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Getting Help to Groups that Need it Most

June 2010

Greg Cohen from Cause Effective leads a “Raising Friends, Raising Funds” workshop for nonprofit leaders learning how to diversify their revenue sources.
New Yorkers rely on it for meals, health and child care, housing and legal help, even getting a better tax refund. It nourishes our parks, brings art into schools, runs and fills theaters, and nurtures new talent—all while providing more than 15 percent of all jobs in the City. But despite how much it gives, the City’s nonprofit sector is not getting what it needs to meet increases in demand and cope with decreases in revenue.

In the recession’s first year, some agencies had been able to get by with federal stimulus funds, grants received before the downturn, and safety-net grants from The Trust and other foundations. But with a jobless recovery, large State and City cuts looming, and stimulus money running out, many groups must take a long, hard look at how they are going to make it.

The health of the nonprofit sector has long been a Trust priority. Grants made last year helped community health centers get millions of dollars in stimulus funds, enabled community development corporations to cut costs, and brought in teams of experts to work with nonprofits in financial distress; but more help is needed.

“After talking to dozens of executive directors and other nonprofit leaders, we have found consensus on four critical areas of nonprofit need,” says Joyce Bove, senior vice president for grants and special projects at The Trust. “A need for new approaches to fundraising; legal and financial counseling; help using outsourcing, shared services, and other ways to reduce operating costs; and help with debt.” The Trust has made six grants totaling $760,000 to fill these needs.

An $80,000 grant to Cause Effective is helping nonprofits cultivate individual donors and diversify and stabilize revenue. “The recession has definitely promoted organizational change through necessity, and as a result, we have been inundated with calls for our help,” says executive director Judy Levine. “Many organizations have friends, allies, and others who respect and are touched by their work but who have never been tapped to contribute. We help monetize that respect.” This work will build on a grant last year which helped groups including Pratt Area Community Council, Cypress Hills Local Development Corporation, and Good Old Lower East Side to generate nearly half a million dollars in individual gifts, many of them from new donors.

Community Resource Exchange (CRE) is the go-to place for help with nonprofit management. Last year, The Trust funded a hotline so that CRE could counsel executive directors with management and personnel challenges. This year, a $250,000 grant is helping the Exchange take its show on the road, bringing its services to clusters of small community groups in the far corners of the five boroughs, from East New York, Brooklyn to Far Rockaway, Queens.

“In poor communities, it’s these organizations that make the difference, but it’s hard for them to come all the way to Manhattan for consultations and workshops,” says executive director Fran Barrett. “Our strategy is to work with an anchor group in a community, and then identify other smaller groups near by that may need help. Once assembled, we’ll ask them what kinds of help they need. It might be a workshop on nonprofit compliance issues or an explanation of how City budgeting works. We will most likely connect them to the network of services available to groups like theirs, and help them raise money.”

The Trust made one of the first grants to, a group that makes it easier for smaller organizations to take full advantage of online fundraising and donor cultivation. To date, it has helped more than 9,000 nonprofits raise $22 million. This year, an $80,000 grant is helping demonstrate the potential of online fundraising for nonprofits that work in poor communities. In addition to helping groups raise money, The Trust is making a $75,000 grant to the Nonprofit Coordinating Committee of New York to help them manage it—matching nonprofits with quality, affordable vendors that can provide back-office services for less money than doing the work in house.

As revenues decline, many groups are struggling with managing debt. A $125,000 grant to the Lawyers Alliance for New York will help the agency provide free business-law services, such as restructuring debt out of court and terminating commercial leases. The Alliance will work with other Trust grantees to identify struggling groups in the poorest neighborhoods—many of which provide affordable housing and help to elders, youth, and immigrants.

“Arts groups are particularly challenged because they bought their buildings, and now can’t support their costs. Now they are seeing decreases in grant money, ticket sales, and other revenues,” says Kristin Giantris, Northeast vice president of the Nonprofit Finance Fund. With a grant of $150,000, her organization is helping prevent arts and other groups from going under during the recession by helping them accurately project their debt burden so they can manage it successfully. “Once they are able to do this, they are in a better place to talk about refinancing, or finding funding solutions.”

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