Survival of the Poorest
A glut of nonprofits compete to demonstrate the most need
by Lisa Baker
a stream of precious dollars pours southward for the draining and rebuilding
of the Hurricane Katrina states, some Oregon nonprofits, specifically
those whose mission is far removed from disaster relief, feel themselves
floating toward an uncertain future.
A series of crises—9/11, the tsunami of 2004, and
this most recent storm-caused catastrophe—have prompted Oregonians
to give generously, something that gladdens the hearts of anyone whose
calling is emergency humanitarian aid.
But charities outside that mission know that with each large-scale
disaster can come a decided sucking sound in their own budgets as contributors
redirect their dollars to more pressing needs.
Even those arts, environmental and local social service
charities that have reaped healthy donations in the face of disaster relief
say it’s not enough to make up for recent losses in government funding
due to budget cuts, losses in invested funds, or for increases in need.
A case in point: Habitat for Humanity, whose mission is
to build low-cost housing for low-income people. The national real estate
boom has spurred the cost of land and building materials ever higher at
a time when recession-battered residents need help getting into permanent
“We can’t compete with big builders for land,
so land is further and further out of reach for us to purchase and keep
affordable for a family,” says Portland Habitat’s Executive
Director Steve Messinetti. “Meanwhile, we’re not seeing many
donations of land, probably because it is so valuable.”
It would seem a typical occupational hazard in the teeter-totter
world of nonprofit management. But in Oregon, there are complicating factors.
One is the rise of private funding in public education,
where local foundations make donations for everything from school sports
to computer equipment. Donors who might have devoted dollars to any number
of charities find themselves called upon to give to their children’s
Another and likely more critical factor is the modest number
of locally-headquartered corporations, which are a traditional source
of nonprofit grants. The number has dwindled further in Oregon in recent
years as companies have relocated or merged with out-of-state corporations,
some redirecting their giving to their new communities. Other companies,
while no longer locally-based, are still on the go-to list and participate
in Oregon projects. Louisiana-Pacific, Meier & Frank (now owned by
May Department Stores Co.), Fred Meyer (now Kroger), Willamette Industries
(now Weyerhaeuser), and U.S. Bank are just a few of the big businesses
that have changed location or ownership in recent years.
As corporate deep pocketbooks are snatched up by other states,
the number of nonprofits in Oregon is swelling. Kay Sohl, executive director
of Technical Assistance for Community Services, whose job it is to help
nonprofits stay on their feet, says competition for survival is keen.
“We’re creating new nonprofits in Oregon at
a rate of hundreds every year,” she says. “Now, some are social
clubs, but many are intended to be charities, so there’s a certain
amount of fretting about whether we need all these new organizations.”
Fretting because, while some groups genuinely have an original
mission or at least a new way to approach a problem, others are duplicating
the work of existing organizations.
Directors of several nonprofits agree.
They say start-up organizations are muddying the waters
where donors are concerned, siphoning money from established groups and
then dying from lack of efficiency a year later.
Carole Morse, president of the PGE Foundation and manager
of community giving for Portland General Electric’s corporate side,
says the situation is serious. “I hesitate to use the word crisis,
but there has been this proliferation of nonprofits and the new organizations
that come…Let’s just say there is some redundancy involved.
I’m always asking, ‘Do we really need to set up a new 501(c)3?’”
Morse says three HIV-AIDS nonprofits recently sprouted in
Portland, each taking on as its mission a small part of the AIDS puzzle.
One was formed to support women and children with AIDS, its primary calling
a camp experience for AIDS-affected children. Another offered activities
and support for kids with AIDS. Both missions ended up needing rescue
after having captured initial grants. Their rescuer: Cascade AIDS Project
(CAP), Portland’s longtime resource for AIDS sufferers. Thomas Bruner,
a consultant who works with CAP, says the organization feels the pinch
when new groups come to the fore.
“It’s more competitive than it’s ever
been, which means it’s just harder to get your message heard and
your brand recognized through the clutter,” Bruner says. “You
have to work harder, spend more money differentiating yourself. It’s
been an enormous challenge over last decade.”
One of the reasons for the proliferation is the relative
ease of nonprofit set up, Bruner says. Not only does the process require
little in the way of legal expertise, but philanthropists are especially
drawn to start-ups. “They don’t like to give ongoing support
to organizations. They love to give start-up funding, new venture funding.
They love to birth new endeavors,” he says. “And so, in the
nonprofit world, there is constant tension to do new things, start new
things, in order to get the dollar.”
Bruner says he hears complaints from funding organizations
about the huge number of nonprofits requesting money, but he says, “Somebody’s
writing these checks to get these groups off the ground initially, so
they can’t turn around and complain about the nonprofit sector being
so glutted. I’ve said to many donors, ‘Well, I don’t
disagree, but you have birthed this monster…Some of these groups
would never have gotten further than the kitchen table if you had not
funded them to begin with.’”
He and other directors of established nonprofits say newcomers
would do well to merge with existing groups rather than forming their
own. But they say newcomers are often resistant to such an idea.
The competition is affecting environmental groups, too.
Kevin Kasowski, development director for the Oregon Environmental
Council, says the number of conservation groups makes raising money difficult.
“It’s a significant factor. We know of 30 different organizations
here in Oregon that have a professional staff—not just a local volunteer
group—that are actively fundraising. And so we hear from a lot of
prospective donors that they’re being asked by a lot of nonprofits.”
Morse, of PGE, said the number of formal funding requests
to PGE Foundation has nearly doubled since 2001, but “I don’t
know if that really tells the story because the calls we get have been
increasing over the years as well. A lot are organizations used to getting
government funding and now they don’t and they need help. Even the
government comes to us,” she says. “Schools come to us, and
we then give to their education foundations.”
Morse says along with serious requests come the ridiculous.
“It amazes me what people ask us to do. One guy wanted us to give
money to build a parking garage under his church…and he was earnest.”
One result of the phalanx of outstretched hands is a major
pullback by funding organizations—not a withdrawal of funding, but
a more careful targeting, Morse says. “It’s why companies
like ours are more strategic. We ask ourselves what we can do well. What’s
good for our customers? What do our employees want to do?”
Duncan Campbell, founder of an Oregon timber investment
firm who is well known for his charitable giving, says that while there
is “a lot of emotion” in the creation of each new nonprofit,
“There’s a lot of rebuilding of the wheel rather than collaborating
or joint venturing or becoming a part of something—a better thing.
It’s hurting the effectiveness of programs.”
Campbell says that of the funding requests he receives,
he favors those with evidence-based requests—those that take on
a demonstrated need with a solution that works. “There’s permissiveness
in our culture that’s encouraging someone with almost any idea to
start something. Personal egos are involved. Those don’t last very
long, maybe nine months to two years, and then they fall away. In the
meantime, they clog up the system.”
Nowhere is the overabundance more pronounced than in the
arts, where new groups seem to pop up daily, especially in the realm of
dance and music, funders say.
The newest are two nonprofits, each created to perform concert
versions of musicals, and three other organizations created to interest
low-income children in instrumental music.
“On the one hand, people find our region fertile ground
for developing arts programs, but our funding for it is abysmal,”
Morse says. “There’s no government funding for the arts like
there is in other states. I see on the (PGE) Foundation side a huge number
of arts requests.”
Virginia Willard, who tracks arts giving by corporations
for Northwest Business for Culture and the Arts, says the biggest donors
to arts—aside from PGE—are Wells Fargo Bank and U.S. Bank,
but that arts organizations are increasingly going to small businesses
for help. “We depend on small businesses. They aren’t as visible,
but they are vital here,” Willard says.
A help to arts organizations is the newly formed state Cultural Trust,
which matches contributions to certain arts groups with tax credits and
gives grants each year directly to organizations that promote arts and
culture. While the trust is increasing its giving—grants totaled
$1.3 million this year compared with $772,602 last year—it takes
time to build wealth significant enough to defray costs of Oregon’s
growing cultural sector, arts supporters say.
Lucy Buchanan, director of development for the Portland
Art Museum, says it’s difficult to wait for cash support to catch
up with the vision she and others have for world-class facilities in the
Northwest. It’s been especially difficult on the museum’s
expansion plans. “Let’s put it this way…we launched
our campaign to renovate two weeks after 9/11.”
While competition will always exist between humanitarian
issues and ongoing programs such as the arts, Buchanan says she believes
the arts are a quality of life issue and an important support to the economy
of a community. She says a city that is looking to draw new businesses
to its core—businesses whose employees and prospective clients alike
are drawn to a city alive with culture—would find the museum an
asset. “You really need a great artistic presence for economic vitality,”
Although donor support has doubled the museum’s budget
in recent years and fundraising for the museum’s $25 million expansion
went well, difficult economic times made it “a very challenging
time for the museum, probably from 2002 through 2003. Even 2004 was really
hard,” Buchanan says. “But we have seen since last summer
some loosening of things, a little more confidence among folks that the
economy is stabilizing and that the world is not going to end with terrorism.”
But it is terrorism and the natural disasters in recent
times that have prompted Oregonians who never gave before to write checks.
And some of those who began giving with 9/11 or the tsunami are continuing
Matthew De Galan, chief development officer for Mercy Corps,
which offers humanitarian aid around the world, says that after 9/11 and
then again after the tsunami in Indonesia, his organization saw gifts
from donors they’d never heard of before. For the past two years,
gifts from Oregon and Washington have combined to comprise half of all
Mercy Corps funding domestically.
He says that with each new disaster, each new pressing need,
more people dig into their pockets. “Everybody steps up,”
De Galan says. “And corporate donors are giving at levels never
seen before—just amazing corporate generosity.”
But disasters come and disasters go. In between, there is
It’s what they call it when the same philanthropists
are asked again and again to come to the rescue. Especially for an ongoing
need that doesn’t appear to be satisfied with any amount of money.
Kay Sohl, executive director of Technical Assistance for
Community Services, says philanthropists of every stripe grow weary of
some ongoing social causes that don’t seem to diminish despite pots
of money. Homelessness, a fashionable cause a few years ago, is now less
favored for targeted giving because it seems in the eyes of donors that
the problem has worsened, she says. “Then there’s a sense
of, well, we’ve been giving on that and we see even more homeless
Bruner says new causes often upstage older ones. Some come
into vogue because they are true crises; sometimes, they simply capture
the imagination of the media and donors alike, he says.
“The world is full of important issues, but we have
a short-term attention span. We love to rally our troops to fight the
battle, get the victory and then move on. It’s harder for us to
dig in for the long haul; we get excited, but then we get bored.”
The “in” issues, aside from natural disasters
in recent years, have been breast cancer, and more recently, methamphetamine,
Bruner says. “Nobody’s arguing that meth is not at a critical
stage or that finding a cure for breast cancer is not crucial…That’s
the hard part. They are all worthy causes. All important.”
The only answer is to broaden the base of donors, nonprofit
It’s particularly necessary as the older guard of
givers and today’s successful baby boomers pass on their fortunes
to their heirs.
Just what, the nonprofits ask, will the heirs do with all
“That’s the $64 million question,” says
Bruner. “There is a lot of discussion about that in the nonprofit
industry nationally. And it makes sense: Over the next generation, we
will see the single largest transfer of wealth at a time when the sum
of indications is that the recipients of that wealth are not as civically
engaged or as generous as their parents’ generation.”
It’s why nonprofits are reaching out to the younger
generation now, hoping to groom them for a life of generosity, Bruner
says. “We have to give our time and attention to the future generation
of givers, engage them at a young age even if their giving at the moment
is at a low level.”
And so, it’s time to retool the old, staid fundraising
events to appeal to youth.
It’s something the Children’s Relief Nursery
has taken to heart. The organization, dedicated to preventing child abuse,
launched its Portland Iron Chef fundraiser, modeled on the melodramatic
but popular Food Network cooking competition. It was rewarded with some
fresh-faced donors. “I think it captured them pretty well,”
says Kathy Walsh, the nursery’s development director. Another gala
event, an arts celebration in the trendy Pearl District, auctioned off
rocking horses, each embellished by artists. Food was served by Aura,
a new restaurant that molds itself into a contemporary chic shape that
draws young downtown professionals. “And the DJ was playing some
‘with it’ young music,” Walsh says. “It was a
youthful event…That crowd was quite young and hip and…with
Walsh says capturing youth is key to the future for many
charities, but she worries potential donors in their 20s and 30s may take
more convincing because they “never had any hardship…That’s
really a generalization. It’s not true for everyone, but a lot have
never had to really worry, especially in Oregon where we’ve had
a boom time for 20 years now.”
Portland Art Museum also is in the hunt for youth, using exhibitions focusing
on contemporary works and a “Young at Art” membership program,
which offers certain incentives—“late night” theme parties,
for example—in exchange for a small amount of yearly cash. It even
gets with the youth lingo, promising members “the goods” when
they sign up. A sample museum party invitation: “Food, wine and
cocktails will be available as you groove to beats from Portland's hottest
DJs. Dress fine for this once in a lifetime opening event! Join YAA that
evening and apply your entrance fee to your membership - plus enter to
win a trip for two to Hawaii!!!”
Bruner, of Cascade AIDS Project, says his group in the old days threw
a slew of what he calls “Cast of thousands-Cecil B. DeMille”
events, including a fashion show and a “black tie Oscar night thing.
It was dreadful. Two didn’t make any money. One lost money and all
six drove everybody crazy because we were going back to the same well
Retooled, Cascade now puts on only two events a year. One,
“Art for Life,” targets a higher socio-economic demographic.
A second event in the fall, AIDS walk, draws from a wide spectrum of givers.
“We strategically targeted different kinds of people on purpose
so the events don’t compete with one another for attendance or sponsorships.”
The result: A cool million—three times the money raised during six
gala events previously.
But not everyone aims for hip and cool. Ernie Unger doesn’t
do much in the way of galas.
Even so, the Eugene Mission he directs receives about $1.56
million each year from a mix of sources, from various Lane County church
donations to proceeds from newspaper recycling.
Executive director of the Eugene Mission for the past 45
years, Unger is familiar with lean years—like 2001—a tough
year for many local charities. But he doesn’t worry much. Doesn’t
spend time designing the next new-fangled fundraiser. When asked about
money, he says, “Well, I think it’s going pretty well.”
Why so well?
“I think we’re pretty simple here,”
he says. “We do food, shelter and clothing. We don’t try to
do a multitude of things.”
The other key, he says, is philosophical. Unger says it’s
about trusting, not in people or in government, but in a greater power.
“We just trust the Lord. We stand on His promise that He’ll
take care of us.”
BrainstormNW - Oct 2005