Green Shoots and Greenbacks

Signs that an economic recovery may be on the horizon have pushed plans for ambitious fund-raising drives back on the table at charities around the country. And the news has given some cheer to fund raisers overseeing capital drives that have been hobbled by the recession.

No one is expecting a quick financial turnaround for the country or for wealthy people, but charity officials say they are a bit more sanguine about the prospects of raising the millions — and even billions — of dollars they have promised for their capital campaigns.

“We have been able through a lot of heavy lifting to stay within striking distance of our goals,” says Robert D. Sweeney, senior vice president for development and public affairs at the University of Virginia, which is in the midst of an eight-year campaign to raise $3-billion. “We’re in it for the long haul, and, taking the long view, we now can see that things will be improving.”

Among the nonprofit groups ready to give the green light to capital campaigns that have been on hold is a medical center in Alabama.

“The country seems to have reached a semi-optimistic attitude about the economy, so it’s time to take advantage of that,” says the director of the center’s foundation, who asked that the organization not be named since its board has yet to approve the anticipated $8-million drive. “We’ve been watching and waiting for this moment to make the case that we can go out and raise that money.”

‘Pent-Up Demand’

Fund-raising consultants say they see an uptick in calls and inquiries about starting capital campaigns, and, while most advise caution, they agree it’s time to start planning.

“There’s a lot of pent-up demand, and a lot of clients that had cold feet over the last year are starting to come back,” says William C. Krueger, a Louisville, Tenn., capital-campaign consultant. “Everyone wants to start a campaign when the economy breaks.”

Still, Mr. Krueger and others say, it pays to take baby steps, and to take into account how the recession has changed the fund-raising climate.

Experts say that charities need to be particularly sensitive to donors’ financial situations and to expect them to continue to be conservative with their gifts, such as by spreading out pledge payments over longer periods of time. They say, too, that organizations embarking on campaigns need to meticulously shape their case for money, emphasizing urgent needs and areas where donors might clearly see the impact of their gifts.

“In many ways this is about getting back to the basics of fund raising — creating a compelling, strategic, targeted campaign that will attract donors who are being extra careful with their charitable dollars,” says W. Keith Curtis, a fund-raising consultant in Virginia Beach. “It’s about tweaking your marketing and message and plans to smooth the way when donors are worried about parting with their money.”

Many nonprofit groups that have started campaigns within the last year or had them running when the recession hit have already made such accommodations.

Fordham University, in New York, shifted plans for the allocation of the $500-million it is raising to put less of the money into capital projects and more into scholarships, a more compelling cause in a recession. Now $120-million, up from $100-million, will go toward student aid.

“Priorities can shift over the course of a campaign, and our donors were expressing great interest in meeting the direct needs of our students,” says Al Checcio, Fordham’s vice president for development and university relations.

Leading up to the start of its capital campaign in January, the Wyoming Medical Center, in Casper, had planned to raise $10-million to add patient rooms and expand its emergency-care facility. But the organization decided to trim its goal to better fit the economic climate, announcing instead a $6-million drive that would cover emergency-room costs only.

Extended Timelines

Instead of scaling back campaign goals, many organizations have extended their fund-raising timelines to give donors who have been rocked — or at least spooked — by the economy more time to make their gifts.

Hosparus, a hospice organization serving parts of Kentucky and Indiana, had hoped to raise $10-million over three years, starting last fall. The organization found, however, that while many of its top donors were willing to support the drive, they needed more time to fulfill their pledges. The campaign will now run for five years.

“Donors are making the commitment, but they are asking us to wait a year or so for them to start payments, or they say they will consider doing even more if they can stretch out their payments over a few more years,” says Bob Mueller, vice president of development at Hosparus.

St. Mary’s College, in Notre Dame, Ind., is considering extending the $80-million drive it started last year by an additional year to accommodate donors who have expressed interest in making one multiyear commitment now and then potentially another one in a few years.

“If we go from five to six years, donors can pay their initial gifts over a three-year period and then we can revisit with them for a second three-year pledge,” says Shari Rodriguez, the institution’s vice president for college relations.

Some organizations are loosening their policies on bequests and other planned gifts to give donors who have assets, but less disposable income, the opportunity to contribute to capital campaigns. Typically, organizations might count only irrevocable bequests in their fund-raising drives, or limit the percentage of a campaign goal that can be in the form of bequests or other planned gifts.

While wills can be changed — meaning campaigns run the risk of higher rates of unfulfilled pledges — fund raisers say that soliciting more bequests also allows for the possibility of turning the bequests into outright gifts during a donor’s lifetime when the economy improves.

“A legacy gift keeps the donor engaged and involved and leaves the door open for a later conversation about a cash gift,” says Debra C. Engle, senior vice president for development at the Oklahoma State University Foundation, which anticipates announcing a new capital campaign as early as this fall.

She says the campaign goal is likely to be less than the $1-billion the institution was originally considering more than a year ago, but will still be ambitious.

“We slowed our plans to get started and we’ll be less aggressive with our goal, but we’re beginning to sense some optimism right now that things could be turning around,” Ms. Engle says. “Maybe it’s that we are all getting accustomed to the uncertainty, but whatever it is, we have a great institution and great supporters and it may be time to move forward.”

Stalled Drives

Even with the potential for financial good news around the corner, some capital campaigns remain hamstrung by the bad economy. The Make-a-Wish Foundation of Sacramento and Northeastern California had hoped to have already wrapped up a $4-million capital campaign to pay for a new building, but fund raising has stalled at $3.8-million, and may include some pledges that could go unpaid.

For example, Melinda Carson, the charity’s executive director, says that two of the outstanding pledges were made before the economic downturn by local real-estate developers. With the real-estate market so troubled, she says, it is unclear whether those pledges will be fulfilled.

Work on the new building is going ahead, though, with some of the costs being offset by donations of products and services from the contractors. The organization is also relying on a $1-million bridge loan that it had always anticipated needing, but the charity now expects to take at least five years, instead of three, to repay it.

“In some ways we are lucky to have much of our campaign done before the real economic problems started,” says Ms. Carson. “But just as it looks like things might start to brighten up at some point soon, we are still working hard to finish what we started.”