in 1949 to preserve historic buildings, the trust was far better at fixing aging facades than at fund raising. It had never run a major campaign to woo donors, and it counted few wealthy people among its supporters. One-fifth of its money came from the federal government, and Congress was losing interest in what seemed like the trust’s gilded mission: restoring stately old houses to architectural glory.

Today, the trust looks nothing like its old self. It has doubled its fund-raising staff and brought in 30 gifts of $1-million or more. In addition, the group has formed lucrative partnerships with businesses to bring in more donations and raise its profile — including sponsorship of a cable-television program on home remodeling. Its programs have expanded, too, focusing as much now on such issues as low-cost housing and renewal of blighted neighborhoods as on beautification of fading mansions.

And most significantly, the trust is almost completely off the government dole, a shift in fund-raising strategy that is at once bold and risky.

Weathering the Change

The chief architect of the group’s transformation is Richard Moe, chief of staff for Vice President Walter F. Mondale during the Carter administration. Mr. Moe, who in 1991 wrote an acclaimed Civil War book that chronicles the lives of Union soldiers, was drawn to the idea of running a group with roots in America’s past.

The organization that Mr. Moe stepped into 10 years ago rested shakily on a foundation of government money. Two years after he became president, Congress cut in half the amount the trust typically received from the government. Realizing that it might not survive continued government cutbacks, Mr. Moe struck a deal with lawmakers. In exchange for receiving a guaranteed appropriation for three more years — through 1998 — the trust would never again seek federal operating support.

While many nonprofit organizations are under pressure to reduce their reliance on state and federal aid now that governments at all levels are cutting support to charities, the trust could serve as a model of how to rely less on government money, according to Debbie Weatherly, staff director of the House Appropriations Subcommittee on Interior, which oversees federally chartered organizations such as the trust.

“As a product of tight fiscal times,” Ms. Weatherly says, “we could see more organizations do what the trust did.”

When the trust initially stopped receiving federal operating support, however, Mr. Moe says he felt like he was “leading the organization off a cliff.” The challenge of replacing unrestricted federal money with donations, he says, was compounded by the organization’s inexperience at fund raising.

At the time it made the deal with lawmakers, the trust had a $35-million budget, $3.5-million of it coming from Congress. The organization employed 12 fund raisers, had never attracted a gift of more than $1-million for operations or programs, and was getting just 2 percent of its money from foundations.

In the five years since going off federal operating support, the trust has brought in $135-million, largely as a result of its Campaign to Save America’s Historic Places, which raised money for capital projects, endowment, and annual operations. The organization now gets about one-fifth of its donations from foundations. And with a recent $20-million gift from the estate of Paul Mellon, the art collector and son of the financier Andrew W. Mellon, which will help restore Montpelier, the home of President James Madison, the trust is proving that it can attract major gifts.

Despite a successful campaign, Mr. Moe says, the trust has not achieved full financial independence because its annual giving and its membership need to grow to support where it is headed as an organization.

Still, much of the organization’s growth in the past five years would not have been possible if not for one strategy, Mr. Moe says: “We reinvented the trust.”

A New Mission

Soon after making the deal with lawmakers, Mr. Moe reduced the organization’s staff size and trimmed two programs — one that served owners of private historic properties, and another that focused on saving historic ships. But Mr. Moe realized that if the group was going to survive on its own, it would need to shed its elitist reputation, broaden its mission beyond salvaging grand old houses, and find a way to gain publicity in a crowded field of charities.

Redefining historic preservation was the first and most important change that the organization made, Mr. Moe says. Now, the group’s mission is to help save places that a greater number of Americans know and care about, to advocate for low-cost housing, and to promote public policies that fight suburban sprawl.

The trust worked with the Ad Council, which produces public-service television commercials and print advertisements, to promote awareness of the group and give more Americans than in the past a reason to care about the trust’s work, Mr. Moe says. In one commercial that the council runs about the trust, a couple returns to the church where they were married, only to discover that it has been replaced by a gas station. A voice says, “When your children ask where you got married, will you have to say, ‘Over there, by the unleaded?’” Mr. Moe says the ads have helped double the number of visits to the trust’s Web site in the past year.

The trust also is featured prominently on a television program on Home & Garden Television, a cable network that reaches more than 80 million homes. Three times a week the network televises Restore America, a show about the restoration of historic buildings chosen by the trust.

In addition to reaching into cable viewers’ homes with its message, the trust has received $2-million in the past two years from Home & Garden Television. The organization uses most of that money to help restore the historic sites shown on the TV program.

Advocacy Work

The trust also has taken on higher-profile advocacy work than it had in the past. In 1994, the organization helped prevent the Walt Disney Company from building a 405-acre historical theme park on rolling Virginia farmland where Civil War battles had once been fought.

The organization also has tried to influence the development of low-income areas. Through its Main Street program, the trust has advocated for the redevelopment of 1,600 older neighborhoods and vacant buildings. The trust recently encouraged a developer in St. Louis to spend $39-million to restore a post office built in 1884 but abandoned 15 years ago.

The developer will receive federal tax credits for $17.8-million because the post office is listed on the National Register of Historic Places, a designation of 77,000 historically significant places. The restored 242,000-square-foot post office, located in a low-income area, will house government offices and retail shops. And the developer also will restore 400 apartments in the surrounding neighborhood.

Mr. Moe never worried that expanding the organization’s focus beyond the restoration of mansions would turn away longtime donors. In fact, the opposite has occurred, as many individuals have increased their support, he says. One prominent donor agrees.

“When the trust got involved with community revitalization — not just saving buildings here and there — that is what excited me,” says Henry A. Jordan, a longtime National Trust donor and past chairman of its board of directors. “They’re now more relevant to issues of our time.”

As it has sought new ways to raise money, the trust has formed partnerships with many companies — helping to increase its net revenue from sponsorships to $1.5-million in 2002, more than three times what it brought in during 1998.

Individuals, however, continue to support the trust more than any other private source. Gifts from individuals accounted for 73 percent — $21.5-million — of the group’s private support in 2002.

A portion of the organization’s annual private donations comes from its 200,000 members, who generally give about $30 each. A smaller amount comes from 160 people who give at least $10,000 a year — a gap the trust is trying to close by investing more than in the past in programs to attract larger gifts. The rest of the donations from individuals come from bequests, planned gifts, and other large contributions.

Donors who pledge to give at least $10,000 a year and who have connections to potential donors and other influential people are invited to join the National Trust Council, which meets twice a year at historic sites. Last month, 60 council members traveled to San Francisco, where they toured Filoli, in Woodside, Calif., a 1915 house and gardens, and the 1,480-acre Presidio, near the Golden Gate Bridge, which features 500 historic buildings.

In addition to touring historic sites, the council also meets with officials of the trust to give advice on the organization’s operations. About six council members also have been recruited to serve on the trust’s board of directors.

Without having a formal program to recruit big donors before it began its first campaign, the trust relied on its 40 board members to help raise a majority of the money during the campaign. Trustees themselves gave almost $10-million.

While the campaign helped to increase the endowment of the National Trust to more than $100-million, Mr. Moe says, the organization only “briefly celebrated” that milestone.

Now, he says, the trust must persuade its members to make unrestricted annual gifts. Mr. Moe thinks the organization needs to persuade its major donors — those who give at least $1,000 a year — to donate 7 percent to 15 percent more than they usually do every year. A $4-million challenge grant that the group just received from a New York philanthropist will help the organization ask current donors to increase their support, Mr. Moe says.

And although the trust has not received any federal operating support since 1998, hard economic times last year prompted it to ask Congress for a one-time, $5-million appropriation to help pay for maintenance of the 23 historic sites it operates. Congress approved the request. Mr. Moe says he has no plans to ask lawmakers for money again, but he is not closing off the option.

“Preservation is now at work in virtually every community in this country in some form,” says Mr. Moe. “We plan to do whatever it takes to support it on a much larger scale.”