News and Updates

For Immediate Release

October 8, 2010

Contact:  Alan Young, ayoung@powersyoung.com

Young & Company Announces New Name

Phoenix, AZ – Alan M. Young, chief executive officer of Young & Company, a consulting firm specializing in management and capital development planning and counsel for nonprofit organizations, has named Benjamin W. Powers as a partner in the firm.

Mr. Powers joined Young & Company in 2000 and has successfully served non-profit organizations representing the arts, secondary and higher education, human services and healthcare.  Prior to joining the firm, he spent 10 years as Director of Development and Summer Programs Director at the Orme School near Mayer, Arizona, and was the Director of Gift and Estate Planning for the John C. Lincoln Health Foundation.

“Ben has been an integral part of the Young & Company team almost from its inception and has earned a reputation for successfully completing campaigns against overwhelming odds. Ben has provided scores of our clients with solid advice and wise counsel on the full range of issues facing today’s nonprofits: capital campaigns, governance models, board development, annual campaigns and business planning. Ben has always done the heavy lifting. He is also has a great sense of humor that allows him to rise above the grind, bringing clients and coworkers with him. He is a credit to our company and our philanthropic community.

I am pleased to announce our firm’s new name, Powers Young & Company, to reflect his years of service to our firm and his reputation in the community as a trusted and reliable friend, mentor and professional fundraiser.”

Powers Young & Company was formed in May 2000 with a dedication to the advancement of Arizona and its nonprofit organizations.  A respected industry leader with a solid reputation for successfully advancing major community projects, the Powers Young & Company team delivers exceptional results in the areas of capital development planning, management and consulting services; strategic and business planning; annual fund planning and execution; board development; marketing; and interim management. To learn more, visit www.powersyoung.com.

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Does this sound familiar?

…You are a CEO of a midsized social service agency. You have managed to survive this economic downturn by serving your customers well and taking good care of your donors and volunteers. Your five-year strategic plan, completed in 2008, called for a new facility to be funded by a capital campaign.

...Then the economy got in the way. Your stream of federal, state and local grants is still available, but reduced. Through your hard work, annual support from your loyal donors continues to flow, but many $25,000 gifts have become $10,000 gifts. The need for your services is more critical than ever. You have clients coming out your ears. You need that new building, but your board isn’t ready to commit to a capital campaign. What do you do?

How about a PRI? A Program Related Investment (PRI) is an investment by a foundation in support of a charitable project or activity that aligns with its charitable mission. They are usually loans, but can also be equity investments or loan guarantees. PRI interest rates range from zero to just below the market rate. Family, community, corporate and private foundations can all make PRI’s.

The IRS defines Program-Related Investments as those in which:

1.     The primary purpose is to accomplish one or more of a foundation's exempt purposes,

2.     Production of income or appreciation of property is not a significant purpose, and

3.     Influencing legislation or taking part in political campaigns on behalf of candidates is not a purpose.

Everyone is a Winner. PRI loans count towards a private foundation’s required annual five percent distribution. Once the loans are repaid, those same funds can be reused for new projects and programs. In these challenging times, PRI’s allow a foundation to continue addressing critical needs without selling assets. For a nonprofit, the PRI is a potential funding source when significant gifts or traditional financing options are hard to come by. PRI’s can be used to leverage other dollars, either gifts or as an incentive for traditional lenders to step in as partners.

What are the requirements? Although the purpose of the PRI is mission driven, making a PRI is both a program decision and an investment one. PRI funders, especially for significant amounts, often have an existing relationship with the nonprofit and are confident that the amount can be repaid. That means that the nonprofit has a history of successful revenue generation, often beyond community philanthropy: dues, fees for service, or government grants for example. Also, unlike a traditional grant, because it is a loan, there will be documents involved that will generally require legal review.

PRI Leaders. The Ford Foundation was the PRI pioneer, making its first low interest loans in 1968. The Foundation Center shows 438 foundations nationally that list PRI’s as a type of support. There are more who are not so listed, but who will entertain proposals if there is a relationship and a reliable stream of income to the nonprofit from which to repay the loan. In 2009, the Bill and Melinda Gates Foundation set aside $400,000,000 exclusively for PRI’s. 

Some foundations will funnel their support through third party nonprofits with greater expertise in a particular program area. The Charter School Growth fund, which receives significant support from the Walton and Gates foundations, makes PRI’s to charter school management organizations whose member schools can demonstrate academic gains, especially with underserved student populations.

In response to the current recession and its effect on human service nonprofits, the Kresge Foundation began providing 24 to 36 month; interest free PRI’s from $250,000 to $500,000 to “high performance organizations,” which roughly translated means, on the front lines programmatically, and financially solvent.

In the last few years, several Arizona foundations have begun using PRI’s to further their philanthropic goals, and assist those nonprofits whose missions align with theirs. They really work. If you would like to learn more or you have used a PRI and would like to share your experience with others, contact Benjamin W. Powers at Young & Company.

For more general information on PRI’s, go to:

http://foundationcenter.org/getstarted/

Choose the search option and type in PRI. If you already have an account you can search the grantors by types of support and look for program related investments.

or

https://folio.iupui.edu/bitstream/handle/10244/401/accion.pdf?sequence=2

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There is hardly a segment of our world economy that has not been affected by the current economic recession and financial turmoil. The impact is especially great in Arizona, a state whose economy is so heavily dependent upon real estate development and housing construction.

Historic declines in the stock market and lack of liquidity in the housing and real estate sectors along with unprecedented projected deficits in the state’s budget will have a measurable impact on Arizona’s nonprofit organizations. On one hand, donors reeling from shrinkage in their own portfolios will be cautious about making major gifts and long-term commitments. On the other hand, demands on educational institutions, social service agencies, health care providers and other nonprofit organizations will be at an all-time high.

It is tempting to bury our heads in the sand, slash budgets and use the struggling economy as an excuse for not making every effort possible to move our development programs forward.

However, a research study by the Center on Philanthropy at Indiana University suggests “total philanthropy appears to weather storms in the stock market with greater resiliency and less dramatic fluctuation.”

The study goes on to report “even during (last) worst decline in the stock market (in 2002 when the Dow Jones Average decreased 17 percent and the S&P 500 Index dropped 23 percent), philanthropy increased by 1 percent."

The report concludes that there has been only one year (1987) in the past 27, in which philanthropy has dropped from one year to the next, even during years in which the market has dropped.

So, what are board members, senior nonprofit managers and development officers to do? Here are a few tips for navigating troubled waters:

Keep moving forward. You are in your position to advance the organization. Do not retreat. Do not withdraw. Do not go back. Advance. The going may be tough. It may be slow but keep going. Others will rally around your leadership. Your conviction will be appreciated. No matter what, continue to move toward your institutional objectives and do not allow pessimism and fear to shoot down your strategic plans, capital development needs and the endowment fund that is so necessary to your organization’s future.

Adapt. Many Arizona nonprofit organizations have been active here for over 50 and in some cases 100 years – longer than most for profit businesses. Their secret…they stayed true to their mission. They were led by capable, forward-looking people and they adapted their techniques to fit the times.

Keep your friends. Now is the time to invest in renewing annual gifts. In many organizations, the gifts of less than 100 donors make up 80 or even 90 percent of the philanthropic support that is needed. Make a list of your organization’s top 100 friends. Keep it on your desk. Look at it every day. Pick up the phone and call somebody. Make certain that these friends — on whom you so heavily rely — see or hear from you at least every 60 days. Take no one — not your board chair, not your CEO, and certainly not that little lady who has been putting some of her social security money in an envelope for you every month for the last 15 years, for granted.

Be frugal. Special events, direct marketing and fancy websites are luxuries that often cannot be afforded during these times. Face-to-face requests, especially of our closest friends, have proven time and again to be the most efficient use of time and money.

Articulate a compelling case. Let’s face it. It’s tough out there. When it comes down to writing a check, donors are going to be making some hard choices. Simply rehashing the same hash from last year’s appeal isn’t going to cut it. Neither is simply listing your organization’s many accomplishments. To be compelling, you must clearly express why a donor should take their hard earned money and give it away — and the impact their gift will have on another human life.

Donors respond to organizations that do society’s heavy lifting and get the big jobs done. They do not respond to institutional whining.

Keep asking. It is our duty to represent our constituents and ask for support — in good times and in bad. Throwing up our hands in frustration and predicting dire outcomes will lead to disaster. Some will say “yes.” Some will say “no.” Some may even surprise you with a larger gift than you expected. Always express your deepest and most sincere gratitude, even when the answer is “no” or “not now.” The economy will rebound. Keep communication open. These donors will be back and they will remember institutions that treated them with thoughtfulness and respect.

Surround yourself with the best. Now is the time to rely on the very best staff, vendors, suppliers and consultants — ones with a proven track record of getting the job done on time and on budget. In times like these, it is critical to rely on their expertise. Good people are going to be working somewhere. Keep them on your bus.

Invest. We know that even during good times, the amount returned to a nonprofit organization in charitable gifts is highly dependent upon the amount invested. The more invested the more returned. To achieve the same results, more, not less, must be invested in the development function. Use every single penny wisely and stay within budget.

Volunteers. Be prepared and make good use of fundraising volunteers. Chances are that their business is suffering and that their time is more limited than ever before. Nothing is more frustrating to fundraising volunteers than plans, lists, materials, agendas and appeals that have been poorly prepared by staff.

Be tenacious and resilient. If one way doesn’t work, try another. When that doesn’t work, try still another. The cost, in very real, human terms, is simply too great for us to fall short of our mission.

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