Artists Collective Needs Firm Hand, Fiscal Plan
Dollie McLean is a passionate, admired, inspirational soul. Together with her husband, Jackie, she turned a remarkable idea into a state-of-the-art facility, the Artists Collective, on Hartford’s Albany Avenue in 1999. But, the nonprofit’s new headquarters was doomed from the start.
Unfortunately, the Collective failed to fully fund its endowment, which could be used for paying off debt and for maintenance of its 40,000-square-foot building. These expenses drained money from its operating budget instead, and now it is running out of money. A poorly executed business model for nonprofits is sadly all too common. Many a founder has launched into building a nonprofit organization on the wing and prayer of believing others will think their idea is equally remarkable and support will just materialize. But being simply remarkable can never carry the burden of building a nonprofit corporation.
It took the Artists Collective funders 20 years to realize the organization was undercapitalized, lacking experienced administrators and existing without a fundraising strategy — a perfect recipe for failure. But now, help should be paramount, starting with proper and strong governance from the board of directors.
To turn this valuable asset around and support the incredible outcomes it can achieve, the board should be firm in asserting its duty of care, requiring a reassessment of the purpose, operational plan and feasibility of the organization including, most important, a financial projection on revenue generation that goes beyond “If you build it they will come.”
Millions of dollars are being requested by the Collective, dollars that could be used more effectively by other organizations with equally remarkable ideas and appropriate strategies and operational acumen. In order for the Artists Collective to prove its case, it needs to focus not only on its historical program success, but on its business plan for sustainability, specifically philanthropy.
A nonprofit must have a balanced strategy for philanthropy, to ensure it can weather the economic, social and political storms that are sure to arrive. This balance is designed through policy and through professional leadership. If an organization’s executive director doesn’t have the expertise, then a professional needs to be hired.
Contributions from individuals, starting with the board and some invaluable high profile alumni and supporters, are paramount. Relying on corporate and government funding as the sole development plan is a death knell.
As early as 2003, the industry was sounding the alarm to the more than 1.5 million nonprofits in the US: seek individual giving for sustainability. Nonprofits must identify individuals who find their purpose and mission valuable and then prove their worthiness for support. Stewarding those donors is essential to a nonprofit’s success. This means personally inviting them to visit the organization (please, no letters), showing them the accomplishments and demonstrating that the administration can be trusted to perform in a fiscally prudent way. That is the key to philanthropic sustainability.
Funders begin to balk when nonprofits hit the rocks. The hard truth is no one wants to fund a sinking ship no matter how remarkable it is, which is one reason to avoid crisis campaigns for donations. It’s like telling potential donors, “I need a year’s worth of mortgage payments because I bought a house that was too big for my budget, and even though it’s a temporary fix, I’d like you to consider giving me money for it anyway. I’ll figure out how to keep it funded later.”
Instead, the strategy for a turnaround is to develop a solid and justified business plan with financial models showing what is possible with donor support, when it can be realized and who will be in place to lead it.
I believe in the Artists Collective. I think the founders’ idea is remarkable but the organization needs help. Fortunately, the Hartford region has a broad pool of qualified executive directors, experienced board members and successful consultants to guide and bring the Collective back to a stable financial base and become the whole and balanced asset the region needs.
Sondra Lintelmann Dellaripa of Old Saybrook is president and principal of Harvest Development Group, a Middletown business consulting firm that works with nonprofits.