BEATING THE ODDS!

A (reasonably) successful model for funding 2-1-1

AIRS Conference 2009Jeri Shumate, Presenter

jeri@211info.orgMonday, June 1 10:00 – 11:30 a.m.

WHO ARE WE?

Embedded in United Way?Embedded in government?Program within a larger agency?Blended with crisis?Independent non-profit I&R only?Other?

What are the odds?

The latest statistics from the Small Business Administration (SBA) show that "two-thirds of new employer establishments survive at lease two years, and 44 percent survive at least four years." This is a far cry from the previous long-held belief that 50 percent of businesses fail in the first year and 95 percent fail within five years.

The May 2002 report on New York City's Nonprofit Sector, published by the Nonprofit Coordinating Committee of New York, said that nearly a quarter (24%) of surveyed non-profits in New York City pursued joint venture or merger efforts with other nonprofit or for-profit organizations in an effort to increase revenues.

The motivation for the urge to merge is more striking when the survey data are combined with data in a later section of the report. According to the report's scenario analysis, 29% of New York's public charities had deficits in 2000. If total revenues were to decline by 15%, that portion would rise to 71%. In that case, the total net income of public charities in New York would shift from a $4 billion surplus to a $2.5 billion deficit.

THE QUESTION: How do we achieve sustainability?

a. Private Sector: “You’re part of government, right?”

b. Public Sector: “There’s too much need! Foundations should cover this gap!”

c. Foundations: “We don’t support operations.”

PHILOSOPHY

Everyone benefits from 2-1-1. Everyone needs 2-1-1. Every sector gains immense value from 2-1-1. “Everyone” must be defined broadly!

Thus—everyone has a responsibility to pay for it—and no one has to pay for all of it.

OUTCOME:

• 2-1-1 weathers the storms of any economic crisis, and rides the crest of the waves as funding ebbs and flows

• 2-1-1 remains engaged during any crisis, because it no longer has to manage its own state of crisis

The Philosophy, with Bones Added• United Way is a partner• 2-1-1 is a proven disaster resource• A standardized system has national value• Where all 2-1-1s in a state are integrated into

a single system, that system has statewide value.

• A locally-developed system has local value• A 2-1-1 that creatively participates in its

community brings unique value to its region—and people will pay you for that.

Forget the three-legged stool metaphor…

You need as many legs as you can find!

ORIGINAL BASIC FORMULA

• Based on $1 per capita per year

• United Way (local) 25%• Local Government 25%• State Government 25%• Federal Government 25%

2009 BASIC FORMULA

• United Way (local) 20%• Local government 20%• State government 20%• Federal government 20%• Fees for service, etc 20%

Figuring Per Capita

• http://www.census.gov• Current, with breakouts by county

• http://www.census.gov/population/www/coop/fscpe.html• State data providers

• http://www.naco.org/• A friendly place to find VIPs

EXAMPLE: Oregon

• State population: 3,790,060

• Each share:

• at 20% = $758,012 ea

• at 25% = $947,515 ea

ANYONE GETTING ANY PORTION OF

THESE SHARES YET?

FUN FACTS . . .

When the Calling for 2-1-1 Act passes, funds will likely be distributed according to a per capita formula. You will likely receive more than 25% from the feds in the first two years, and approximately 25% in the remaining years.

Let’s Go Local….MULTNOMAH COUNTY, OR 717,880

Fairview 9,735

Gresham 100,655

Lake Oswego (part)* 2,315

Maywood Park 750

Portland (part)* 573,592

Troutdale 15,465

Wood Village 3,100

Unincorporated 12,268

LOCAL FUNDING

Where’s the money in your community?• Are you in a disaster-prone region? Should

emergency management participate in funding 2-1-1?

• Are there local initiatives you can join (i.e., public health outreach, 10-Year Plans to End Homelessness)?

• How does your board feel about seeking gambling revenue? What is your relationship with local tribes?

POSSIBLE SCENARIOS

• Create a subset of the local 25%: each city contributes 25% and the county covers the unincorporated areas.

• The county covers 15% and the cities pick up 10% (the county covers 25% for unincorp areas)

UNIQUE FEATURES OF THE LOCAL EQUATION

• Engage local electeds, leaders, stakeholders, planners, systems to figure out who pays for 2-1-1

• Analyze local politics, needs, and—most of all—realities when you ask for local support

STATE FUNDING

• Some of us already receive state funding! Yee-haw!

• Some (many?!) of us have received it, lost it, got it back again, watched it shrink by 90%....

LET’S START OVER!

Local lessons, enhanced

With the premise that the state should come up with 20%, what services does your state need that you can provide? Where is there both need and money?

Oregon: Food Stamps & MCH line

Oregon: Low Disaster Vulnerability

Almost all of us: EITC

ARRA

A quick word about stimulus dollars:They need to be accessed through

government entities, so relations at the state and local levels are paramount. There are still opportunities!

MORE ABOUT STATE & LOCAL FUNDING

Each state is unique: CT & OR

• CT = eight counties• Smallest: 117,345 people, 513 sq mi.

• OR = 36 counties• Smallest: 1,319 people, 1,715 sq mi.

Remember Multnomah...MULTNOMAH COUNTY, OR 717,880

Fairview 9,735

Gresham 100,655

Lake Oswego (part)* 2,315

Maywood Park 750

Portland (part)* 573,592

Troutdale 15,465

Wood Village 3,100

Unincorporated 12,268

BACK TO STATE:

I AM NOT DRIVING SIX HOURS TO ASK THE WHEELER COUNTY

COMMISSION FOR $264.

A FINAL COMMENT ABOUT THE STATE

I believe the concept of some kind of per-capita assessment should never be considered permanently “off the table” and this conversation belongs at the state level.

THE UNITED WAY

• IF NOT EMBEDDED:

• Are they a generous sponsor?

• Are you a generous partner?

THE UNITED WAY

• IF EMBEDDED:

•Unique funding challenges

•What has worked so far?

•United Way politics require as much sensitivity as any other (maybe even more)

A WORD ABOUT “MISCELLANEOUS” REVENUE

What fees for service do you currently generate?• Directories• Trainings• Answering services• Others?

What about events and individual donor campaigns?

IMPORTANT!

• We don’t live in a pure world.• The pure model will likely never be seen

anywhere.• Until the federal act is passed, or until

your state can organize itself to come on board, or until peace and harmony are restored to the universe…

ADAPT!

ADAPT?

• Use a 33-33-33 model for now?• Can you offer partial services? Maybe

it’s a 15-15-15-15 model, and you only provide 60% of services until the rest of the money is raised.

• When the Calling for 2-1-1 Act passes, can you expand using a 40-20-20-20 model, then use those years to build the rest?

QUESTIONS?

Sources for quotes in early slides…

• The Seven Pitfalls of Business Failure and How to Avoid Them by Patricia Schaefer; Copyright 2006, Attard Communications, Inc.

http://www.businessknowhow.com/startup/business-failure.htm

• Will There Be A Non-Profit Shakeout? By: Susan Raymond, Ph.D., 06/15/02 http://www.onphilanthropy.com/site/News2?id=6190&page=NewsArticle

THANK YOU!

For more information:

Jeri Shumate, MA, CIRS360-901-9619