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Roundtable Discussion: Small Charities Speak Out

July 1, 2007


Although our long term goal is to rate every charity in American that seeks support from individuals, for now, we have had to limit our evaluation to the 5,200 largest charities (ten times more than anyone else has ever attempted to rate). Together, these organizations account for roughly 80% of the giving in our country. That said, we know that many of our users also support charities that are too small to qualify for our review. And we know that these organizations make important contributions to the philanthropic sector often with little, or no, recognition of their efforts. So, we decided to organize a roundtable discussion among the leaders of several smaller charities to give them the opportunity to share their unique point of view.

The Contributors

The Conversation

Charity Navigator: Have you been harmed by the public's distrust of large nonprofits?

Nicole Lewy Drummond
Nicole Lewy Drummond

Mt. Pleasant Animal Shelter
"Non-profit organizations should be managed like a successful business, held accountable for their use of funds, and stay true to their mission."

Nicole Lewy Drummond: In the past we have seen donations decline in response to newspaper reports of local and/or national charity abuses. We have seen both actual dollars, as well as, number of donors decline due to negative publicity about nonprofits. Mt. Pleasant understands the need to inform donors that their donations are being used wisely, and we are proud to show our donors how their financial support makes a difference in the lives of the homeless animals residing in our shelter. We invite our donors to see first-hand how their donations benefit our animals by offering tours of our shelter. Non-profit organizations should be managed like a successful business, held accountable for their use of funds, and stay true to their mission.

Martha Kaley: It is difficult to evaluate whether Friends for an Earlier Breast Cancer Test has been harmed by distrust. It is prudent for anyone who is so generous as to donate to a charity to be educated about non-profits in general as well as specific non-profits. Healthy skepticism is good if it precipitates further understanding. It can, however, become a rationalization for not donating, which is harmful to us all, not just organizations.

Margot Andrew-Anderson: Since we are a smaller organization, the public has actually favored donating to us, as they see exactly where their donation is going.

Gemma VanHole: Learning Lab is a smaller nonprofit in a community with a population of less than one million people. Because of this, I believe it is easier for our donors to have some kind of personal connection to the Learning Lab that encourages them to give (personal contact with staff or board member, more opportunities for staff to meet and interact with the public in general, etc.). No, I have not felt this is a problem for our organization.

CN: The nonprofit sector is literally comprised of over 1 million organizations, many of which are relatively small and offer the duplicative programs and services. What sets your organization apart?

Fred Nathan
Fred Nathan

Think New Mexico
"...our small size provides an advantage in that we can provide a high level of personal interaction with supporters who want to become more involved..."

Fred Nathan: Think New Mexico is an independent, results-oriented think tank serving New Mexicans. We are relatively unique in at least three ways: First, we are results-oriented and are not content to simply issue white papers and cross our collective fingers and hope something good happens. After we develop a policy report, we advocate for our solutions with the governor and the legislature. We also build coalitions around our solutions, secure legislative sponsors, and draft the legislation. Second, we only work on one topic per year and follow it from the initial research and development stage through to its enactment into law and final implementation. Third, unlike most think tanks, we are truly nonpartisan: our board is composed of Independents, Democrats, and Republicans (including a former Republican governor and a former Democratic attorney general). We research and advocate for common sense policy solutions that benefit all New Mexicans, especially working low and middle income families.

Margot Andrew-Anderson: Surprisingly, there are fewer and fewer organizations working specifically with children and youth living with HIV and AIDS. With so many government funding cuts to AIDS organizations, many are folding. In addition, Camp Laurel is one of the very few, if any, who provide services for youth 18-21 living with HIV and AIDS. So we really do provide unduplicated programs and services for our clients.

Gemma VanHole: In Boise and the surrounding counties Learning Lab's family literacy program, Preschoolers & Parents as Partners, remains the only on-site program for the four-component family literacy project. The Lab's Adult Basic Skills and English Language Learning programs are unique in their computerized instruction as the main service delivery.

Marth Kaley
Martha Kaley

Friends for an Earlier Breast Cancer Test
"The goal of Friends for an Earlier Breast Cancer Test is to work the organization out of business. Once our mission is achieved, there is no need for the organization to duplicate the work that others are doing."

Martha Kaley: Friends for an Earlier Breast Cancer Test is the nation's only non-profit focused solely on one specific issue, which is identifying a biological test to detect breast cancer. This is a focused, attainable short-term mission which, when achieved, will change the picture of breast cancer, by removing the fear and burden of discovery from the patient through the patient entering treatment far earlier than is now available and thereby minimizing the impact of the disease on the body.

The goal of Friends for an Earlier Breast Cancer Test is to work the organization out of business. Once our mission is achieved, there is no need for the organization to duplicate the work that others are doing. This is such a science changing issue that it is, however, imperative that it be recognized as a stand alone issue and not be muddled into the global "breast cancer research".

Nicole Lewy Drummond: Mt. Pleasant Animal Shelter firmly believes in our mission to give adoptable, homeless animals a second chance at a new life. For 35 years, we have stayed true to our mission and this makes us unique. Our role in the animal community is to pull animals from overcrowded shelters and save their lives, without Mt. Pleasant they simply do not have a chance. In addition, we offer one-of-a- kind programs, such as Project SASHA and Nicky's Second Chance Fund, which directly assist the animals and the community.

We are a small shelter with a relatively small donor base at this point, so what we do is to capitalize on our size by treating our donors as family. We handwrite thank you notes to our donors, invite them for tours, hold events in their honor, and keep them informed as to what is going on at the shelter. We cultivate relationships so that a donation is not a one time contribution, but rather an ongoing commitment to the shelter. In addition, we provide services to the public that go above and beyond what other shelters do. All of our animals receive topnotch veterinary care to make certain that only healthy pets are adopted out. In addition, our dogs are temperament tested and given behavior modification training by the two certified master trainers on staff. We put in this extra effort to prevent our animals from being returned because of behavioral problems.

Cheri Brown Thompson
Cheri Brown Thompson

The Healing Species
"Healing Species has not chosen to merge with another organization, however, we partner closely with other organizations, working cooperatively on a daily basis with many other charitable as well as business partners."

Cheri Brown Thompson: Healing Species is set apart from other organizations because we are the only ones who provide the service we offer. We are the only animal-assisted, (with rescued dogs), violence-intervention and character education program that goes into school systems and juvenile justice incarceration facilities with our award winning and proven-effective curriculum. We are the only character education program that addresses issues of the heart to intercept crime, bullying, and violence.

Margaret Bullens: Although I would agree there are numerous organizations that focus on child sexual abuse prevention, our organization apart from the rest in numerous ways: (1) we are a national organization leveraging our relationships to support programs in local communities (this includes creating or promoting programs for grassroots implementation in communities across the country), (2) our programs are positive and empowering, (3) we have donated our program to the national Neighborhood Watch program...thus, making it available to any interested community through their local law enforcement, and (4) in less than 2 years, we've gained the respect, recognition and endorsement of all Sheriffs through the National Sheriffs' Association and the Major County Sheriff's Association.

CN: Why not merge with another similar institution in order to realize economies of scale?

Nicole Lewy Drummond: We were founded as a merger when two local rescue organizations came together to create a physical shelter, now name Mt. Pleasant Animal Shelter. As an animal welfare organization, profit is not of paramount concern. While it might be more economically efficient to merge with another shelter, we relish our autonomy. The concern is that we might lose our ability to provide the high quality care and services that we do. Our reputation is extremely important to us. Our theory is that if we provide people with healthy, well-behaved animals, they acknowledge that with donations and return to us when looking to adopt another pet.

Gemma VanHole
Gemma VanHole

Learning Lab, Inc.
"... there is often some financial and training support that national organizations provide to their local chapters. As an independent nonprofit we do not have the benefit of these resources."

Gemma VanHole: There is not an opportunity to merge the Learning Lab's mission into or with another area nonprofit's mission. However, there are many and varied opportunities to collaborate so resources are shared and combined. For example, Learning Lab's strongest collaborative partner for family literacy is the local Head Start agencies. The agencies have a defined system for client referral and sharing of client information. Head Start family advocates have the opportunity to work with Learning Lab staff so they can address specific family issues and special needs, training opportunities and special projects for clients such as a family math night.

Fred Nathan: Because we occupy a unique niche in New Mexico, as an independent, results-oriented think tank, there is no other organization in New Mexico for us to merge with. More importantly, we do not subscribe to the view that bigger is better. The results that we have achieved have been accomplished with a staff that has never numbered more than 3 full-time and two part-time employees and a budget of $350,000, without the benefit of a development director. Despite, our tiny size we have also managed to keep our fund-raising costs and administrative costs as a percentage of our budget to below that of the big national think tanks that Charity Navigator routinely evaluates.

Martha Kaley: To keep the focus specific is critical for recognizing the impact that a biological test will have and also will further the opportunity for success. This is a unique, specific goal oriented effort that must remain as a solitary entity.

Cheri Brown Thompson: Healing Species has not chosen to merge with another organization, however, we partner closely with other organizations, working cooperatively on a daily basis with many other charitable as well as business partners. However, no other organization offers our unique service.

Margaret Bullens: We have strong established leadership with a proven track record in leveraging significant in-kind, appropriate allocation of resources, performance-based measures, and quality programs. We would not want to risk these positive traits. We do recognize however the importance of creating a forum for like-cause organizations and providing "voice" to similar issues and concerns by SAFENOWPROJECT®.

CN: How are you more effective than a larger charity addressing the same issues?

Margot Andrew-Anderson
Margot Andrew-Anderson

Camp Laurel Foundation
"We have had to become more and more creative in our fundraising ideas. It is competitive."

Margot Andrew-Anderson: We are a smaller organization, and with that are less politics. Larger charities tend to be very political, and we are not. Our expenses are low with 80% going to program expenses. Sometimes it is good to be a smaller organization. Things get done and done faster.

Gemma VanHole: Learning Lab's funding is private and we are governed by a board of directors. This affords us the opportunity to be flexible to meet current client needs, address new client issues that come our way, and easily adjust or start new projects to meet a need. We are not confined by government regulation or national agendas that larger nonprofits deal with.

Cheri Brown Thompson: As a smaller charity, we are very involved and "hands-on" with our service. As the founder and director, I still go into the classrooms and teach as a Healing Species instructor, along with our ten other instructors who are also in schools and facilities five days a week all across our state.

Nicole Lewy Drummond: We recently received a letter from one of our donors who stated that they "appreciate how we maintain personal contact with our supporters, and we stay ?personal' in our cause."

Fred Nathan: Think New Mexico's small size allows us to be extremely responsive and flexible, which is crucial when working on policy reform in a political landscape that changes daily. We are able to adapt our strategy as necessary to meet new challenges to our policy reforms without having to "call the national office" and work through layers of bureaucracy. Think New Mexico routinely receives favorable local media coverage because of the David versus Goliath fights that we take on and win. Also, in a small, western state like New Mexico, people are skeptical of big institutions like the Federal government and corporations.

CN: Are your donors different in some way from those that support larger, brand name charities?

Margaret Bullens
Margaret Bullens

"...all nonprofits should be held accountable."

Margaret Bullens: So far...YES! Our donors recognize our ability to deliver at an efficient and productive rate. They know their funds have made a significant contribution to the prevention of child sexual abuse and support a growing, leading national organization. We have developed very strong bonds with our donors and provide regular updates on our progress so they can celebrate the success they have made possible.

Margot Andrew-Anderson: I think they are the same... people who care are people who care.

Gemma VanHole: I don't believe our individual donors are necessarily different, however, our business and corporate donor often are. It is not unusual for large national chains such as bookstores and department stores to have national agendas for all their giving and even specifications that donations only go to large national charities that can provide more publicity for gifts received.

Martha Kaley: It seems that many of our donors probably support larger, brand name charities as well. However, for our donors who totally understand the focus, I think their support is much greater because they realize that this mission is specific and attainable.

CN: In response to the Senate Finance Committee's threat of increased oversight of charities, The Independent Sector spearheaded a panel that released a set of standards for self-regulation. Do you feel that the issues unique to smaller charities were taken into account when those standards were written? If you were to make one recommendation for serious reform, what would it be?

Fred Nathan: One of the few disadvantages of being small is that we do not have time to review reports like the one described above from Independent Sector, so we have no position on it.

Margaret Bullens: I am not well versed in the new standards; however, we agree that all nonprofits should be held accountable.

Nicole Lewy Drummond: As a small non-profit organization it is important that we commit ourselves to a set standard and hold ourselves at a high level. We as an organization are currently enhancing our Governance and Control practices. In addition, over the past year we have created a better and expanded Board with members who are able to lead the organization down the right path. We have continuous committee oversight and a yearly Independent Audit. These allow us to continue to operate to the standards that are set regardless of our size.

CN: Cause related marketing endeavors are on the rise. Charities that represent popular causes and who can help firms improve brand loyalty among their target market, such as Susan G. Komen for the Cure, have had incredible success in establishing these partnerships. As a small charity, have you been successful in forging these types of relationships with for-profit firms? If not, what has been your biggest obstacle? If so, what are the pros and cons and have these endeavors had any long term impact in your charity's ability to cultivate new donors?

Gemma VanHole: Learning Lab has excellent relationships with several for-profit firms, most notably Key Bank. Key Bank has been the title sponsor of our annual fundraiser, Lunch for Literacy, for many years. This is beneficial to Learning Lab not only because of the financial support this sponsorship provides, but also for the credibility the ongoing support of such a large corporation gives the event and the organization.

Martha Kaley: Cause related marketing is a fascinating phenomenon. It seems to fit with our culture of sound bytes and bullet points, i.e. it doesn't require much thought. Realizing that corporations need to partner with organizations that give a higher profile, it obviously impacts smaller, less familiar charities. Friends for an Earlier Breast Cancer Test has had some success in this approach, but it does not merit that a large portion of our efforts should be directed towards this. At this point in time it would seem reasonable to expect that there is an impact on the cultivation of new donors.

Cheri Brown Thompson: Healing Species has not yet partnered with a brand name, and our biggest obstacle to this is our small size. It takes resources and "marketing outreach" to solidify such a partnership, and Healing Species is run by a skeleton crew that mainly stay busy providing service, working in the field. It's our goal to expand to this capacity, however, and we are now just hiring a full time Director, for the first time, and this will be one of her goals!

Nicole Lewy Drummond: Recently, a PetSmart opened right next door. We are cultivating a relationship with them that has proven to be very beneficial. They house some of our cats in the store, making them more visible to the public. We maintain a donor table in the store where people can stop by to get information about the shelter or make a donation. In addition, PetSmart offers a coupon book to people who adopt from us, which encourages people to adopt from us while getting business for PetSmart. Our obstacle has been trying to get PetSmart to understand that they would benefit as would we if they were to use their ample advertising resources to promote more adoption days at the shelter.

CN: Rather than simply writing a check to a deserving charity, the public seems to continue to seek new, creative ways to support nonprofits. What impact has this trend had on your organization?

Margot Andrew-Anderson: We have had to become more and more creative in our fundraising ideas. It is competitive.

Fred Nathan: Many of Think New Mexico's social investors also contribute to our organization in other ways, often by volunteering their time assisting with policy research, advocating for our solutions with their legislators or simply answering the phone for us. Again, our small size provides an advantage in that we can provide a high level of personal interaction with supporters who want to become more involved, and can use their talents in many ways, so that they are valued participants in Think New Mexico's work.

Margaret Bullens: We have benefited significantly from in-kind support: photography, video production, website design and hosting, print design and printing, illustration, etc.

Gemma VanHole: This trend has had a mostly positive impact on Learning Lab. Corporate donors often request representation on our Board of Directors and are willing to work with us on placing someone on the board that has expertise in an area of need. In addition, we have even had businesses that will support their employee's volunteer time tutoring or helping with such things as marketing and fundraising at the Learning Lab. We also often receive in-kind donations of office furnishings and supplies.

CN: What obstacles must your organization overcome that you believe a larger nonprofit would not have to struggle to surmount?

Margaret Bullens: We are challenged in many ways: 1) our program success has been quicker than the development of our infrastructure?leaving us in desperate need to build infrastructure, 2) we create programs for national launch and most donors would rather keep their dollars local (not sharing the end product with other needy communities), 3) if we had more name recognition, I believe we would attract the donors and dollars needed to match our goals and activities.

Fred Nathan: The biggest challenge we face is that we are invisible to the national foundations who could help us to diversify our revenue base. Larger nonprofits have public relations specialists and professional grant writers to promote them, and we have found that it is often difficult for smaller nonprofits, like Think New Mexico, to get even a hearing from the national foundations, even when we are exploring innovative strategies that advance the goals championed by these same foundations.

Margot Andrew-Anderson: Visibility. It is hard for smaller non-profits doing extremely important work to get their name out in the public.

Gemma VanHole: There is often some financial and training support that national organizations provide to their local chapters. As an independent nonprofit we do not have the benefit of these resources.

Cheri Brown Thompson: The largest obstacle we face is the constant, chronic fundraising! Charities that have large name recognition, or are nationally recognized, receive support on a more continuous and consistent and regular basis, with less effort towards that end.

CN: The public, the IRS and the media are highly sensitive to what they perceive to be rampant, excessive nonprofit CEO compensation. Is your charity's compensation practices an important issue with your donors, and if so, should it be?

Fred Nathan: We strive to be completely transparent and accountable to the public and to our donors, and we always publish all of our financial information in our annual reports, which are available on our website. This includes the percentage of our revenue that is spent on fund-raising and administration. Maybe that is why in our eight year history, no one has ever asked for that information. My salary is $77,175, which makes me the highest paid employee at Think New Mexico. Excessive nonprofit CEO compensation is a national scandal and could be stopped relatively quickly by the national foundations that subsidize it.

Cheri Brown Thompson: Yes, it should be! I think it is outrageous some of the CEO compensations. It is unconscionable when there are literally people starving in this world, and so many hurting. At Healing Species, as the founder and CEO, I take no salary whatsoever, and have taken none for the 7 years we have been in existence. I have not even taken out my own expenses. This is my life's calling and purpose. I realize that I am in a unique situation and am supported by my spouse, however, I have dedicated every dollar that has been raised back into growing the company. I fully believe this is why, in only seven short years, we have grown to the level we are. Each of our instructors takes a modest salary. I realize that to recruit competent people competitively, there must be sufficient compensation. And as still an almost fledgling organization, we would not be in the position to pay exorbitant salaries. Each of our instructors could be paid more elsewhere, but have chosen to dedicate their lives to this mission and purpose.

Margaret Bullens: Our donors recognize the value and contributions made by our CEO/Executive Director. Our compensation structure is appropriate and would not be considered excessive.

Nicole Lewy Drummond: Donors should be aware of how funds are spent, including the compensation of an organization's officers. Through organizations such as Charity Navigator, it is fairly easy for donors to find out the salaries of the CEO's and Directors. It is then the responsibility of the donor to make an informed decision on whether that organization is responsible with their funds.

The Mt. Pleasant Animal Shelter staff is not doing their job for the money, but because of their dedication to animal welfare. It is a job that you do out of love without regard to salary, so that is not an issue with us.

CN: How has the internet changed the way you market your charity?

Gemma VanHole: The internet has presented us with many new marketing opportunities. We use our web page for everything from offering general information about our programs and services, advertising job openings and special events, accepting donations, and providing organizational updates to donors and the community. Our biggest challenge is developing and maintaining our web page and building an email list of supporters. The internet, of course, also creates added cost to the organization for such things as web page updates and maintenance. But on the whole, we embrace the benefits the internet provides Learning Lab and our supporters.

Martha Kaley: The Internet has changed the method of communicating in our society in general. It has opened a broader base of potentially interested people to become connected to the organization. However, with these opportunities come significant challenges of website creation and management in order to be visible and competitive. Marketing now is far more complicated but much more expansive.

Margaret Bullens: We utilize our website for outreach, fundraising and information exchange. We have the ability to involve significant numbers of people through regular newsletters, discussion groups, links, and other resources. Our website contributes to our branding goals.

Nicole Lewy Drummond: The internet has allowed us to market Mt. Pleasant in a faster, more direct method. We post our adoptable animals, mission, upcoming events, ways to support our organization, our adoption process- all online. With a few clicks of a mouse, people can see our animals, fill out an adoption application, or sponsor a homeless animal.

CN: How has the internet changed the way you actually run your charity?

Fred Nathan: The Internet has significantly increased Think New Mexico's effectiveness in connecting our supporters to their elected representatives. This is crucial because our strategy for achieving positive social change is by advocating for policy reforms. We leverage our email listserve of about 4,300 New Mexicans and a database of the contact information for state legislators and media outlets across the state to empower those who support our policy reforms to deliver that message effectively to their legislators. Relatively few organizations are currently utilizing such online advocacy with the New Mexico state legislature, which gives Think New Mexico an advantage in advocating for our policy solutions.

Margot Andrew-Anderson: It has given us a wealth of information on how other non-profits run their organizations and how we can run ours better.

Martha Kaley: The Internet helps the organization significantly with internal communications as well as external communications. Essentially, budgeting has changed dramatically because of the need for the Internet.

Cheri Brown Thompson: The Internet has made it possible for Healing Species to have individual instructors stationed all over our state, and we can "meet," discuss, share, and converge on business all throughout the day from our respective locations! We can even write grants collaboratively together, each individual from their own home office!

Nicole Lewy Drummond: Currently, we are looking into ways to reduce our expenses by moving to a more internet based fundraising plan. We hope to reduce our direct mail and postage costs by contacting our donors through email and web based information.

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