Where Has All the Money Gone?

On May 19, 2016 we announced that if we did not raise $150,000 in the following six weeks, we would close our doors. Graciously, our community stepped up and donated the funds necessary to keep our doors open. Individuals, companies, and organizations made meeting our goal possible.

However, during this campaign (the first of two efforts to raise a total of $300,000 by October 1), many individuals asked us, “Why aren’t you receiving support from ____?” You fill in the blank.

The easy answer is we simply do not meet the current eligibility requirements for a variety of foundations or organizations, or the fund from which we do receive monies has shrunk considerably.

Simply put, organizations, foundations, and even individual donors can choose to change the focus of their giving at any time.  Over the past several years, organizations and foundations that have traditionally been major sources of revenue for NWAWS have either changed their focus or have reduced the resources they are able to distribute to us.  Consequently, NWAWS, like so many other nonprofit organizations affected by such a change, need to identify other sources of revenue. Ultimately, statistics and trends show that our future source of funds must be individual donors.

Let’s consider three examples that will illustrate this point.  NWAWS has been a recipient of funds from United Way for years. At its peak, we received $71,000. This year we will receive close to $22,000. Have our programs changed? No. Has the focus of United Way changed? Yes. Is there anything unique in United Way in changing its focus? Not really. Overtime United Way has shifted to respond to different community needs, patterns of giving and their ability to address societal needs. In doing so, the pool of funds available for ‘member’ agencies has varied greatly.

Since 1996 United Ways around the country have been adopting the community impact model. The adoption process has been slow, and in my opinion erratic, but in its own way it has been steady.  Slowly, more and more local United Ways have switched to this model. In 2013 United Way of Northwest Arkansas began its own process of transition. Over the course of that transition, funds available for member agencies who do not fit that model decreased.

A second example is the state funding we receive through the Domestic Peace Fund. We have received revenue from this fund for years, and at one time we received more than $40,000 from it.  This year we will receive slightly more than $18,000. Why is this? It is because the fees that provide revenue for the fund have decreased considerably. The Fund is supported by fees associated with Marriage Licenses and Bail Bonds.  Over the last few years, Bail Bond fees have decreased significantly. The amount of funds available from this source in 2016-17 is 43.6% of what it had been in 2012-13. One of the causes is the increased practice in Arkansas of judges releasing accused offenders from jail on their own recognizance, negating the need for a bail bond. No bail bond means no fees for the state fund. It is as simple as that.

Finally, let’s look at foundations. Foundations change their focus and priorities with some regularity, and when they do many organizations that have previously accessed foundation resources are cut out of the loop. This process is never pleasant and is rarely well-publicized. Clearly, it is the right of a funder to change or shift their priorities. However, those who no longer meet the new criteria for support must decide how they will deal with the loss of revenue. For some the answer lies in a reduction in services, for others, a realignment of activities, and for others a quickly designed effort to find replacement resources.

Foundations shifting their priorities, United Way changing its focus to respond more aggressively to certain community needs, and government revenue shrinking are all ways resources disappear from nonprofits. Failure to find replacement income for the streams that disappear places a nonprofit in a difficult position. Therefore, it is important that a nonprofit diversifies its resource base as much as possible.

One of the best ways to do this is by creating a reliably large, recurring, and diversified individual donor support base. These individual donors are vested in the mission. Individually, a loss of one should not create a huge hole in an organization’s revenue stream.

The goal of the campaigns conducted by NWAWS was, and is, to create that reliable, large, recurring, and diversified individual donor support base. This is not because we are opposed to seeking funds from sources that tend to be less reliable, especially considering that those less-reliable sources can often represent a large portion of a budget if successfully obtained. Rather we want long-term sustainable revenue that helps ensure that we can provide the quality and scope of program that the community deserves and that demand implies we need.

The truth is, some money has disappeared. The organizations who everyone thinks should be the savior of the nonprofit sector are not created to do so. We have relied on them for too long, and now we are focused on securing the support of individuals who are vested in our mission and work. That is the only way we can truly become sustainable.

Several years ago, a former client wrote us a letter thanking us for being a part of her village when she needed support. Would you consider joining our village so we can support other families like her? You can be part of the solution by joining our efforts to ensure reliable recurring revenue by making a donation to NWAWS. Every gift matters to those who find refuge behind our doors and help in our services.

Read the letter by clicking below: