Issue #145, Spring 2006
Fundraising Practices in Community Organizing
By Jane Beckett, Sandy O’Donnell and Jean Rudd
In our work with community organizing groups, we’re often asked, “Why should I spend a day building my individual donations program which might produce a few $50 or $500 donors when I could spend that day writing a $50,000 foundation proposal?” Or “How do we grow or even stabilize when we’ve topped out our dues income and have to do more and more to keep the level of foundation support we have?”
From our diverse experiences as activists, grantmakers, grantwriters and advisers to organizing groups we have become increasingly concerned about the strength, diversity and stability of organizing’s funding base. Some organizing groups we work with are funded largely by foundation grants; many are searching for practical strategies to diversify income in ways that do not overly stretch the executive director. To help these groups, as well as funders of organizing, learn how to strengthen their fundraising practices, we recently analyzed data on organizing revenue budgets and interviewed over 100 organizers, organizing network staff, funders and expert observers. Here is what our research found.
Organizing groups raise revenue from diverse sources, but their budgets are flat and not keeping up with inflation. Organizing raises funds from membership dues, special events, corporate and individual appeals (such as canvassing and foundation and government grants), contracts and earned income (such as fees for services like leadership training). The organizing field agrees that it is better to have diverse revenue sources than to be reliant on any one source of funds, and it is better to raise most of the budget from within the community being organized.
Of the 240 community organizing groups we examined, 29 percent of their collective budgets was raised via dues, events, individuals and earned income. But we also found little growth in the overall budgets of organizing groups since the last national study in 1994 by John McCarthy and Jim Castelli. In our study of 2002 data, the mean budget of an organizing group was $207,686; in 1994, it was $213,050.
Foundations are an evermore important source for organizing, despite considerable fear that such external funding can undermine organizing strength and autonomy. In our sample, 62.8 percent of budgets was raised from private grants and 5.2 percent from government grants; in McCarthy and Castelli’s sample, 56 percent was raised from private and public grants combined. Our data suggests that new funders are drawn to organizing because they see organizing as an effective means of solving key social problems such as civic disengagement and poorly performing public schools.
But people worry that too many organizers pursue foundation grants rather than increase fundraising from within their communities. Sonya Garcia of the Grassroots Institute for Fundraising Training says, “Large foundation grants can ‘take people off focus’ and make smaller grassroots fundraising seem insignificant.” Nevertheless, our data suggest that we should be less worried about perceived over-reliance on foundation support than we should be about flat overall growth.
There seems to be an emerging consensus that foundations have important roles to play in supporting organizing and increasing its impact. But Sue Chinn of the Center for Community Change reminds us that grants should never replace or diminish grassroots fundraising efforts. “The question of support for organizing is a question of power for this sector. I believe organizing won’t grow in power and authority through foundation support…[Organizing groups] won’t grow in influence until they grow in membership. If you are going to prioritize fundraising tasks, that would be it.”
Some organizations excel at fundraising. Organizers and executive directors of these organizations suggest these factors for good fundraising:
See fundraising as organizing. Effective organizer-fundraisers see no dichotomy between fundraising and organizing; they build powerful organizations by involving leaders in recruiting dues-paying members, asking for donations and grants and hosting fundraising events.
Commit enough time to fundraising. Allocate significant time to fundraising, make a multi-year fundraising plan and stick to it.
Develop staff skills. Seek and support staff who participate in and/or support fundraising.
Involve leaders. Expect leaders to give to the organization, recruit new dues-paying members and participate in meetings with funders.
Use technology to support fundraising. Employ integrated databases and consider Internet-based fundraising.
Intensify and re-think training. Secure fundraising training that helps the organization develop new attitudes and accountability, commit resources and enlarge the group of people within the organization who can and will ask for donations or recruit new members.
More members of the foundation community are wrestling creatively with the question of how to increase foundation support of organizing without undermining local ownership. Our respondents surfaced a number of strategies that can help increase funder investment and effectiveness in organizing.
Funder collaboratives, like the Funders Collaborative for Youth Organizing and the L.A. Urban Funders, seek to draw attention to the promise of organizing itself, to build skills and effectiveness of organizing and to advance a particular topic, issue area or constituency group.
Peer awareness building allows foundation staff who are champions of organizing to draw peers into this field. Lori Bezahler of the Edward Hazen Foundation says, “I spend 60 percent of my time on developing other foundations’ buy-in to organizing on youth and education, engaging them to participate.”
Intermediaries grant dollars to local or technical assistance groups that may raise additional funds for the initiative, address capacity-building needs articulated by organizing groups and re-grant dollars to grassroots organizations. Seth Borgos, also of the Center for Community Change, says, “Intermediaries can help with brokering relationships…they can project a broader vision of what’s possible. The larger possibilities draw new [funders] into the field.”
Despite the examples of effective organizer-fundraisers and innovative grantmaking, serious challenges remain. Several people we interviewed presented tough challenges for organizers, funders and other advocates of organizing. Observing that local-level organizing is of limited interest to many donors, Borgos believes, “part of what’s required to raise the profile of organizing is to make it look bigger to people, and part of what’s required is a sustained and sophisticated marketing effort which is beyond the capacity of local organizations. Whether it’s through networks, or intermediaries, or some other form of aggregation, organizing needs to scale up in order to meet the challenges [of sustainability and growth].”
Greg Galluzzo of the Gamaliel Foundation echoes the sentiment. “There’s growing awareness of the importance of organizing’s image and of communications as a tool in fundraising. You need to project an image for someone to want to invest.” Many suggested rethinking the language with which organizing is described, with a greater focus on its outcomes than its process.
Individuals account for 74.5 percent of all charitable giving in the United States and foundations only 10.9 percent. Many organizers we talked with recognize that individuals are “where the money is” and are or should be their major unrealized fundraising opportunity. Others we interviewed are intrigued about the potential for organizing to tap into the impending enormous intergenerational transfer of wealth and observe that structures such as philanthropic advisers and “alternative funds” might create some access to this wealth.
One of the major findings of this study is that neither technical factors (fundraising techniques) nor external ones (the economy, the political climate) are as significant challenges to building strong, diverse revenue bases for community organizing as is the culture of organizing itself. Peter Phillips, organizer for Federations of Congregations United to Serve, says, “There’s something about organizing that we can ask public officials to spend millions on something worthwhile, but we can’t ask for the money to support the organization that makes it possible….We have to develop that level of confidence that what we’re raising money for is deserving of huge support.”
Many respondents observe that organizing has evolved into a culture where fundraising is seen, not as one half of the “organized people/organizing money” equation, but as a necessary evil and a distraction from “real” organizing. Organizing groups are often staffed by people who are uncomfortable asking for money and find it difficult relating to wealthy individuals, and they frequently have relationships with institutional funders (especially those that represent power or wealth) that are characterized by tension and even avoidance.
That effective organizers are around and thriving hints that the larger cultural barriers to fundraising endemic to the field may be eroding. Some promising practices in changing this culture include: more and better training of organizers, bringing in fundraising staff when overall revenues permit such specialization and emerging efforts to expand organizing alliances and re-think strategies and communications.
The complete report, sponsored by the Center for Community Change, is available at http://comm-org.wisc.edu/papers2005/beckett.htm. Jane Beckett has done labor, community and political organizing and raised grassroots money for and trained many organizations. Sandy O’Donnell has more than 25 years of experience in applied community research and consults with foundations and nonprofits. Jean Rudd was president of the Woods Fund of Chicago, where community organizing has been a top funding priority for over two decades.