Building a legacy | A Maine foundation challenges community nonprofits to boost endowments
Here’s a conundrum we face as a state that one Maine foundation has sought to address in a creative way: The majority of our nonprofit organizations struggle mightily with financial sustainability yet they provide the vital services that sustain our communities. In fact, 74% of Maine’s nonprofit organizations operate with budgets of less than $500,000, says Brenda Peluso, author of the 2010 Maine nonprofit sector impact report produced by the Maine Association of Nonprofits.
As a way to begin reconciling this bitter irony, the Maine Community Foundation, in recognition of its 25th anniversary, launched the 25/25 Nonprofit Endowment Challenge which resulted in 19 nonprofits acquiring $50,000 each in permanent endowed funds to support their organizations.
What makes the 25/25 program particularly compelling is that MaineCF focused it almost entirely on building the long-term sustainability of the small community-based nonprofits that form the connective tissue of our most rural communities. To build these funds, MaineCF required that the selected organizations raise $25,000, which the foundation matched.
Among the 19 organizations selected were Acadia Senior College on Mount Desert Island; Centre Theater in Dover-Foxcroft; Mahoosuc Land Trust in Bethel; The Great Pond Land Trust in Orland; Stonington Opera House in Stonington; The Western Mountains Alliance in Farmington; and Maine School of Math and Science in Limestone.
Meeting the challenge
A couple of myths surrounding endowment building often color conversations at the board level. One is that large, established organizations, like symphony orchestras, hospitals and museums, should focus their fundraising efforts on building endowments, but small, grassroots organizations should not because they come and go over time, depending on community need and interest. The second myth lies on the other end of the continuum and says that because an organization has limited revenue streams, it should focus first on building an endowment.
According to Laura Young, MaineCF’s vice president of philanthropy, the truth about endowment building as a useful capacity-building strategy probably lies somewhere between both poles. Young says MaineCF selected organizations that were financially secure, had been in existence for at least seven years, had no endowment or an endowment of less than $250,000, and were effective contributors to their communities. In addition, the foundation looked for organizations with strong board leadership and past fundraising successes, including 100% giving by the board members and staff experience with securing financial gifts. Participating organizations had 18 months to raise their match.
Acadia Senior College is a poster child for the type of organizations the MaineCF program sought to support. “I thought we were too young to apply even though we are a bunch of old fellows,” recalls Bill Dohmen, a retiree from Philadelphia who helped found Acadia Senior College in 2000. The organization keeps senior citizens of Mount Desert Island engaged year-round in local and national issues and serves as an informal volunteer and board feeder to other organizations nearby. Organizers offer 45 classes a year for 450 people.
Before deciding to embark on an endowment-building program, Acadia Senior College established a business model that supported its offerings. To meet MaineCF’s $25,000 match, the senior college conducted a campaign and exceeded its goal by raising $80,000.
As a small organization, Centre Theater also considered endowment building beyond its grasp organizationally. But when chosen to participate in the program, “We tackled it with relish,” says Janet Sawyer, the theater’s board president. To raise their match, Centre Theater stole center stage with three unforgettable and one-of-a-kind fundraising events, including an evening on Sebec Lake, a raffle for a 1974 Mercedes and the founding of the Maine Whoopie Pie Festival, which attracted 5,000 people.
For Jim Mitchell, executive director of the Mahoosuc Land Trust, the endowment-building challenge enabled his board and organization to strengthen internally by rallying to raise the match, along with an additional $50,000 for a reserve fund to carry the organization through tough economic times. “We have benefitted from these stretch challenges. They have really helped us grow and build capacity,” he says.
The launch of the endowment-building program coincided with the Stonington Opera House’s 10th anniversary, and the organization used it as an opportunity to build a fundraising campaign called “A Tenth of the Tenth,” in which they asked a group of people for $10,000 each -- $7,500 of which went to operating expenses and $2,500 to the endowment. “This was a visionary program,” says Linda Nelson, executive director of the opera house. “I’d like to see funders go one step further by creating a collaborative approach to endowment building. I would like them to ask: How do we identify and prioritize funding to organizations that are critical to our communities?”
Despite the success of the 25/25 Nonprofit Endowment Challenge, the issue of nonprofit financial sustainability remains critical and would benefit, as Nelson suggests, from a sustained, collective, creative and focused effort by funders that recognizes the critical role nonprofits play in continuing to ensure Maine is “the way life should be.”
Elizabeth Banwell is director of program development and strategic initiatives for the Maine Association of Nonprofits in Portland. She can be reached at editorial@mainebiz.biz. Read more of Elizabeth’s columns here.
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