Promising Practices in Revenue
Generation for Community Organizing:

An Exploration of Current and Emerging Fundraising and Grantmaking Practices in Community Organizing

by Sandy O'Donnell, PhD, Jane Beckett, and Jean Rudd


A project of the Center for Community Change
Washington, DC

October 2005

jane_beckett@sbcglobal.net

 

Contents

Summary

Introduction
     Purpose of This Report
     Research Questions and Methodology
     Definitions and Terms
Section One: How Organizing is Funded by Sandy O'Donnell, Ph.D.
     The available research on patterns of organizing funding
     Contemporary quantitative data: the national CCHD grantee database
     Findings
     Analysis
     Conclusion
Section Two: Improving How Organizing Raises Funds by Jane Beckett
     Revenue Sources: Practices and Perceptions
     Strengthening Organizing Fundraising Capacity
Section Three: Enhancing Grantmaking for Organizing by Jean Rudd
     A picture of grantmaker support for organizing from a national database of organizing nonprofits
     The roles of foundations and institutional grantmakers supporting organizing
     Promising strategies to increase funder investments in organizing
     The importance of effective communications in increasing grantmaker (and other donor) support of organizing
Longer Term Challenges and Opportunities Toward Increasing Revenue for Organizing

Appendix I: How One Foundation Came to Support Community Organizing by Jean Rudd
Appendix II: A Framework for Assessing the Strengths and Limitations of Different Revenue Sources for Community Organizing
Appendix III: Methodology
Appendix IV: Instrumentation
Appendix V: Study participants
Appendix VI: Generating Revenue for Community Organizing: An Annotated Bibliography

Notes
Acknowledgements
About the Authors

Summary

"How do we grow or even stabilize when we've topped out our dues income and have to do more and more to keep the level of foundation support we have?"

"Are there any organizing groups that are building endowments, or even cash reserves?"

"How can organizing tap into the energy and wealth of the 527s [1], which raised hundreds of millions of dollars for progressive candidates in the 2004 general election?"

This report began with questions like these and led us, through data analysis and over 100 interviews, to some findings that we hope will be useful in strengthening organizing's funding base and fundraising practices. Among these findings:

• The budgets of community organizing groups are, on the whole, flat and not keeping up with inflation.
• Foundations are an evermore important source of organizing budgets, despite considerable fear in the field that such external funding can undermine organizing strength and autonomy.
• At the same time, there are dozens of examples of high performing organizer-fundraisers, whose work we describe; the single most important factor in their success is that they see fundraising as organizing.
• And also at the same time, more and more members of the foundation community are wrestling creatively with the question of how to increase foundation support of organizing without undermining local ownership, and are creating intermediaries and collaboratives and drawing more peers into the field.
• And yet, serious challenges remain, particularly with respect to appealing to individual donors of all incomes, to communicating excitement and results, and to building a culture that pays much more attention to fundraising.

The sole purpose of this report is to strengthen the revenue base of community organizing. It is authored by a team with 75+ years of experience in funding, fundraising for, and conducting research for community organizing.

The authors thank the 100+ organizers, funders, and other friends of organizing who informed this report. We also thank the Center for Community Change for sponsoring the project, and the Charles Stewart Mott Foundation, the Marguerite Casey Foundation, and the Woods Fund of Chicago for providing funding support. Special thanks to the National Catholic Campaign for Human Development and its grantees for making data available to us.

Section One: How Organizing is Funded, by Sandy O'Donnell, Ph.D.

This section summarizes recent research on funding patterns of community organizing and describes and analyzes how organizing groups recently funded by the national Catholic Campaign for Human Development (CCHD) raise revenue. While CCHD grantees are not completely representative of community organizing, this was the only nationwide data base that the authors could access within a reasonable budget. The "average" organization in our sample was 8 years old, affiliated with a network, staffed by an Executive Director and 2 other staff, multi ethnic in its membership, multi issues and local in its focus, and with individual members. Findings about their revenue bases:

1. Organizing nonprofits do raise revenue from diverse sources. In our sample of 213 organizations supplying data about revenue sources (23 of the 240 did not), 206 had income from grants, 146 from dues, 124 from individuals, 77 from earned income ventures such as service fees, 66 from corporate and union donations, 62 from unspecified grassroots fundraising, 47 from events, 12 from workplace giving, and 10 from their network. 80 had other unspecified sources of revenue. The breakout of various revenue sources:

2. Overall revenue is quite modest. The mean (arithmetic average) revenue budget in 2002 sampled organizations was $207,686; the median (50th percentile), $133,560.

3. Grants are the largest single source of organizing revenue, comprising 62.7% of the sample organizations' budgets.

4. There is great variation within the field in the relative importance of membership dues to the overall revenue budget. Dues supplied 10% of the overall budgets of organizations in our sample. Surprisingly, nearly 1/3 of groups in our sample reported no dues income. Correlates of robust dues income: institutional (as contrasted with individual) membership structures, affiliation with a network.

Among the other sources of income examined:

• Over half of organizing nonprofits raised income from individuals in 2002; of organizations that did raise funds from individuals, they supplied 11.6% of revenue.
• One third of organizing groups sought some kind of earned income in 2002; for those who did, it comprised 15.1% of revenues.
• Corporate giving to organizing was extremely modest, accounting for but 3.2% of revenue of the "average" organization in our sample.
• Few sample organizations host events, making events a relatively insignificant income source overall. Of the 217 organizations providing detailed income data, only 37 raised income from events, ranging from $150 to $52,000.
• Few sample organizations seek government grants (43 of 217), but, for those who do, government is a significant source of revenue, comprising a significant 28.0% of the revenue bases of those who won government grants.
• Workplace giving is not a significant source of support for organizing.

Our analysis of these data finds that:

1. The revenue budgets of organizing organizations are so modest that it appears that community organizing organizations on the whole are not keeping up with increases in the cost of doing business, let alone growing.
2. We find grants a significant - and an apparently increasing -- source of organizing income, but not the very great over-reliance found or suggested by recent research.
3. Organizing organizations raise a significant share of their funds - 29% -- internally.
4. Organizations that budget for fundraising staff had larger overall budgets, with the difference largely in foundation grants.
5. Organizations neither became more nor less reliant on grants income as they grew and aged.
6. Organizing is doing a great job of securing foundation support but has significant opportunities and challenges to improve its individual donations and planned giving (bequests, charitable annuities, etc.) programs.

Section Two: How Organizing Raises Funds, by Jane Beckett

This section summarizes and analyses interviews with 34 organizers nominated by their peers to be especially effective as fundraisers and organizers, supplemented by interviews with 24 additional organizers plus a number of organizing observers. Ms. Beckett draws on her own organizing experiences as staff, leader, and member in framing her analysis.

Organizers' Experiences and Perspectives on the Different Organizing Revenue Streams

Foundation grants

Virtually all of those we interviewed agreed that foundation funding lacks the autonomy and the reliability that internal fundraising provides. Yet most of the organizers we interviewed perceive foundation grants as money that can be gotten in a short time, in large amounts, and that can attract other foundation funding. One network with a particularly effective foundation strategy is the Northwest Federation of Community Organizations, in which its affiliates have decided - with success -- to pool their knowledge, practices, and even their relationships with foundations.

Corporate income

Corporate income particularly "works" for organizing when the asking is done by leaders and when the transaction is framed as an investment rather than as charity. One particularly effective strategy is that of gaining the support of members of the financial services industry, framing that support in terms of the long term interests of both the investor and the community organization.

Government grants and contracts

While many community organizing groups approach government funding warily, if at all, some are finding ways that they believe make government funding work to build their organizing. One "promising practice" is engaging the organization in providing a public service, for a fee provided for by government that a) builds the organization and b) generates revenue for the organization. Our full report notes the government funded organizing work of Logan Square Neighborhood Association (LSNA), Texas Industrial Areas Foundation (IAF), and Metropolitan Organizing Strategy for Enabling Strength (MOSES.)

Dues

Dues, both individual and institutional, are in theory the best long-term basis for financial stability for community organizing groups, and they represent the highest possible degree of ownership by the members of the organization. Creative ideas in dues collection: generating healthy competition among institutional members (MOSES and Kansas City Congregational Community Organization), involving Board members in new membership recruitment and retention (Iowa Citizens for Community Improvement), collecting and renewing membership dues electronically (Association of Community Organizations for Reform Now, or ACORN).

Events

Long a staple of community organizations' repertoire of fundraising techniques, special events raise money, engage members, and build visibility. The downside: they are labor intensive. Reliable formats include: annual dinners that raise funds from the community, bringing members together and showcasing the organization to non-members; festivals that attract fees and donations from an entire metro area, such as Pilsen Neighbors' Fiesta Del Sol (Chicago) and Kansas City Congregational Community Organization's Soul of the City Jazz Concert.

Individual and local business donors

Fundraising for income from donations was most frequently mentioned as promising in terms of growth potential, by a wide margin. For good reason: this is "where the money is" in the charitable giving universe. The most important principle in increasing individual giving is to build relationships - in this case, with prospective donors, involving Board members and other leaders in the process. Another critically important practice: develop and nurture a "culture of asking" throughout the organization.

Earned income

Some examples: providing government procured services that work to recruit new members and leaders, such as ACORN enrolling families in KidCare; providing fee-based services to members, such as Pineros y Campesinos Unidos del Noroeste making available low cost legal services to members; or selling training and outreach expertise.

Other income sources

These sources of income were seldom pursued by interviewees, but were never-the-less seen as sources with unrealized potential to support organizing: on line giving; workplace fundraising, particularly alternatives to the United Way; and planned giving programs. These sources of income were also seldom pursued, but not seen to have much potential to support organizing: capital campaigns; endowments; wealthy individuals who work through investment advisors; cause-related marketing or social ventures; linked development agreements; class action litigation; canvassing; and direct mail involving large rented or purchased databases.

Strengthening Organizing Fundraising Capacity

One of the most common themes of this study is that the organizing field pays far more attention to "organized people" than to "organized money." But we also learned that this state of affairs is changing: we found a high degree of interest in and commitment to integrating organizing and fundraising so that they strengthen each other instead of competing with each other.

Organizers and organizing observers perceive the following to be the major barriers to increased fundraising effectiveness: attitudinal and expectations barriers - the mindset that fundraising is an unpleasant diversion, not part of organizing or organization building; resource constraints, particularly demands on the time of the Director; and technical constraints, particularly fundraising skills and technology. Approaches that effectively transcend these barriers:

1. Recognizing that fundraising is organizing, create high expectations and high accountability for building diverse revenue bases, particularly from internal sources

• Successful organizer-fundraisers build fundraising expectations into the organization from its founding. They use fund development as a "place of leadership development and growth."
• They connect organizing and fundraising goals, involving leaders in membership recruitment and renewal, donor visits, events. They say: "fundraising is organizing."
• Some major networks have created clear incentives, expectations, and supports for organizers to raise internal funds.

2. Commit Time: Make time for fundraising and take a long-term perspective on building a diverse revenue base

• Successful organizer-fundraisers develop and use multi-year plans.
• Several networks set guidelines for their affiliates' staff and leader time devoted to fundraising.

3. Add Staff Skills

• One network, PICO National Network, encourages affiliates to add a "Fund Developer" to their staffs.
• Other promising practices: designating someone on staff who is the technology manager, building the skills and protecting the time of existing staff, increasing fundraising budgets.

4. Involve leadership

• "Leaders pledge first." Successful organizer-fundraisers make sure that the leadership of the organization sets the standard of financial commitment to the organization.
• Organizers and funders alike emphasized the importance of involving leaders in planning for and conducting meetings with individual, corporate, and foundation funders and donors.

5. Use modern technology to recruit, track, and follow up with members and donors

• We found (and describe) many examples of: investment in websites to raise the organization's profile; network-supported relational databases to improve contact with and track members and donors; dues and donations collection by electronic funds transfer; resources specifically created to help social justice organizations use technology effectively.

6. Intensify and re-think training

• We catalogue and describe the varied training opportunities (both network-based and independent) that are available to the field.
• Major suggestions of respondents to increase fundraising training effectiveness:
  • Provide extended training - not isolated workshops - that include several people in the organization, provide plentiful opportunities for peer learning, and enable participants to convene repeatedly and receive follow-up support.
  • The best training does not initially focus on specific techniques; it rather encourages the organization to integrate fundraising into its organizing, tying fundraising to organizing expectations and even agitation.

7. Don't forget about external sources of revenue: pursue foundation and government grants effectively, recognizing their importance in supplementing internally raised funds and in building organizing effectiveness.

• Effective organizer-fundraisers see grantseeking as an opportunity to build relationships of benefit to the organization, sharpen their communications skills, and involve leaders.

Section Three: Grantmaking for Organizing, by Jean Rudd

A Picture of Grantmaker Support from a National Database

Information provided by 158 CCHD grantee organizations on grants received for the years FY 2000-FY 2002 produced a database of 601 funders who granted, collectively, $53,497,139 to the organizations during that period. The largest grantmaker by far was the CCHD, investing $8.49M; the Charles Stewart Mott Foundation, Ford Foundation, Public Welfare Foundation, James Irvine Foundation, and the Veatch Program of the Unitarian Universalist Congregation at Shelter Rock provided over $1M in grants to reporting organizations.

Our database suggests that significant new investors have been drawn into organizing via increased persuasion and/or awareness within the grantmaking field that organizing is an effective strategy to achieve their goals. The database also suggests the growing importance of intermediaries in funding organizing. Nevertheless, the overall foundation and institutional grantmaker investment in community organizing remains quite small, reinforcing our conclusion that fears of over-reliance on foundation grants should be a secondary concern to that of the overall modest investment in community organizing.

Roles grants play in organizing's overall revenue mix

Why grantmakers invest in organizing

Grantmakers may fund organizing because they value organizing intrinsically, or because they find organizing an effective means to an end in which they have interest. The full report lists several "cases" for funding organizing, such as building democracy and achieving systemic improvements in the quality of community life.

How grantmakers invest in organizing: what their funding underwrites

Foundations provide grant support for organizing in one or more of three different ways:

• Core operational support.
• Targeted (or restricted) support for special projects, for work on specific issues or campaigns, or for expansion. We note the issues that are currently of interest to foundations.
• "Capacity building," support to build community organizing groups' abilities to grow and thrive as nonprofit organizations.

Locating the appropriate role for foundations to play in supporting organizing: the seeming paradox of increasing grant support for organizing without reducing incentives for local support.

Universally, advocates of community organizing would like to see increased support for the field of organizing, including from foundations and other institutional grantmakers. But how should grantmakers direct funding to community organizing in ways that do not foster over-reliance of organizations on foundation grants? Our study respondents strike no consensus on the "appropriate" role of foundations - how funding is directed -- nor the desirable proportion of funding they should provide. But there is concern about dependence on foundation donors, which Sue Chinn, formerly Executive Director of the Discount Foundation and now Chief of Staff and Associate Director of the Center for Community Change, sums up:

Groups are overly-dependent on outside sources of funding and have a long way to go to develop an individual membership base. They won't grow in influence until they grow in membership. If you are going to prioritize fundraising, that would be it . . . There's a whole lot we all should be doing to develop alternative sources of funding.

Funding that builds organizing: effective funder practices.

Organizers and organizing observers we talked with appreciate the funds that grantmakers provide, the expertise and support of program officers, and the opportunities grantseeking provides for leadership involvement. Major criticisms include restricted grants programs, limited understanding and/or valuing of organizing, and frequently shifting funding priorities.

The overall recommendation: "let organizing be organizing." Beyond this general recommendation, our respondents did not fully agree how funders can best support organizing: we hope this report inspires much more dialogue about this topic. Respondents' recommendations:

1. Increase general operating support and make multi-year commitments, thereby decreasing the potential for foundations to control or alter the organization's agenda.
2. Combine general, core support with funds to increase internal revenue sources through matching/challenge grants and/or funds to underwrite acquiring new skills.
3. Or limit foundation grants to special purposes, initiatives, or expansion, thereby encouraging more diverse revenue sources.
4. Make sure capacity building grants support effective adult learning processes - peer learning, reflection in action - rather the "one shot" workshops and forums.

Promising strategies toward increasing funder investments and effectiveness in organizing

This study uncovered wide commentary and anecdotal evidence suggesting that more foundations are supporting community organizing and that those funders are diverse. Strategies that have already helped or hold promise in helping increase funder investment and effectiveness in organizing:

1. Funder collaboratives

Funder collaboratives are not new but their support of organizing seems to be growing. Some funder collaboratives of organizing seek to draw attention to the promise of organizing itself, some to build skills and effectiveness of organizing, and some, to advance a particular topic, issue area or constituency group. According to Anne Hallett, formerly Executive Director of Wieboldt Foundation and recently examining funder collaboratives in the school organizing field, funder collaboratives can: draw new money into a particular field, increase capacity and impact in a field, and build funder knowledge and support. The full report lists a number of funder collaboratives supporting organizing today.

2. Peer awareness building

Many interviewees stressed that peer relationships (between program officers from different foundations and between the different levels of leadership within a foundation) are key in spreading openness to funding community organizing. Willingness is not spread by reading arguments about community organizing, but by being taken to see it in action, they said. We provide as a case example the story of how the Woods Fund of Chicago became a focused funder of community organizing.

Several people commented on the role of the national foundation "affinity groups" of like-minded funders, in promoting awareness of organizing as an effective funding strategy and opportunity. National Network of Grantmakers, Grantmakers Concerned with Immigrants and Refugees, Environmental Grantmakers, Funders Network for Smart Growth and particularly Neighborhood Funders Group (or NFG, the group that published and distributed the "Community Organizing Toolbox") were those most frequently cited.

3. Supporting organizing through intermediaries

The CCHD database of grantmakers finds two intermediaries among the top grantmakers to organizing. The Ford Foundation's Community Organizing Initiative is one example of this strategy: the Initiative found or created local intermediaries responsible for raising additional funds for the initiative locally, for addressing capacity building needs articulated by organizing groups, and for re-granting dollars to local organizations. The Charles Stewart Mott foundation pioneered the intermediary strategy in 1979 by designating seven already-existing organizing support organizations as Intermediary Support Organizations (ISO). Still in existence, the ISO program provides funding both for small grants to emerging organizations being mentored by the Intermediaries, as well as for additional technical assistance and capacity building.

4. Looking to community foundations for increased support

Among our study participants, opinion is divided on how much potential lies in community foundations for expanded support of organizing. A prevailing view is that community foundations should be logical supporters of organizing, given their missions and their presumed responsibilities to the entire community. And yet, community foundations, according to many of our respondents, are "hard nuts to crack," focused more and more on satisfying major donors and prospective donors who are unaware of community organizing and more comfortable with traditional charitable endeavors.

5. Accessing the "new wealth," individual donors and less traditional structures for giving

How can community organizing tap into the enormous new wealth in our nation? Several of our respondents saw promise in new philanthropic structures being created to attract and pool new wealth. These include: "alternative" or community based funds such as Funding Exchange members that advise donors and raise funds from them; collectives of philanthropies under one roof, such as Common Counsel, that house and staff multiple family foundations; and for-profit and nonprofit "philanthropy advisors" that help donors, families and family foundations to develop philanthropic missions and programs, such as Rockefeller Philanthropy Advisors.

Generally, our study respondents think that community organizing groups should approach financial and legal advisors through philanthropic intermediaries rather than directly, although philanthropy advisor Betsy Brill, Founder and President of Strategic Philanthropy, encouraged organizing to find connections to wealthy individuals via their Boards, members, etc. A few study participants are thinking about how to make energized donors in the 2004 election aware of community organizing as a foundation for an engaged citizenry. It is worth noting, however, that, within the realm of alternative and progressive funders and their advisors, the evidence suggests that "true" community organizing does not have a high profile: community organizing has to make a well documented, convincing case for its contributions and its relevance among these donors and potential donors.

How Organizing Can Help Funders Understand and Support Organizing: Toward Improved Communications on Organizing Purposes and Results

"Does organizing use effective communications to describe its work to foundations and corporations? Would different language or different proposals describing mission and outcomes change chances of support?" This research question in our study drew some of the strongest consensus among the funders, advisors, and observers of organizing that we interviewed. Put most simply by Robert M. Johnson, consultant and former Executive Director of Wieboldt Foundation: "Sure, we need to use different language. It's not 'selling out'. You have to appeal to the people you're communicating with."

Funders and other friends of organizing suggest the following to improve chances of communicating more effectively with foundation and corporate funders:

1. Learn the funders' agendas and explore how to describe your work in ways that meet their needs.
2. Leave the insider language and jargon behind. Choose language carefully so that funders beyond the "true believers" understand what your organizing is working toward, how it has been and plans to be effective on specific outcomes and policy issues.
3. Incorporate values, leaders' stories, intended impacts, and strategies to reach them.
4. Develop a real communications plan and skills to advance both the organizing and the fundraising agendas.

Longer Term Challenges to Increase Community Organizing Revenue

We conclude this report with a look at longer term and bigger picture issues raised by our respondents and/or suggested by the literature as described in the Annotated Bibliography.

Issues, opportunities, and challenges facing local organizing groups

For organizing whose mission is to increase democratic participation, opportunity, and power at the local level, our respondents have emphasized increased internal fundraising success by honing traditional methods - dues, donations, events, and local business drives. Their "promising practices" include, most importantly, creating a culture for fundraising in the organization that integrates organizing money with organizing people, focusing staff time and attention to fundraising, developing a longer term plan for organizing and for fundraising, increasing leadership involvement in fundraising, making technology a tool in fundraising, improving communications of their organization's impact, and so forth.

Several people we talked with saw new opportunities to strengthen local organizing fundraising: the shift in policy responsibility from federal to local or state levels; the very localized funding interests of some "new wealth" donors. William Schambra, Director, Hudson Institute's Bradley Center on Philanthropy and Civic Renewal, sees important lessons in the growth of evangelical organizations, which have been particularly effective at both raising money and turning out voters.

Others saw challenges: increasing awareness that most seemingly local issues are rooted in broader policies requiring action from broard-based groups or coalitions, and the limitations small organizational size places on the development of diverse fundraising programs. These very challenges suggest great opportunity for intermediaries and organizing networks to create the economies of scale that would support more diverse revenue generation.

The revenue generation potential of broadening the reach and visibility of community organizing

Several experts we talked with believe that organizing must broaden its vision and scope of activity to achieve the kinds of improvements in local communities it seeks, and they also observe that such a broadened focus will open up new resources for organizing. Respondents such as Chuck Shuford, Greg Galluzzo and Deepak Bhargava see new revenue potential in statewide and national level alliances within organizing, between organizing and unions, and with progressive political groups to build organizing's power.

Building a culture within organizing that supports diverse revenue generation

Without exception, the organizers we interviewed who were nominated by their peers as effective revenue generators exemplify how to build a culture that is more supportive of fundraising: that these organizers are around and thriving hints that the larger cultural barriers to effective fundraising that have been endemic to the field may be eroding. We have described some promising practices in changing this culture, with a focus on strengthened expectations for fundraising, more and better training of organizers and leaders, conscientious use of technology, bringing in fundraising staff when overall revenues permit such specialization, and emerging efforts to expand organizing alliances and re-think strategies.

Toward more stable, more diverse funding bases for organizing

Perhaps, then, the key challenge is cyclical: community organizing groups need predictable, diverse revenue bases to attract and hold organizers committed for the long run, and they need organizers committed to the long run to build predictable, diverse revenue bases. All stakeholders in community organizing have critical opportunities to address this issue: foundations, in providing more core, long term support to enable and encourage talented organizers to build internal fundraising capacity; networks and intermediaries, in recruiting and training organizers and leaders who will be effective fundraisers; organizers and leaders, in transcending their natural fears and anxieties about building relationships with donors; and the entire field, in better communicating to emerging donor communities the importance of and the return on investments in community organizing.

Introduction

"Why should I spend a day building my individual donations program which might produce a few $50 or $500 donors when I could spend that day writing a $50,000 foundation proposal?"

"How can organizing tap into the energy and wealth of the '527's [2], which raised hundreds of millions of dollars for progressive candidates in the 2004 general election?"

"Are there any organizing groups that are building endowments, or even cash reserves?"

"How do we grow or even stabilize when we've topped out our dues income and have to do more and more to keep the level of foundation support we have?"

"Is it unethical or counterproductive for us to accept grants or donations from government/corporations/wealthy individuals/foundations endowed by 'robber barons'?"

This report began with questions like these and led us, through data analysis and interviews, to some findings that we hope will be useful in strengthening organizing's funding base and fundraising practices. Among these findings:

• The budgets of community organizing groups are, on the whole, flat and not keeping up with inflation.
• Foundations are an evermore important source of organizing budgets, despite considerable fear in the field that such external funding can undermine organizing strength and autonomy.
• At the same time, there are dozens of examples of high performing organizer-fundraisers, whose work we describe; the single most important factor in their success is that they see fundraising as organizing.
• And also at the same time, more and more members of the foundation community are wrestling creatively with the question of how to increase foundation support of organizing without undermining local ownership, and are creating intermediaries and collaboratives and drawing more peers into the field.
• And yet, serious challenges remain, particularly with respect to appealing to individual of all incomes, to communicating excitement and results, and to building a culture that pays much more attention to fundraising.

Purpose of this report

The sole purpose of this report is to strengthen the revenue base of community organizing. The report does not question the importance, effectiveness, or impact of community organizing: we take as a starting point that organizing is indeed important, effective, and results-producing. Beyond this "bias," however, we wish to underline that we are not offering the research team's viewpoints and judgments: what we present is what we see from the data and heard from the field.

We have tried to make the report readable and useful for evermore-stretched organizers, as well as to provide some admittedly dense narrative for those who wish to pursue problems and opportunities of organizing funding and fundraising in more depth.

Research questions and methodology

1. How are community organizing groups presently funded? How, and to what extent, do sources such as government funds, earned income, social ventures, and the Internet diversify the usual mix of foundation grants, membership fees, and grassroots fundraising revenues?
2. What is organizing's assessment of each of its major revenue sources with respect to:
   • Strengths and weaknesses in building its organization for the long run?
   • Reliability? Flexibility? Growth potential?
   • Adherence to organizing principles and values?
   • Potential for ethical conflict with organizing issues?
   • Administrative efficiency?
   • Real and perceived strings?
3. To what extent could membership and dues income, grassroots fundraising, and other non-foundation revenue sources be better developed if organizers had stronger fundraising capacity?
   • How do organizers presently learn to raise revenue?
   • How do they keep up with emerging developments in nonprofit fundraising?
   • How helpful do they find intermediaries, professional networks, and special fundraising workshops, courses or institutes?
   • Whose job is fundraising? How would staffing strategies have to change to build fundraising capacity?
4. What is the role of foundation support in organizing? Has this role changed over recent time? Can organizing expand its foundation and corporate support through more effective fundraising and communications practices? How?
5. Are there any long-term trends that affect - negatively and/or positively -- organizing's ability to raise funds? What is organizing doing to overcome or take advantage of these trends? The data presented to answer these questions are based on the following methodology (a more detailed statement of methodology is found in Appendix II).
   • A review of the research and practice literature (Appendix II).
   • Financial information provided to National Catholic Campaign for Human Development (CCHD) by 240 community organizations, the universe of 2002 CCHD grantees who met our definition of "community organizing".
   • Interviews with 55 organizing "expert observers" nominated by their peers, with the sample built "snowball" ("who else should I talk with?") fashion. These experts include organizers, former organizers who are now staff of networks, funding bodies, or intermediaries; funders; researchers; technology experts; and fundraisers.
   • Interviews with 38 organizers nominated by their peers as effective fundraisers or nominated by our team based on Form 990 or CCHD data.
   • Two groups of organizers - one that served as our Advisory Committee and one that reflected on barriers and opportunities in fundraising as part of a capacity building process.

Our report is organized along the lines of our research questions and focuses on what these numbers and interviews tell us. In a few instances, we add our own analytic perspective, one informed by our collective 75+ years of doing, funding, or observing organizing, but we make clear when we insert that perspective.

Definitions of terms

Community organizing: We believe the following definition well captures what community organizing is about:

"Community organizing is the process of building an increasingly broadly based, democratic organization rooted in a low- to moderate-income community. Over time the goal is to build a large, well-disciplined organization with the membership, leadership, knowledge, vision, power, and capacity to strengthen their neighborhood's social and economic fabric and make increasingly significant gains on vital issues. This requires a continuing process of actively reaching out, involving larger numbers of people, surfacing leaders and giving them training, increasing responsibility and authority, and helping them move into effective action on the issues that most concern them. The ultimate goal of community organizing is to transform the conditions that currently restrict opportunities for people who are too often left behind." [3]

Key to this study is the idea that community organizing involves the creation and maintenance of formal organizations. We thus exclude from our definition organizing "projects" of organizations whose primary mission is something other than organizing, ad hoc campaigns, and highly informal groups. We include the variety of communities (place-based, issues or interest based, ethnic group based), structures, and organizing traditions (Alinsky-inspired, popular education, Asset Based Community Development (ABCD), Civil Rights and Welfare Rights movement-inspired, etc.) that embrace building formal organizations.

Community organization: An organization that does community organizing. Key definitional characteristics of a community organization:

• Is focused on social change and empowering people who, with a unified voice, can more effectively influence decisions affecting them.
• Is accountable to a low and moderate income membership, which actively chooses the issues to be addressed and participates in devising strategies to address them.
• Is led by people democratically elected by and from among this membership; leadership is usually supported by trained professional organizers and other staff.
• Achieves change by bringing the organization's numbers and expertise to bear to influence public policy or institutional or corporate behavior that affect the community.
• Builds power (defined as "the ability to act") by developing the knowledge and skills of its volunteer leaders; and by recruiting and educating a large base; then by using strategies to achieve change including education, , negotiation, collaboration, and confrontation. As in all aspects of public life, the willingness to be demanding is essential, even if it is rarely used.
• Uses skills such as strategic and policy research, developing proposals and policy recommendations to address community concerns, outreach and education, creating intra-community networks, forming partnerships and coalitions, and negotiating with other actors in public life, in order to have an impact on its community and/or on public policy.

Grassroots fundraising: Funds raised within an organization's community and/or membership. Dues, special events, canvassing and other direct appeals, ad books, local business campaigns are examples.

Internally raised funds: We expanded the traditional definition of grassroots fundraising to include interest income, program fees, and earned income from the sales of goods, services or assets. Examples would include leadership trainings, fees charged from workshops, the sales of training manuals or other publications. We recognize that many would consider such sources "grassroots income"; we use the term "internally raised funds" because so many organizations in our dataset list them as sources of income beyond grassroots income.

Section One: How Organizing is Funded, by Sandy O'Donnell, Ph.D.

Introduction

Most organizing networks, intermediaries, and experts teach that core organizing budgets should be raised within the community - through dues, events, direct appeals, ad books, and so forth. [4] The scant research that exists on organizing funding suggests, nevertheless, that, while many organizing groups continue successfully to raise money internally, the growth of organizing over the past three decades seems to have been fueled largely by external funding sources such as foundations, corporations, and, to a lesser extent, government. [5]

Before we describe how organizing evaluates the strengths and limitations of different funding streams, internal and external, we simply wish to describe what we know about how organizing is funded -- from the recent research and from recent data we have analyzed.

The available research on patterns of organizing funding

We briefly (see Bibliography for more detail) describe and summarize several studies of community organizing groups, done for different purposes, with different samples, and at different times. The studies are:

• Jerome Don Harris' case studies of 25 Chicago based community organizing groups through the 1970's, a rare longitudinal study (looking at how organizing groups grow or decline over time); [6]
• Carl Milofsky's and Frank Romo's panel study of a set of neighborhood organizations (some of which are community organizing and some of which are not) in 1978 and again in 1984; [7]
• John McCarthy and Jim Castelli's study of over 200 National Catholic Campaign for Human Development grantees in 1994, the best available quantitative research on funding patterns of organizing; [8]
• Mark Warren's and Richard Wood's 2001 study of over 100 faith based organizing groups nationwide; [9] and
• Kris Smock's very recent qualitative study of 10 community organizing groups from 5 different organizing traditions. [10]
• We present their findings as a table.

In summary, these studies as well as several other case studies we have reviewed [11] have found that:

• Organizing budgets are modest, often intentionally so, to assure that the organization relies as much as possible on volunteer leadership.
• Many organizing groups tend to be highly reliant on one source of funding or another, and that source typically is external.
• Funding diversity is correlated with organizational age and seems to promote organizational sustainability.
• Despite the strong reliance of so many organizing groups on one funding source, organizing groups are highly resilient, according to the two longitudinal studies, and organizers are quite effective in replacing lost funds with other sources. Even Harris, who observes a "Sugar Daddy" hypothesis of organizing fundraising, noted that few groups died when their major funder pulled out, but they did have to re-group. This finding speaks well to organizing's capacity to strengthen and diversify its fundraising base if that goal becomes a core focus of the work.
• There is a strong belief within the organizing community that internally raised funds are "better" in building ownership and organizing muscle, and, thus, when groups are funded externally, they are more vulnerable to goal displacement and organizational instability. But those few researchers who have examined the impact of funding patterns on organizations find overall funding levels and funding diversity to be more important in sustaining the organization and its level and kinds of activity than any particular pattern of internal or external funding. This question seriously warrants further, and more rigorous, study.

Two conclusions are worth quoting for their relevance to and the questions they pose for organizing fundraising today:

• Funding is a continuing problem for community organizations. Many have budgets of less than $150,000 a year, yet they must do battle with much better funded governments and businesses. Community organizations, in even the poorest neighborhoods, can raise significant amounts of grassroots income . But the idea that most of these groups can ever become financially self-sufficient appears to be a myth. Even the most financially self-sufficient groups we saw still raised 20 percent or more of their budget from outside sources. Grassroots fundraising is labor intensive. When groups can raise enough money on their own to keep their doors open, they still turn to grants and other funding sources to finance new and expanded programs. [12]
• Whatever it is that causes NBOs (neighborhood based organizations) to rely so heavily on single (funding) arenas does not seem rooted in structure. More likely, funding arenas embody certain institutionalized practices, norms, and sets of network connections that make it convenient for fund-raisers to continue relying on certain sources. It is expensive for small organizations to forge new contacts and learn new ways to write grant applications. Although organizations can shift their funding sources, this is easiest when they carry on diverse activities and gain support from many sources. Diversity is a benefit provided by size and age. But since NBOs are by nature fluid and loosely structured, there are few barriers preventing leaders at any stage of organizational development from seeking out a diversified base of support. Doing so is likely to increase chances of long term survival. [13]

Contemporary quantitative data: the national CCHD grantee database

Gaining good quantitative data about community organizing revenues

One of our keenest disappointments was discovering how fatally limited the IRS Form 990 [14] is for our purposes; it is the "gold standard" of information on nonprofit funding for many kinds of nonprofits and, increasingly, the single most important source of financial information on the nonprofit sector for prospective donors and for researchers. The 990 is quite useful for examining the many nonprofits that derive most of their income from government grants and program fees, supplementing these with individual donor appeals and foundation and corporate grants.

But for community organizing, the Form 990 is less useful because it combines most of the major sources of funding for organizing on one line - Public Support - and thus critically limits our ability to understand funding patterns from this document. Public Support includes foundation grants, corporate grants and donations, individual gifts, and membership dues that are not tied to the receipt of goods or services. From the Form 990, we can only get a picture of how much of an organizing group's budget comes from this "mega" revenue source, as well as from dues for which goods and services are received, interest income, program fees, special events, government grants and contracts, and other earned income. Because these sources of income beyond public support are so modest, we really learn very little from the Form 990.

In exploring the use of the Form 990 for community organizing, we also found significant missing information (the number of staff, for instance) and erroneous information (a group highly effective in internal fundraising reported all of its income as government grants), further limiting our confidence in using the Form 990. We ended up using the Form 990 episodically, to verify some data on some organizations. But we recommend that organizing groups pay focused attention to the accuracy and completeness of the Form 990s, as, increasingly, this information - posted on www.Guidestar.org -- is a portal to the organization for new donors.

To gain a quantitative picture of organizing revenues, then, we had to change strategies. We turned to the grantee database of the national Catholic Campaign for Human Development, recognizing that CCHD is the largest grantmaker in community organizing nationwide, well known to any community organization that raises funds effectively, and highly effective at screening out applicants that do not do "real" organizing. Because CCHD makes grants to projects, not organizations, we eliminated from our analysis organizing "projects" that were not part of organizing "organizations". Through this process, we analyzed the fundraising data of 240 community organizations nationwide.

We fully recognize that this sample is not perfect; it is simply the best available source available on how community organizing is funded. Three cautions about the data.

• First, the organizations analyzed cannot be assumed to represent all organizing nonprofits nationwide: the organizations in this database have applied for and qualified for a CCHD grant, and, thus, are different from community organizing that does not seek grants and does not qualify for CCHD funding (which requires a board predominantly of low income people and adherence to Roman Catholic values, among others). This is not a universe of organizing nonprofits nationwide.
• Second, the budget figures we present are those reported by the staff person completing the application. Sometimes, these are actual, audited figures; sometimes, it is unclear how firm the figures are.
• Third, note that sample sizes change for different analyses - not all of the organizations provided data on all of the variables examined.

The sample

The total sample of 240 organizations was comprised almost equally of groups in the Northeast, Mid Atlantic, South, Midwest, and West (about 50 from each), smaller numbers from the Southwest (25) and Plains/Mountain states (15), which also are less populated than the other areas. Some salient characteristics:

Because this study is especially focused on sharing learnings with the broader organizing field on how to sustain community organizing, we lifted out those that had stood the test of time in raising budgets and will present some findings on this group specifically.

Findings

While we collected three year data as provided by the grantees, we present 2002 data primarily, because fewer respondents provided previous year data, creating significant amounts of missing information. We do check the available previous year data to assure that 2002 data are not significantly idiosyncratic.

Finding #1: Organizing nonprofits do raise funds from diverse sources.

Community organizing groups indeed raise funds from multiple sources, even if groups tend to rely on a small number (for instance, dues and grants) of revenue generation tools:

We next begin to provide some data on the "average" grantee. A brief reminder to readers that the mean, or arithmetic average, is affected by extremes (for instance, a few organizations that are very large) while the median (the 50th percentile, or half of organizations have higher and half, lower) is not. The median, however, is influenced by small sample sizes, and the mean provides more opportunities for analysis. In presenting the share of total revenue of a particular fundraising source, we use the mean.

We present pie charts for 2002 and for 2001 to illustrate the various parts that comprise the revenue budget whole. Later, we will examine "external" vs. "internal" revenue shares in more detail. But, more generally, what the pie charts show us is that, while grants comprise well over half of organizing revenues, organizing nonprofits do raise funds from a variety of sources:

Finding #2: Overall revenue is quite modest

As others have found, longer lived organizations seem able to raise larger revenue budgets, with organizations more than 4 years old raising over twice the budget level of younger organizations:

But further examination of the data finds that age of organization is only very modestly correlated with total income (r = .123, not statistically significant).

There is significant regional variation in revenue budget size, with Northeast and Southwest organizations having smaller budgets:

Not surprisingly, the budgets of local organizing groups are more modest than those with larger reaches:

Multi issues organizations have slightly higher revenue budgets than single issue organizations:

And coalitions, not surprisingly, have larger budgets than either individual or institutional membership groups:

As to network affiliation, the type of "average" used strongly affects the findings. Organizing nonprofits nonaffiliated with networks have higher mean revenue budgets, but lower median budgets. The mean is elevated by 4 non-network organizations with over $1M in revenues (and one with nearly $1M); the median is depressed by 23 non-network affiliated organizations that are very small, with budgets under $50,000.

Budget sizes varied somewhat among the major networks' affiliates who are CCHD grantees, with PICO affiliates who are CCHD grantees in the sample having higher budgets than others, but small sample sizes may explain some of the differences.

Finding #3: Grants are the largest single source of organizing revenue.

The data we analyze confirm the widespread impression that grants from external sources - church grantmaking programs, foundations, and corporations - are the single most significant source of organizing revenue. We first present data on the percentages of total budgets supported by grants, and we then present information from organizations that supplied detailed data on their grants to CCHD on the sources of those grants.

In presenting the percentages, we use the mean percentage.

Unlike overall budgets, younger organizations did not have relatively less success in raising grant income than older organizations did, and, indeed, seem slightly more grants reliant than older groups. Nevertheless, on investigating further, there was no correlation (r = .039) between age of organization and grants reliance.

While grants were significant sources of income in all regions, approaching or exceeding 60% in all regions but the Southwest, organizations in the West and in the South had particular success in raising grants income:

Statewide groups are relatively less reliant on foundation grants than other groups (explained in part by their use of government funds, which comprise 14.1% of their budgets):

Single issues and multi issues groups relied on grants income equally:

Chapters and coalitions seem to rely on grants to a greater extent than do either individual or institutional membership community organizations (but note the small sample sizes of the coalitions and chapters):

Organizing nonprofits that are affiliated with networks are slightly more reliant on grants than non-affiliated groups:

Our data suggest differences among the major organizational networks in grants reliance of affiliates, with, at the extremes, ACORN affiliates who are CCHD grantees raising less than half their revenue from grants and PICO affiliates who are CCHD grantees raising more than 3/4 of their income from grants:

We turn now to a brief description of who the grantmakers are who provide this grant support for community organizing. Data on grantmakers come from 158 grantees that provided information to CCHD on specific grants and grantmakers. Please remember that these data are not in any respect the universe of funders for community organizing: they are, rather, a glimpse of who funds organizing groups that are CCHD grantees and that provided detailed information about their funders.

• The 158 groups listed 601 grantmakers investing $53,497,139 in organizing between 2000 and 2002. We will discuss this database of grantmakers more fully later in this report. We present here the Top Ten grantmakers by
  • the amount of their investment and
  • the numbers of organizations they support.

Our tabulation of these data suggest that, for CCHD grantees, the CCHD remains, by far, the most significant grantmaker supporting community organizing in the nation. CCHD at the local level invests more than twice as much in organizing as does the top nonsectarian funder, the Mott Foundation, and CCHD national very nearly matches the Mott Foundation's investment:

CCHD also invests in far more organizations than any other funder. Funders that appear on this list but not the former one, of course, tend to make smaller grants to larger numbers of organizations. Note the larger number of sectarian based funders on this list:

Finding #4: There is great variation within the field in the relative importance of membership dues to the overall revenue budget

Our data suggest that organizations with institutional memberships are more likely to collect dues from their members and to raise larger proportions of their income than are organizations with individual members. The last column suggests, of course, that dues income is a more significant revenue source for those who collect dues than for those who do not. One additional caution: organizations with individual members report more income from individuals than do organizations with institutional members. It is possible that individual member organizations do not clarify the difference between dues and individual donations, but we cannot interpret this distinction from the data.

Organizations affiliated with networks are more likely to seek dues income and to raise revenue from dues:

Across the major networks, there is quite a bit of variation in how significant dues are in raising the organization's budget:

Finding #5: Over half of organizing groups raised income from individuals in 2002; for those who did, individual donations comprised 11.6% of revenue.

123 of 211 organizations who supplied detailed revenue data raised funds from individuals, including canvassing and telemarketing as well as other direct appeals. Amounts ranged from $20 to $180,955, one of 4 donations exceeding $100,000. Organizations with individual members raised slightly more from individuals than did organizations with institutional members; we cannot tell from these data the extent to which a) institutional member groups may feel restricted by their members from raising funds from individuals, nor b) individual member groups blur dues collection and fundraising solicitations from individuals. Both issues bear further examination. But the greater challenge is increasing revenue for organizing from individuals across the board.

Finding #6: One third of organizing nonprofits sought some kind of earned income in 2002; for those who did, it comprised 15.1% of revenues.

77 of 217 reporting organizations reported some earned income, ranging from $55 to $250,000. Four organizations raised over half of their budgets from earned income. Earned income sources included:

• Contracts to provide services, such as community outreach and education;
• Fees for services such as leadership training and data collection; and
• Sales of goods and services such as manuals, branded items, and, of course, bake sales and raffles.

Finding #7: Corporate (including unions and ad books) giving to organizing was extremely modest, accounting for but 3.2% of revenues of the "average" organization in our sample, raising questions about how corporate giving is classified.

We classified large corporate foundation grants as grants. Otherwise, we classified donations from corporations, including unions, separately. Nevertheless, the sums seem unduly modest, suggesting that some organizations consider local businesses "members" and classify their donations as dues. For instance, 11 of 12 Direct Action and Research Training Center, Inc. (DART) affiliates reported no income from corporations, even though the corporate drive is the centerpiece of DART's fundraising strategy. Of the 217 organizations providing information about corporate income, 62 organizations reported revenue from corporations and unions, ranging from $350 to $115,000. For those who do raise corporate income and report it separately, it comprised 11.3% of their budgets overall.

Finding #8: Few organizing nonprofits host events, making events a relatively insignificant income source overall.

Of the 217 organizations providing detailed income data, only 37 raised income from events, ranging from $150 to $52,000. Events produced 2.9% of the "average" organizing nonprofit's budget in 2002. Of organizations who did host events, however, events were more significant, producing 11.6% of total revenue.

Finding #9: Few organizing nonprofits seek government grants, but, for those who do, government is a significant source of revenue.

In 2002, only 43 of 217 reporting organizations received government grants. (Note: We subsequently discovered in the interview process that more organizations accepted government revenue for their organizations but consider it a fee for service, such as for KidCare enrollment, classifying this revenue as 'earned income' rather than 'government grants'. We also note that some organizing - Texas IAF for instance - has created new 501c3 structures to accept government funds apart from the local organizing groups that would apply to CCHD for grant funds. Thus, our database likely under represents the extent of government grant support for organizing.) While government revenue was thus only 5.2% of the "average" organization's revenue, it comprised a significant 28.0% of the revenue bases of those who won government grants. Most government grantseeking occurred among non-networked organizations (28 of the 43); government grants comprised 11.3 % of revenue among non-networked organizations and ranged from $303 to $1.6M. Among the major networks, only National Training and Information Center (NTIC) affiliate CCHD grantees sought government grants to any extent: 7 of 10 in this network did. The largest government grant sources for 39 organizing groups reporting on them were:

• The Community Development Block Grant, which provided $885,000 to 8 groups during the FY 2000-2002 period;
• The 21st Century Learning Centers program, which provided $646,501 to one group during the period; and
• The Environmental Protection Agency, which provided $589,710 to 4 groups.

Other federal agencies included the US Department of Agriculture, the Bureau of Justice Assistance, HUD, the Community Service Block Grant, and, of course, the Corporation for Public Service. State and local level disabilities councils and agencies, HIV-AIDS outreach programs, and human services agencies were predominant government funders at these levels. Several grants from cities did not specify the source.

Finding #10: Workplace giving is not a significant source of support for organizing.

Only 12 of the 217 reported any workplace giving income at all, and only 4 reported workplace giving of at least $10,000. One organization raised $53,000 from workplace giving. Given the size and importance of United Ways in providing unrestricted income for nonprofits nationwide, and given the United Way's increasing emphasis on investing in community building results, these data suggest a tremendous opportunity - but perhaps also an intractable barrier - in gaining entry for organizing into the United Way. These data also suggest the modest grantmaking capacities of "alternative" workplace giving vehicles such as Black United Funds and Community Shares.

Analysis

1. The revenue budgets of organizing nonprofits are extremely modest and, from the available evidence, are not keeping up with increases in the cost of doing business, let alone growing. McCarthy and Castelli found - ten years ago -- that the average budget for a CCHD funded organization was $213, 050 (mean); we found in our smaller sample of CCHD organizing nonprofit grantees that the average budget in 2002 was $207,686 (mean). While recognizing that McCarthy and Castelli were looking at a larger group of organizations 10 years ago than we are today, our finding that community organizing nonprofits raise about the same levels of revenue that CCHD grantees did 10 years ago, not adjusted for increases in the cost of doing business, is sobering. If we adjusted for increases in the cost of doing business, revenue for the "average" community organization would have actually declined over the past 10 years. Our data thus suggest that there may be too much hand wringing in the field about (the perception of) foundation reliance and too little about the overall modest investment in organizing.
   
   
2. We find grants a significant -- and an apparently increasing -- source of organizing income, but not the very great over reliance found or suggested by recent research. While we caution readers that we cannot firmly establish trends by comparing our data to the McCarthy and Castelli data of CCHD grantees 10 years ago (he was examining all CCHD grantees while we have selected out those that are organizing nonprofits, and, in addition, reporting requirements to the CCHD have changed over the decade), the organizations in our sample did indeed raise a higher percentage of their revenue budgets from grants than did CCHD grantees 10 years ago. In our sample, 62.8% of budgets were raised from private grants and 5.2% from government grants; in McCarthy and Castelli's sample, 56% of revenue budgets were raised from private and public grants combined. We question the extent to which this constitutes "over reliance," though, as organizations in our sample had diverse grants sources (nearly 9 over a three year period) and did indeed raise funds from multiple sources. Thus, Harris' "Sugar Daddy" hypothesis does not seem to be supported from our data.
   
   
3. Organizations raise a significant share of funds -- 29% -- internally.
   Our definition of "internal income" encompasses dues, events, individuals, corporate donations, earned income, and other grassroots income. While this 29% does not meet the "standard" of 2/3 that some organizing networks advocate, it is very near the 1/3 standard that others seek. This figure is also nearly double the "grassroots income" level reported by McCarthy and Castelli 10 years ago (15% of total revenue for CCHD grantees was grassroots income), although we caution readers that he may have been using a more conservative definition of "grassroots income" than we use of "internal income".

   
   
   

4. Organizations that budget for fundraising staff had larger overall budgets, with the difference largely in foundation grants. In other words, fundraising staff enable organizations to increase their grantseeking activity while maintaining their internal income generating activities. (Note: we discovered in the interview process that this did not mean that fundraising staff focused on grantseeking, but, rather, that they often freed other staff to spend more time on grantseeking while the fundraiser staff picked up the staff burden of internal fundraising.)

   Does budget include a staff fundraiser? sampled organizing nonprofits, 2002
   	Total mean 2002 revenue	Total grants	Total internal
   No (n=174)	$167,666	$110,760	$44,818
   Yes (n=28)	$305,786	$232,595	$53,029

    

5. Organizations that had proven sustainability -- were at least 4 years old and had budgets of at least $50,000 -- raised more revenue than the entire group, but in the same proportions. We defined an organization as "proven sustainable" if it was at least four years old -- and had, thus, survived the first three year funding cycle - and if it had a budget of at least $50,000, enabling it to retain at least one full time staff person to build the organization.

   Sampled organizing nonprofits, 2002
   	Total mean 2002 revenue	Total grants	Total internal
   All (n=217)	$205,623	63.0%	29.2%
   Sustainable (n= 117)	$286,286	64.5%	25.6%

   
   
   Correlation coefficients found no relationship between age of organization and percent of budget raised from grants, age of organization and percent of budget raised internally, and size of organization and percent raised from grants. There was a modest and statistically significant negative correlation (r = -.203) between size of organization and percent raised internally. In other words, the conventional wisdom that it gets easier/harder to raise grants income or internal income as an organization matures is not confirmed by our data.
   
   
6. The contrast between organizing revenue sources and charitable giving overall in the US is sharp, suggesting that organizing is doing a great job of securing foundation support but has significant opportunities and challenges to improve its individual donations and planned giving (bequests, charitable annuities, etc.) programs. The organizing nonprofits in our sample raised nearly 63% of their budgets from foundations; nationwide, only 10.9% of charitable giving in 2003 came from foundations. On the other hand, nationwide, 74.5% of charitable giving came from individuals and an additional 9.0% came from bequests, (a continually rising share of giving), far higher percentages than all but a handful of organizations in our database achieved, even when we count membership and events income as coming from individuals:

   
   
   
   
   

Conclusion

Our analysis of contemporary data on funding patterns in organizing - through the lens of national CCHD grantees -- confirms recent studies' findings that organizing nonprofits operate on very modest resources, predominantly via grants from foundations and church related philanthropies supplemented by membership dues and other fundraising activities of the organization. To an important extent, the modest size of organizing budgets may be "good" and intentional, a strategy to assure that most of the work is carried out by a volunteer membership. Surely continued reflection and dialogue in the field is warranted on the question of what an "ideal" organizing budget is to support continuous growth in power and effectiveness. But since this research project arose from articulated concerns of organizers that they were not raising such ideal budgets, we assume that the modest size of many organizing nonprofit budgets is too modest to achieve the organizations' intended impact. We turn now to voices from the field - to organizers, funders of organizing, and other organizing experts who describe revenue generation issues, concerns, and, most of all, promising practices toward achieving the kind of revenue support organizing needs to achieve the impact it seeks.

Section Two: Improving How Organizing Raises Funds
by Jane Beckett

Revenue Sources: Practices and Perceptions

We sought to learn from interviews with organizers and informed organizing observers what creative organizations are doing to raise diverse funds as well as their perspectives about the strengths and weaknesses of different revenue streams to support organizing goals.

These practices and perspectives derive from diverse organizing styles and traditions, and we alert readers that what works for one organizing style and tradition may not be as appropriate or feasible for another. Differences in size, age, demographics of membership, issue focus, political orientation, region, rural vs. urban, and more all have a distinct impact on an organization's judgment as to what a strong revenue base would look like for it.

In addition, there is a great deal of variation between the community organizing networks that link about half of the CCHD grantees to each other. The networks vary widely in terms of how close, how demanding, and how supportive the relationship between network and affiliates is. They have different purposes, different histories, and different structures. It would not make sense to expect ACORN affiliates, which are in fact all chapters of a single 501©3 organization based in Louisiana, to have fundraising practices that mirrored those of NTIC affiliates, which are free-standing organizations that share an interest in several critical issues but differ widely in terms of structure, history, and philosophy. Inter Valley Project affiliates all share the same "story" - that of the flight of factory jobs from smaller New England cities - whereas IAF affiliates, while sharing a methodology, are widely scattered and address very different issues from each other. Organizations that relate to and receive training from the Center for Third World Organizing, share some elements of a political analysis, but do not necessarily consider themselves to be a network. And so on.

Because of these different histories, perspectives, and environments, different organizations and schools of organizing will certainly have different opinions as to the relative advantages and disadvantages that come with the various types of income that we explore below - for practical as well as values-driven reasons.

Foundation funding

According to organizing orthodoxy, community organizing should never be reliant on foundation funding. Organizing should raise its core support internally and look to foundations for seed and special project support. In his cogent analysis of the strengths and weakness of various nonprofit fundraising strategies, Jon Pratt locates foundation grants as low on both of the critical dimensions of a good revenue source: reliability and autonomy. [15] Major architects of modern day organizing would agree with this analysis, observing that foundation grants neither build ownership in the organization nor provide stable funding. Nevertheless, as we have already seen, foundation funding remains a major source of organizing funding, far exceeding internally raised funds in a high proportion of organizations. Both organizers and funders of community organizing actively seek to increase the amount of foundation funds granted to organizing. And, within the funding community, a robust discussion takes place about the pros and cons of general operating vs. special project support. [16]

We will turn later to thinking and trends within the foundation community about organizing. Right now, we focus on what organizers and knowledgeable observers have told us about the strengths and limitations of foundation (and then other) fundraising as one revenue strategy in supporting organizing.

Most of the organizers we interviewed perceive foundation grants as money that can be gotten in a short time, in large amounts, and that can attract other foundation funding. Many organizers say that, given the constraints on their time, it is more productive to spend a day writing a grant proposal than it is talking with prospective members or donors.

Organizer Josh Hoyt:

"It would be harder for me to make phone calls to 20 < wealthy individuals > than to write a funding proposal."

Seth Borgos, Deputy Executive Director for Research and Development of the Center for Community Change, notes that

"Most Executive Directors have impossible jobs . . . they gravitate to foundations since the front end investment seems lower."

But, true to Pratt's analysis, many organizers also perceive foundation grants as money that is hard to maintain over time, due to the time limits imposed by most foundations and the tendencies of foundation