Philanthropy Industry Outlook




On the Front Lines in a Regional Battle Against Need

A score of Kansas City area leaders in the philanthropic community braved a bitterly cold December morning to attend a spirited assembly on the challenges facing their community. Ingram’s Magazine hosted the assembly at its Freight House District offices, the 14th year Ingram’s has done so as part of a longstanding commitment to philanthropy in the Kansas City region.

In a fast-paced two-hour conversation, they covered the surprisingly broad impact of federal health-insurance reforms on their own organizations, both in terms of mission and as employers. They also tackled issues like fund-raising challenges and strategies, pondered answers to the long-term puzzle of generational need, and assessed the contributions of the educational system, cultural shifts and broader economic trends in terms of the challenges—and opportunities—for each of their respective concerns.

Although the challenges are many—they always are—the participants proved to be surprisingly positive about their ability to meet them.

 

Opportunities

As an opening question, those at the table were asked to assess either the most pressing challenge their organization faced or the most promising opportunity on the horizon. Some people chose to see the potential opportunity that challenge often brings.

Bridget McCandless, president and CEO of the Healthcare Foundation of Greater Kansas City, chose to focus on opportunity. For her organization, given its mission to serve the uninsured and underserved, she sees potential in the Affordable Care Act, better known per-haps as Obamacare. “That is going to be the area we spend most time and energy,” said McCandless, “helping people understand their options in the new landscape.”

An optimist, Kay Julian, president of the National Multiple Sclerosis Society, sees the potential that those who are unemployed or underemployed have in sharing some of their skills and talents with her organization. “Volunteerism is so critical for what we do,” said Julian.

New to Kansas City from Des Moines, Teri Retzlaff, senior vice president of resource development for the United Way, sees an opportunity to align specific community needs with targeted donor interest, something her organization has not done a lot of in the past.

“Our biggest threat is also our biggest opportunity,” said Amy Allison, executive director of the Down Syndrome Guild of Greater Kansas City. As Allison reported,
80 percent of people with developmental disabilities are unemployed or underemployed, which makes it difficult for them to manage an adult life. She believes that the Business Leadership Network of Greater Kansas City, to which she belongs, has the wherewithal to address this problem. “I really think we can move the needle on this,” said Allison. “It is going to take a lot of work.”

Gloria Jackson-Leathers, director of the Kansas City Civic Engagement program at the Ewing Marion Kauffman Foundation, sees great potential in the Maker movement, which brings together makers, creators, innovators and inventors. Kauffman first brought the movement to Kansas City in 2011, and it has been growing ever since. In addition to an annual Maker’s Faire, the foundation is also building out Maker Spaces around the city where would-be makers can find the resources they need to innovate.

Hope House, a domestic violence shelter with one facility in Lee’s Summit and another in Independence, has seen demand for its services increase 12 percent year over year. Despite the economy, funding has, if not grown, at least remained stable. This combination of factors has inspired ever-hopeful board chairman Chris Ferguson and her staff “to be creative around our revenue generation, vs. relaying solely on grants and individual donations.”

 

Challenges

For many of the participants, one big challenge in the immediate future, if not the major one, is coping with the changes wrought by the ACA. “I would say that our greatest challenge is just trying to understand and deal with the repeated changes that have been occurring over the last several years,” said Don Harkins, CEO of the Rehabilitation Institute of Kansas City. For him, the Affordable Care Act is one more major change to deal with.

“The Affordable Care Act is a great concern for us,” affirmed Janna LaCock, executive director of the Leukemia & Lymphoma Society. “As they start to put the meat on the ACA bones, we must make sure that the needs of the patients are being considered and taken care of.”

“Helping individuals navigate that system—get the most out of it—I think will be a big challenge for us,” elaborated Whitney Sunderland, president of the Brain Injury Association of Kansas and Greater Kansas City.

For Kristin Riott, executive director of Bridging the Gap, the issue of health takes a different turn. With her organization, the main challenge is “helping people understand the link between the health of Kansas City and the health of its natural systems.” As an example of what her organization does, Riott cited a major tree-planting project to help the city deal with losses from last year’s drought and explained the health benefits thereof.

Phil Hanson, president and CEO of the Truman Heartland Community Foundation, worries about “the craziness that is happening in Washington” and wonders whether someone might be temp-ted to tinker with the tax deduction for charitable giving, a deduction that has been in place since 1917. Although such a change is admittedly unlikely, “I just think we need to not be complacent,” said Hanson.

“We’re getting ready for the second round of sequestration,” said Susan Stanton, CEO of Operation Breakthrough, who also worries about Washington. In addition, Stanton cited a continuing decline in funding from the state of Missouri. “So clearly the financial challenges are pretty enormous,” said Stanton.

 

Collaboration/ Competition

The United Way’s Teri Retzlaff observed that one major difference she noted on coming to Kansas City was the intensity of competition among non-profits—at least compared to Des Moines, where she had been working. Retzlaff saw “an opportunity around this table to collaborate a bit more.”

In that the participants included both funders and recipients, the question was raised as to how well the two groups interact. “You know Kansas City is a little town,”
said Bill Bruning, current board chairman of the REACH Foundation, “We all have to get along together.” Bruning should know; he has participated in both ends of the “ask.”

Bob Dunn, community affairs vice president for J.E. Dunn Construction, described himself as “kind of a red-headed step-child” because the Dunn Family Foundation gives money but also raises it. Said Dunn, “People don’t know whether I’m going to ask them for money or give it.”

Gloria Jackson-Leathers noted that at the Kauffman Foundation, “We expect non-profits to do a fair amount of collaborating, but we also stress that they remain true to their own particular mission.”

On the giving end, there are efforts being made to align donor interests with distinctive missions. Denise St. Omer, vice president of community investment for the Greater Kansas City Community Foundation, observed that the GKCCF staff is helping donors align their giving with those entities where they can have the greatest impact.

 

Obamacare

The question was raised as to whether the ACA would be a net plus or net minus for the philanthropic community in greater Kansas City. As the participants suggested, the ACA affect non-profits in any number of ways.

“That’s a good question,” said Bill Bruning whose organization is focused on improving access to care for the medically underserved and improving the overall quality of caring. A long-time health-care advocate, Bruning has come to the conclusion that an organization like the REACH Foundation could not fully succeed without the help of a system that was effectively delivering care. “So as controversial as the ACA is,” said Bruning, “I think at least it is forcing a dialogue, and it is a dialogue that we are very actively involved in.”

Bridget McCandless saw an opportunity for the non-profits to help the people they serve “to use insurance appropriately in the right place and the right ways so they don’t end up with a financial burden.”

Angie Galindo, executive director of the American Heart Association, sees a major opportunity in her organization’s leadership role. “We are going to be seeing changes with the Affordable Care Act and those leaders getting involved,” she said.

“It’s just a bit of a chaotic state right now,” said Whitney Sunderland in regard to area health-care providers. “There is a lot of shuffling trying to figure out where the sources of funding will come from and how that is going to change the population that they serve.”

Scott Justvig, divisional director of dev-elopment for the Salvation Army of Kansas and Western Missouri, raised an issue of concern to all funders and non-profits: the ratio of administrative expenses to income, a ratio that funders scrutinize. That ratio will not increase greatly for a large organization like the Salvation Army, but at small agencies it “could take a big hit.”

Amy Allison saw the ACA as “a double-edge sword” for Down syndrome families. On the one hand, since Downs syndrome is considered a pre-existing condition, families should have an easier time getting insurance. On the other hand, the increased cost for Downs syndrome individuals may make them seem, in the eyes of the heartless, as a drain on society. Today, as Allison pointed out, roughly two-thirds of Downs syndrome infants are terminated in the womb.

 

Uncertain Times

Given the economic uncertainty, with an increased level of need among populations served but a stable or declining ability of funders to meet those needs, non-profits have developed a wide range of strategies to cope.

“We finally decided that in any economy where maybe one industry is having trouble,” said Janna LaCock, “there’s usually another industry that ends up benefiting from it.” By talking to those companies that were prospering, the Leukemia & Lymphoma Society had its best year last year. This was necessary as the society has also seen an increase in the number of people who accessed the financial aid portion of its services.

Kay Julian believes that hard times in-crease the sensitivity of would-be donors and heighten the “sense of needing to give back.”

The Salvation Army has witnessed a similar phenomenon. As Scott Justvig noted, five of his top 10 donors increased their giving in significant fashion this past year. “It’s not just a donation,” said Justvig, “These are folks committed to mission and ministry, and they’re intimately involved in the health, the welfare, and long-term stability of the organization.”

The Down Syndrome Guild is cultivating a younger base of future donors through their involvement in community-service projects. “They’ll also be the next set of HR directors or employers or entrepreneurs,” said Amy Allison. “We think they will donate to us, having been with us and grown up with us and knowing about our organization as volunteers.”

 

Supply and Demand

A corollary question was whether economic instability and misguided government programs had created an insatiable demand for services from non-profit providers.

“If you’re talking about a permanent underclass,” said Susan Stanton, “I fear that might be so. We clearly serve families where there has been multi-, multi-generational poverty.” Good jobs and a decent education, the traditional paths out of poverty, Stanton sees as becoming less and less accessible.

“There’s also a kind of a predatory education system that is helping poor people get degrees that don’t land them jobs,” said Bridget McCandless, “and they’re ending up with a level of debt that is absolutely staggering. It’s a new level of poverty that no one talks about.” McCandless believes that non-profits need to do a better job educating their clientele on educational choices.

“Not every kid has to go to college,” said Bob Dunn. “Why aren’t these schools in the inner city and other places teaching these kids vocational skills?”

“We should not let these kids fail,” Dunn continued, “because when they fail, they end up at reStart or in homeless shelters or committing crimes, and somebody like J.E. Dunn is building another prison.”

“Kids can’t choose their ZIP codes,” said Evelyn Craig, president and CEO of reStart. “So every ZIP code should have good education and have access to things that people need.” Scott Justvig, like Craig, cited the number of seemingly small difficulties that mount up for people living on the edge. These small challenges defy traditional guidelines for emergency assistance. “The realities of the day-to day-hassles,” said Justvig. “Those are the killers for our clients.”

As Craig explained, too many emergency-assistance programs lack flexibility in their guidelines with the net result that “we give people just enough to stay poor.” The ability to customize assistance, she argued, pays dividends down the road.

Susan Stanton confirmed what Craig said about individualization. “Unfortunately, when you do get government funding,” Stanton added, “it comes with a great deal of regulation and uniformity of service.”

Bridging the Gap, as the name im-plies, is one of those programs that meets otherwise unmet needs. As Kristin Riott pointed out, her organization helps edu-cate its clients on how they live healthier and save money at the same time. “I think there’s a deeply entrenched American lifestyle that is expensive, that is unhealthy, and that it doesn’t actually take a lot to move into a different direction,” said Riott.

Bill Bruning argued that the non-profits gathered at the table represent the American concept that “we can do it better directly if we can do it ourselves.” That is why the government policy to support this premise through tax deductions is critical. “There are frustrations any time you deal with federal money,” said Bruning, “but basically I would take our system of a mix of federal support, private support, private focus, and private determination over any system I’ve seen in Europe.”

“There are not enough Band-aids and remedial services to solve social problems any more,” said Teri Retzlaff. “You really have to look at the root causes.” For Retzlaff, school readiness is a key component of that. “The playing field is not level,” said Retzlaff. “So the challenges are steep.”

Amy Allison spoke of her 10 “life-changing days” in Russia, and “everything there is government,” she said. “I see that trend starting here in the United States, where people think the government can solve everything. But we can solve it much better with a community-based organization, and you get less sense of entitlement.” As an example, Allison spoke of the development of giving circles, often composed of local groups that assess and attempt to address the needs in their im-mediate communities.

“The best thing is an appropriate productive partnership between what’s happening at the government level and what’s happening at the non-profit level,” said Evelyn Craig.

 

Cultural Issues

On the question of whether there has been a cultural change in the clients served over the years, Bill Bruning noted that in-creased immigration, if nothing else, had made a major difference. “These are people who don’t know how to access the system,” he said.

When he was president of Truman Medical Center board, for instance, Bruning was amazed to see that the hospital’s second most pressing demand for interpreters was for Hmong. “The one-size-fits-all health system cannot begin to address that.”

The Leukemia and Lymphoma Society has started trying to train all staff on cultural differences, specifically with the Latino population, said Janna LaCock. “What drives them to get health care is much different in their community than it might be in others.”

Bridget McCandless spoke of a new group of impoverished, namely seniors or at least those who will become seniors in the next 20 years. “This is a group that does not tend to access services terribly well,” said McCandless. “It’s an area that requires non-profits to pay attention to people who have incredible food insecurity, transpor-tation insecurity and housing issues.”

What Don Harkins has seen is not the emergence of an entitlement mentality among his clientele but rather something more profound. “People are coming in more aggressive,” he said. “It’s desperation we’re seeing on the part of clients seeking services.”

“I totally agree with Don,” said Susan Stanton. “It’s not about entitlement. I think people are desperate.” Through her work with Operation Breakthrough, Stanton has come to see that people mired in poverty are searching for respect. “If you treat them with a little respect,” said Stanton, “they don’t use the language of entitlement.”

“Our public discourse, we’ve not done that well in this country,” said Evelyn Craig. “I don’t think we’ve responded well to poverty.”

Compounding the sense of desperation, argued Janna LaCock, is the sense of frustration. “Communication plays a big part of that,” said LaCock, who lamented the unnecessary technological barriers that are placed in front of desperate people.

The Salvation Army has a program called Pathway of Hope to deal with multi-generational poverty. “You need that safety net,” said Justvig. “It’s got to be there to catch those people, but you’ve got to have intensive case management and someone come to along with them.”

In speaking of root causes, Kristin Riott raised the issue of fatherlessness. As she noted, “A child is going to be far more likely to be raised in poverty when raised in a single-mother household.”

As Janna LaCock observed, the grandparents used to provide a safety net for Mom and Dad. Today, the grandparents are often not even in the same city. “People don’t have the village behind them that my parents had,” said LaCock.

Unfortunately, Bill Bruning noted, as transformational as the Affordable Care Act aspires to be, it does not touch “the underlying core level of poverty and dysfunction.”

“You’ve got to look at what’s causing people to be in line at the food pantry, what’s causing people not to be able to get a job and earn a livable wage, what’s causing people not to graduate from high school,” affirmed Teri Retzlaff. “You have to get to the point of origin.”