Volatile Market and Terrorism Dampen Optimism Among Fund Raisers

Concern about the fluctuating stock market and the terrorist attack in Spain prompted many of the participants gathered here for the annual meeting of the Association of Fundraising Professionals to temper their enthusiasm for 2004’s fund-raising potential.

Some fund raisers expressed concerns that stock-market declines in February and March, combined with renewed fears of terrorism following the bombs that killed nearly 200 people in a Madrid train station last month, could make donors more reluctant than they were last year to give money to charity.

“Donors are worried about the future,” said Cherilyn J. Bacon, director of development at United Families International, in Mesa, Ariz., which works to keep families together. “They see the stock market falling and are concerned about their financial security. They also wonder if terrorists might attack this country again because it’s an election year.”

“Volatility is the key word these days,” said Marianne G. Briscoe, president of Brakeley Briscoe, in San Mateo, Calif., a consulting company that helps nonprofit groups attract donations. “We’re seeing a lot of anxiety and uncertainty among fund raisers — a feeling that people can’t get the wheels under their campaigns.”

Some fund raisers said that in February and March they saw prospective donors shy away from making large gifts. David Cave, a fund raiser at the University of Cincinnati Foundation, said a growing number of people are promising major bequests, but not making such gifts while they are alive.

“One couple told me that they would have to put off remodeling their kitchen to make a large donation,” Mr. Cave said. “That is not normally the kind of thing you hear from people with the means to make major gifts.”

At the start of 2004, many fund raisers felt optimistic about the climate for raising money, according to a report released at the conference.

Seventy-three percent of charity officials surveyed in early February by the Association of Fundraising Professionals said they raised the same amount or more in 2003 as they did in 2002. More than nine in 10 respondents said they expected to raise at least as much this year as they did in 2003.

The 2004 survey was conducted on the heels of a rising stock market and an uptick in consumer confidence in the economy — giving the results a bump over those from the past two fund-raising surveys, when development officers were not feeling as optimistic, said Paulette V. Maehara, the association’s president. The 2002 survey followed the attacks of September 11 and the U.S. invasion of Afghanistan, while the 2003 survey occurred after the United States had invaded Iraq.

To conduct the survey, the association contacted 3,000 of its members in the United States. Joyce O’Brien, a spokeswoman for the group, said the 365 respondents were a representative sample of the group’s 26,000 members.

Respondents said donations from private sources increased by an average of 5.74 percent in 2003, the report said.

Gains came mostly at large groups. Nonprofit organizations that raised less than $1-million from private sources “performed poorly” in 2003, the report said, while groups that raised more than $1-million saw the greatest increases in the amounts they brought in compared with the previous year.

For example, organizations that raised less than $250,000 annually experienced a 2.3-percent decrease, on average, in the amount they brought in during 2003 compared with the previous year. Groups that raised more than $10-million saw a 10.6-percent increase in the amount they attracted in 2003 compared with the previous year.

“There’s absolutely a growing gap between the big and small groups,” Ms. Maehara said. “Large organizations have greater resources than small groups, and they are applying those resources to their fund-raising efforts because they recognize the increased competition in the field.”

Still, even large nonprofit organizations have pulled back their expectations, Ms. Maehara said. “We’re seeing more-ambitious campaigns than in recent years,” she said. “But they are five- to seven-year campaigns, not three- to five-year campaigns like they used to be.”

A full report on the survey, “AFP State of Fundraising 2003 Survey,” will be released on the organization’s Web site, http://www.afpnet.org, in May.

For more information, contact the Association of Fundraising Professionals at 1101 King Street, Suite 700, Alexandria, Va. 22314; (800) 666-3863; paffairs@afpnet.org.

Fund raisers at nonprofit organizations should encourage their employers and donors to become more politically active, Tim Gill, a software entrepreneur who established the Gill Foundation, in Denver, told conference participants.

While federal and state laws allow charities to lobby government officials to a certain extent, “a huge percentage of 501(c)(3)s don’t get involved in lobbying,” Mr. Gill said after receiving an award from the Association of Fundraising Professionals for his foundation’s work.

In addition to encouraging greater participation in speaking out about their causes, charities should educate donors about how the presidential election in November and other political events affect charitable work. “Each and every donor you have wants to be involved,” he said. “Keep them involved, keep them activated, and get them to the polls.”

Mr. Gill’s fund received the 2004 Outstanding Foundation award. Ms. Maehara, the association’s president, praised the foundation for its work in bringing together lesbian, gay, bisexual, and transgender (known collectively as LGBT) nonprofit groups with other organizations. She made special note of the fund’s efforts to train charities in management and fund-raising practices.

“While many foundations don’t offer any sort of training, the Gill Foundation not only talks the talk, but walks the walk,” she said.

Besides Mr. Gill, Ms. Maehara and the association honored another philanthropist, B. Thomas Golisano, a Rochester, N.Y., executive who is president of Paychex, a national provider of human-resource services, and owner of the Buffalo Sabres, a professional hockey team.

Mr. Golisano received the association’s 2004 award for Outstanding Philanthropist for his numerous gifts to hospitals and universities in western New York State. In 2001, for example, he donated $14-million to the Rochester Institute of Technology to establish a college of information technology.

After accepting the award, Mr. Golisano told conference participants that he receives 10 to 15 requests for support a day from charities. “You have to make hard decisions,” he said. For a fund raiser to receive money from him, Mr. Golisano said, he looks for perseverance, and from the charity itself he expects accountability and a business plan.

Forty-two percent of fund raisers feel overworked, according to an informal survey of 76 development officers that was taken during a conference session about burnout.

While more than half of respondents — 55 percent — said they like their work “ok,” just 3 percent said they were “completely fulfilled.”

Panelists and people who attended the session discussed a few ways to help avoid burnout in the fund-raising field:

• “Avoid the savior complex,” said John Mitterling, vice president of development at the North Carolina Symphony, in Raleigh. “Work hard, but work a reasonable amount so you won’t burn out.”
• “Don’t be afraid to leave your job,” said Priscilla Bratcher, director of development of the Royal Shakespeare Company America, in Washington. She said she has changed jobs many times during her career, in part because the “career path is very short” in many organizations. Unlike large companies that have numerous positions, she said, many charities employ only one higher-level executive than a fund raiser — making it difficult to get promoted.
• Set boundaries with your work, another fund raiser suggested. She said she attends yoga class in the middle of the day, allowing her to release tension she feels because of her job.

While more than 3,500 people attended the fund-raising conference in Seattle, some of the city’s most visible fund raisers — the noticeably large population of street beggars — chose not to make an appearance inside the convention center.

“Panhandling is a big issue in this town,” said Janet Aldrich Jacobs, director of planned and endowed gifts at the Seattle Symphony.

The problem has worsened in recent years, Ms. Jacobs said, as the state’s unemployment rate has risen.

“What’s really sad,” she said, “is how many 25- and 30-year-old kids are out begging for change.”