The state of giving Featured

10:02am EDT July 22, 2002

If a region is measured by the way it cares for the weak and promotes the arts, Greater Cleveland stands tall. Since the turn of the century, industrial tycoons have used their wealth to make this a better place to live, creating world-class legacies that included museums, public gardens and settlement houses for the thousands of new immigrants employed by their companies. The achievements of the Hannas, Mathers and Rockefellers are now black-and-white photographs in history books. And the standards they set for business have continued.

In today's climate, it's easy to imagine the self interest that must have led to their gracious donations: If a business does all it can to make the community an attractive and comfortable place to live, there will be less need for the government to levy taxes to do the same work.

But making money isn't as easy today as it seems to have been back then, and we all know how much money the government requires. Philanthropy is measured differently today, and it's viewed differently as well.

It risks being seen as an old policy for which the underlying reasons are no longer remembered.

So as Cleveland again turns the page on a new century, the job of the nonprofit agencies that oversee social and civic philanthropy has become harder than ever. Over the last decade, these organizations have seen their role change from stewardship of worthy causes to complex organizations that must not only provide effective and cost-efficient services, but also educate the community as to their value, provide marketing opportunities to their large donors, and compete with more than 3,000 Northeast Ohio nonprofits for a pool of money that simply isn't growing any larger.

Overall, most nonprofit agencies report that requests for their services are increasing-regardless of any particular agency's mission. At the same time, they report that funding is dropping or staying flat. Recruitment of volunteers is no different.

Based on anecdotal evidence, it appears that whether the issue is time or money, an organization's contributions come each year from a familiar group of past contributors. Raising more money means asking for more, or asking more often.

The obvious solution is widening the base of support. The hard part is making it happen.

Why? Start with the state of business today. Mergers and acquisitions have interrupted long-standing support from many corporate citizens. The constant state of re-engineering and restructuring has increased the number of capital-needy start-up businesses.

On the individual level, the traditionally charitable middle class-often defined today as a dual-income family with a wallet-full of well-used credit cards-has become overextended. For all the opportunities that arise in a year to make donations, these families believe they have little cash to spare. And with record numbers of women in the work place, the most traditional pool of volunteers has evaporated. We may have more leisure time than ever before, but we have not created a more leisurely world. In a society increasingly driven toward self-sufficiency rather than reliance on the community, a simple act of charity has become a lot less simple.

Kathryn Covich is director of marketing and development for Big Brothers Big Sisters of Greater Cleveland, which serves more than 1,000 youngsters a year through a variety of programs. "Funding," she says, "has decreased drastically across the board. As new nonprofits enter the city, agencies compete for the same dollars. And while we enthusiastically support the arts, the funding challenge for youth and human services continues to be an uphill climb."

The organization's "Project Friendship," which matches mentors with teen-age girls who have appeared in court for minor offenses, tells the typical story for too many worthy organizations and initiatives: "Funding has been withdrawn," Covich says, "and the program is holding on by its heart strings."

The organization gets 40 percent of its annual funding from United Way of Greater Cleveland, but has to make up for shortfalls as government funding and private-sector contributions decline.

Throwing more bodies at the money problem isn't easily done; even as the financial issues loom, recruiting volunteers has become a larger concern-not for lack of interest, but for increased demand.

The Big Brother Big Sister program pairs adult volunteers with students for a 12-month commitment that amounts to several hours a month.

"The number of volunteers has remained the same," Covich says. "However, the number of youth in need has increased. Our children come from single-parent homes and require our assistance more than ever before."

Covich says there's a waiting list of 250 children, mostly African American and Hispanic boys. "We very much need African American and Hispanic men for these boys," Covich says, adding there's also room on the board of trustees for people who are interested in the commitment.

As with Big Brothers Big Sisters, the lifeline to funding is often United Way Services of Greater Cleveland, an umbrella organization of 141 partner agencies and more than 400 nonaffiliated agencies.

Its primary goal is to raise money for its agencies, allowing them to concentrate on programs and services.

Last year, according to United Way Director of Marketing and Communications Paula Slimak, the agency's partners served 400,000 individuals. Donations totaled $42.2 million, with 93 percent coming from contributions through area businesses.

You can travel just about anywhere in the nation and find a United Way agency known for setting a high goal and meeting it. But setting a new income record every year has become a strain and a challenge. The agency used to be able to do it simply by selling a corporate campaign into the HR departments at the region's 100 largest employers.

But two years ago, United Way initiated a Small Business Division because a larger percentage of the region's workers are now at small businesses.

"We are trying to broaden the base of small businesses who pledge their time and employees to the community," says Michael A. Cristal, a principal with Consolidated Risk Management and the volunteer chairman of the United Way Small Business Division. "Through this office, small businesses can affect the ways their contributions are used in their community."

There's no question, Cristal says, that the changing nature of business has pushed United Way to remain flexible in finding new-and keeping track of old-contributors.

Is there such a thing as a well-funded nonprofit organization? If so, Catholic Charities - Northeast Ohio's other philanthropic 800-pound gorilla - would have to qualify (though no professional fund-raiser will ever admit to having enough money).

Founded in 1910, Catholic Charities provides human services without regard to religious denomination. Last year, the agency served 450,000 individuals in the eight counties surrounding Cleveland, Lorain and Akron.

Its success is likely due, among other things, to a built-in source of donations-the Cleveland Catholic Diocese has roughly one million members-and a long history of leveraging every dollar raised; through grants and government contracts, the agency converted $11 million in donations into $94 million in program funding, says Leonard M. Calabrese, executive director of the Commission on Catholic Community Action.

For Catholic Charities, the bigger issue is finding volunteers, particularly in light of the labor-intensive nature of its 5-year-old Church in the City Initiative, established by Bishop Anthony M. Pilla.

"The Church in the City Initiative is not about writing a check," Calabrese offers. "It's about people coming together to identify ways to improve their community-spiritually, socially, and economically.

"In a time of significant prosperity, there are pockets of concentrated poverty where the majority of people don't have a job," Calabrese continues. "Catholic Charities offers employment t raining services in areas such as hospitality, technology and health care. We can tailor training to small business owners who become involved in the agency and communicate their needs to us."

Not every organization can depend on a built-in constituency. Founded 1908, the Benjamin Rose Institute seeks to improve the quality of life for older people as well as their families and caregivers. Last year, the agency served 6,000 individuals in their homes and 700 individuals at its Kethley House skilled nursing facility.

"Funding is stable, but we have great concerns," says Polly Clemo, assistant director of institute advancement. "Medicare and Medicaid are continually at risk." Aging baby boomers are another concern. "In Cuyahoga County, the older population will increase 21 percent by the year 2000."

The institute's annual budget, which fluctuates according to economic changes, is funded by several sources: reimbursement from health care or insurance programs (57 percent); income from trusts (15 percent); community services (12 percent); and interest (10 percent). The amount contributed by business, individuals, and foundations has remained a flat 6 percent-of which individuals contribute 50 percent, foundations provide 45 percent and corporations total 5 percent.

Part of the reason for that apparent imbalance, Clemo says, is focus. The institute performs a medical and social function, and therefore focuses on funding from those sources.

The approach is similar for Habitat for Humanity, which may be a truly modern nonprofit; it has maintained fiscal health by adopting policies that have proven effective in the private sector. There is a strict upper limit on the amount of government funding the organization will accept, and local directors are charged with diversifying funding sources.

Founded in 1977, Habitat for Humanity seeks to help neighborhoods by eliminating substandard housing and replacing it with new homes.

Since 1988, the Cleveland office has built 65 homes and has 13 more under construction. The houses are built for selected families considered "unbankable." In return, the family must contribute 500 hours of labor toward building their home.

"Considered starter homes, the houses measure less than 1,200 square feet, cost $60,000 and are appraised at $90,000. We keep houses simple but decent enough to last 30 to 40 years," says Stephen Frye, executive director of the program in Greater Cleveland. "Most importantly, the families develop a sense of ownership and pride."

"We sell the houses to families for the cost of materials. The family assumes the payments on the 20-year, interest-free mortgage which is held by Habitat. We sponsor fund-raisers for the cost of materials. The labor is donated."

The agency has enough families making mortgage payments to finance the construction of one house each year. Additional funding sources include corporations and small businesses (20-30 percent); religious congregations (20-30 percent); foundations (10-15 percent); and individuals (15-20 percent). Civic groups supply the remainder.

Volunteers are recruited from the same sources. The biggest challenge is finding skilled tradesmen to oversee construction.

The organization has innovated with its "Adopt-a-House Program." The point: Instead of donating money or recruiting volunteers, a company or organization can shepherd construction of a single home from beginning to end-raising money and recruiting volunteers.

Though a company can participate on a lesser scale, Frye notes that many businesses use it as a team-building or leadership development exercise.

This kind of financial savvy is becoming more common in the nonprofit sector. But it does overshadow a notable point: Do we want those who are watching the community to be marketers or service providers?

That's a question for the rest of us to answer.

Mary Ann Jannazo is an independent writer in Cleveland.