Raising money isn’t hard, it’s just hard work, something Kim Klein likened to getting stoned to death by popcorn. But if money is needed, she added, nonprofits must learn to ask for it, especially in “these particular times.”
Bracing for changes brought by state and federal budget cuts and the newly passed tax plan, nonprofit leaders gathered in Missoula on Wednesday for a crash course on raising revenue to support what represents one of Montana’s largest economic drivers.
Nonprofits provide more than 11 percent of all Montana jobs. Missoula alone is home to 232 wage-paying nonprofits that range from domestic violence to the environment, poverty, housing and equality. Without the generosity of donors, coupled with dwindling state and federal revenues, many of those efforts will face challenging times.
“There’s a lot of trepidation, a lot of uncertainty,” said Meredith Printz of the Missoula Community Foundation, which hosted Wednesday’s forum. “The tax plan we know will help the top 1 percent but will really hurt everyone else. So the need for critical services that nonprofits provide is going to escalate while at the same time funding is decreasing on the state and federal level.”
By raising the standard deduction, the newly passed Tax Cuts and Jobs Act reduces the number of taxpayers who will itemize deductions. Combined with a decrease in the top tax rate, the disincentive to itemize is expected to reduce charitable giving anywhere from $4.9 billion to $13 billion annually, according to a study by Indiana University.
To help overcome that anticipated decrease in giving, the Missoula Community Foundation tapped Kim Klein – one of the nation’s leading fundraising experts – to help local and state nonprofits navigate the realities of the Trump administration and a Republican-led Congress.
Klein, of Klein and Roth Consulting, learned the fundraising ropes 40 years ago while training as a minister in the Methodist church and while working at the La Casa del Madres domestic violence shelter in San Francisco.
Since then, she has written numerous books on the subject, including “Reliable Fundraising in Unreliable Times” and “Fundraising for Social Change,” which is now in its seventh edition. While she admits that challenges lie ahead, they aren’t insurmountable.
“The difference between now and any previous presidential administration is this president has no commitment or interest in the nonprofit sector, where every other president, whether Republican or Democrat, has always been very interested in nonprofits and done a lot for them,” Klein said before taking the stage.
“Coming down from the top, that really puts nonprofits in a bind, and there’s a lot more need, so people have to step up and meet the need with far fewer government resources.”
In 2016, according to the Montana Nonprofit Association, the state included more than 9,500 nonprofits that paid more than 51,000 employees roughly $2.1 billion in wages. Added up, it represents 11.4 percent of all workers in the state and 11.6 percent of all wages.
In addition to that, nearly 66 percent of all Montana charities are run by volunteers who together logged more than 29 million hours of work in 2015. That represents 14,000 full-time jobs and places Montana 11th in the nation.
“Nonprofit budgets are being hit on the state and federal level, so we need to be really resourceful in raising money, being creative and doing the things we need to do that are so important for our community,” said Printz. “Our community wouldn’t run if it weren’t for our nonprofits.”
Those present Wednesday represented a wide variety of local nonprofits, including housing and hunger, open space, environment, domestic violence, racism, poverty and other social issues. Only one organization reported a budget over $5 million. Most operated on less than $500,000 a year.
Looking forward, Klein said, nonprofits will need to do more with less, relying more heavily on volunteers while diversifying their donor base.
“Instead of hiring staff, they’re going to have to make up for it in people giving time,” Klein said. “It’s not going to be easy, but it’s going to be possible. A lot of nonprofits tend to work in a panic, and that’s not smart.”
As income inequality grows, Klein believes a greater portion of the population will get by with less, which also means they’ll have less to give. And if wealthy donors no longer have a financial incentive to give under the new tax plan, it too could lead to a decrease in giving.
Coupled with other challenges, nonprofits will have to get creative to survive, Klein said.
“There’s already a big overemphasis on major gifts, so they’ll need to welcome people who can give $35 and $50 as opposed to keeping their eye on these $100,000 gifts,” Klein said. “They’ll need to look in places they haven’t before.”
One of those sources could be the Millennial generation, which represents a large portion of Missoula’s population. While they may have less to give, statistics suggest they’re more apt to give than older generations, Klein said.
“I think a lot of times people overlook Millennials as a source of money,” she said. “They’re a very giving generation, even though they don’t have a lot of money. They’re not always going to be in their 20s and 30s, so it’s important to build those relationships now.”