Monday, March 2, 2009

Non-Profit Recession News 1: Donations

Via Andrew Sullivan:

I work for a small, 5-year old non-profit arts organization in Illinois. A couple of our usual big donors have indicated we should be prepared for smaller donations this year, and possibly none in the next couple of years. The are mentioning Obama's tax plans and their need to save money now in anticipation of that. A lot of my colleagues in the not-for-profit world are really scared right now, and we are not happy with Obama. We hear the rhetoric that the government is going to have a reserve to give to non-profits that will make up for some of the lost donations, but the fact is, we have never received federal aid, and likely never would (assuming the organization could even make it that far). Organizations are going to be killed under Obama's plan. I may have voted myself out of a job, and voted a whole community of kids out of art-making opportunities. Frankly, this sucks.

My response (directed to Andrew Sullivan):

I sympathize with your reader who feels that non-profits are going to suffer under Obama's tax plan. One would assume that higher taxes might make people more inclined to find a non-profit to donate to (wasn't that the whole model that non-profit tax deduction is based around?). I myself am just starting a non-profit theater, and the atmosphere here in New York City is one of fear. Foundations will be awarding less, donors will be giving less, large corporate sponsors may be backing out of the charitable world(Washington Mutual in Seattle, other big fish in New York City). But on the other hand, this is only a part of Obama's potential to effect us. After all, if his universal health care plan goes over, then the cost of doing business for non-profits will shift, to a large degree, to the Government. And that money will be coming from the rich--our potential donors, and those who potentially wouldn't donate. The artists who work for us won't have to worry about health care--that does a lot for their long term security working the field.

Obama also gives us the opportunity to change our fundraising models. Rather than plying wealthy donors to give large chunks of money, perhaps we can raise a lot more small donations. In New York City, the Lung Cancer Foundation launched a campaign called "You Are One In A Million." They want 1 million people to give $20, rather than the old fundraising model that looks more like twenty people giving $1 million. Like Obama's, getting smaller donations from more people ensures that we're relying on community outreach rather than wealthy connection to be moving forward; and that's both closer to our missions as non-profits, and more sustainable for the future.

I still think we're going to come out on top from Obama's intervention.