OCCUPY WALL STREET!

On Sunday October 9th we walked down to Zucotti Park, 2 blocks north of Wall Street, and the Occupy Wall Street locus.This movement is catching on not because it's an alternative to the Tea Party but because, far more fundamentally, this country is a mess, our political institutions are a mess, the president's leadership is - to say the least - wanting; a growing number of people, especially young people, see their lives in turmoil and without a lot of good options for the future. That heady brew, not tea, is what the growing protests are all about.



To blame this all on Wall Street is of course a bit simplistic and I know better. But the sad fact is that they got us into this mess and they are still running the economy. Because he was inexperienced Obama did not thoroughly clean house and the unfortunate result of having a Geithner rather than say a Krugman as treasury secretary has, in my view, really worsened the situation.

Peacefully raging against "the interests" is absolutely right on and clearly I am not alone. What's left of the Left is out there. But it's more than Birkenstocks and guitars: the Democrats finally woke up and to the extent they can would like to co-opt the occupation. Organized labor, sidelined for years, has come aboard. Even Ron Paul, that nerdy dyspeptic, was represented by a noisy claque.

The paradox is this: I spend my professional life helping our clients extract from corporations and foundations (whose portfolios are made up of those same companies)as much as they can in charitable gifts. Unfortunately the exchange is far from even. The vast harm that's been done by corporate and individual greed unchecked and lack of any effective brake on the piggery is far greater than the modest sprinkling of money called "corporate philanthropy."

Wall Street may be laughing all the way to the bank. But metaphorically at least it has to cross Zucotti Park to get there. The coming New York winter will inevitably end the Occupation. Until then I"ll stop by occasionally for a reality check.

A Tough Year

According to a report released today (September 29th) by the Nonprofit Research Collaborative (NRC), of 813 responding nonprofits surveyed in July:

 44 percent reported increases in charitable contributions received through June, compared with the same period in 2010;

 25 percent reported giving remained level; and

 30 percent reported charitable contributions have declined so far this year.

 1 percent did not know.

These numbers are barely changed from the NRC 2010 year-end survey, when 43 percent of respondents indicated they raised more money in 2010 than they did in 2009. At that time, almost a quarter (24 percent) saw giving remaining level, and 33 percent raised less.

These results indicate that nonprofit organizations still face a difficult fundraising climate. In AFP’s 2007 State of Fundraising Survey, which asked the same questions as the 2011 NRC study, 65 percent of respondents raised more money that year, before the recession, than in 2006. Eleven percent raised about the same, and 24 percent raised less.

“A much larger percentage of nonprofits were seeing significantly higher fundraising results before the recession,” said Andrew Watt, president and CEO of the Association of Fundraising Professionals (AFP). “With many economists predicting a flat economy for several more years, charities face a very challenging environment in the near future, with fewer funds available while the demand for services and programs remains quite high. This is the reality charities will have to address.”

Results by Subsector and Growth

The NRC surveys found that the relatively low share of nonprofits reporting growth in contributions received began during the recession and lingered for all subsectors through the first half of 2011. In the current survey, human services organizations fared best, but only 50 percent of those organizations reported increases in the first half of the year. International charities had the smallest share of organizations reporting increases, at just 20 percent, although those numbers may be affected by the Haiti earthquake and high donation levels in 2010.

There were marked differences based on size, with larger organizations achieving greater fundraising success. Fifty-seven percent of the largest organizations in the survey (budgets of $3 million or greater) raised more funds in the first half of 2011, compared with just 34 percent of charities with budgets of less than $250,000.

Implementing Campaigns and What’s Ahead

In one strategy to raise more funds, charities are planning for and implementing capital and other fundraising campaigns. Of the NRC respondents, 12 percent are currently involved in a campaign, while 34 percent are in the planning stages. Organizations currently in specific fundraising campaigns were somewhat more likely to see gifts increasing, with 62 percent reporting they had raised more money in the first half of 2011 compared to the same time in 2010. The only exception was for organizations with annual expenditures of less than $250,000; they did not see any significant increases.

“To help donors focus on achievable results, many charities now are setting up short-term special campaigns,” said Nancy Raybin, on behalf of Giving USA Foundation. “By setting discrete fundraising goals for specific activities, nonprofits find they can break through the uncertainty about the economy and help donors connect their gifts to community needs.”

About the Survey

When asked for their thoughts about the most successful fundraising methods for the rest of the year, two-thirds (67 percent) reported they would focus on large-scale efforts to reach many people through direct mail, special events, online campaigns and similar activities. Forty-five percent said they would focus on larger gifts, while 28 percent said they saw foundation and corporate support as their biggest potential growth area.

If your head is in the sand your butt is in the air ...

In Congress a minority of the inmates have taken over the asylum. Bird-brained, born again tax cutters have paralyzed political discourse and are leading the privatization of poverty (punish the poor)and socialization of wealth (protect the rich); the House speaker, a waxen figure with a great bottled tan, occasionally movable arms, golf clubs and limited powers of speech warily fronts for the House Whip, an opportunist who has discovered the first law of politics: stand in the center of every photo op and you can't be cropped out.

In the Senate the Democratic leader is given to Magoo-like utterances. The House Minority Leader has stayed too long and saddest of all Professor President has lost his mojo. Mr. Obama and his advisers err in believing his base will respond because every alternative is worse. I'm not 100% sure the base will agree. Mr. Obama has said he'd rather be a good one-term president, rather than a mediocre two-term president. He may well be the former if he does not send a jobs bill up to the Hill as soon as Congress is back and then fight for it, win or lose, up or down, in every nook and cranny of the land - with passion, force and tears if necessary. Next to jobs he needs to address the housing mess head on: the foreclosures that are depressing the housing market could and should be converted to rentals forthwith.

Some voters get the stock market or the euro. But everyone understands a job and a place to live. In my view there will be little frontal success in attacking social security or health care.The equally bipartisan "Super Committee" will seize up just as Congress has and the "automatic" cuts across the board will end up in the courts of special interest. Among the strongest lobby in congress is the sundowner vote and the dimmest wit in the Cave of the Winds has felt its power.

Instability and a sense of dread are not harbingers of what's good for philanthropy or much else. But even now, with abounding national uncertainty, dysfunctional national government, a fractured political system and apparently ongoing market volatility I am still very much optimistic over the long term. Markets rebound and we are by far the richest most stable and most privileged country in the world even if this is not likely to be a comeback year for the fundraisers. But ...

In my view it's not just money that's hobbling nonprofits - though that is an obvious issue of profound concern - rather there is a real crisis of leadership at the governance level. Of all the criticisms I could level at a board -- failure to fund raise, failure to hold management accountable, failure to bring in new blood and the rest of it -- courage has deserted the boardroom. Everyone looks good on the downhill. But races are won on the uphill.

Risk assessment is a factor in any enterprise. In the best of times many nonprofits seem inherently risk averse. Over the years I have used this model many times to help clients think about risk as they contemplate one course of action or another:

HIGH RISK- LOW RETURN

LOW RISK-HIGH RETURN

NO RISK-NO RETURN

A board must be prudent in the stewardship of a nonprofit.Prudence yes, paralysis no.