Senior Living Business: Encouraging Philanthropy In Troubled Times--

 

WEL Ties Its Evangelical Manor Capital Campaign To Renovations

March 1, 2009

Trying to secure the necessary financial resources for operations, capital, and endowment is a challenge for senior living providers in this uncertain economy. People in all financial groups are tightening their belts, long-established businesses are closing or on the verge, unemployment is continuing to rise, and we have no evidence yet that the economy has “hit bottom.” So what does that mean for philanthropy? For charitable donations?

“Just keep moving forward,” advised Thomas Mesaros, CFRE, President and CEO of The Alford Group, a consulting firm that has worked exclusively with not-for-profit organizations for 30 years. “It’s hard, because you want to step back,” he added. “You have to be cautious, but the conviction of your mission must be your guiding light. Keep telling your story to prospective donors. Tell them about your philanthropic interest in serving the whole community, that you’re providing a good lifestyle and sense of security for residents, and make sure that they get the message.”

For not-for-profits with a mission to serve the community, philanthropy is the only way to “lower a line down” to those who, otherwise, never would be able to participate in the kind of services that the organization provides. “Whatever you do, don’t whine,” Mesaros added. “Nobody wants to hear ‘woe is me’ stories. Instead, be positive. Talk about the community experience. And look ahead.”

To give the current state of the economy some perspective, he offered some facts and observations. “First of all, if we have 8% unemployment at the present time — and that may soon approach 10% — it means that 90% of the population is still working. Secondly, not everyone had investments in the stock market. And some of those who did are really quite wealthy. Instead of having $20 million in assets, perhaps they’re down to $15 million. That’s still a lot of money.”

Mesaros also noted that the United States has experienced 17 recessions since the end of World War II — and 16 recoveries. And in the 15 times since 1957 that the Dow lost more than 15% of its value, the average gain the following year was almost 34%, according to UBS.

“We’re concerned about bank failures,” he added, “and people are relating this economy to The Great Depression. It’s certainly a serious economic situation, but we had 25% unemployment during the 1930s. We’re not anywhere near that. And bank after bank failed. So far, about two dozen of the 8,500 banks in the United States have failed, and the depositors have all been protected. Small local banks are pretty healthy. So I am predicting a 17th recovery, although I’m not sure when. No one knows, so you just have to push ahead.”

Mesaros suggested that this is a particularly good time to approach possible donors about long-term philanthropy — estate planning or gifts that don’t materialize until the donor dies. “A donor’s future commitment to give a gift is likely to be worth a lot more when it is received than it is worth today,” he said.

Further, dividing a significant gift into a four- or five-year commitment may be more workable for the donor than giving the entire amount all at once. And rather than stretching out, say, a $1 million gift in equal payments over four years, it might be smart in this economy to suggest $100,000 the first year, $200,000 the second year, $300,000 the third year, and $400,000 the last year. “It still adds up to a $1 million commitment to the organization, but the donor can ride the wave of recovery,” he said.

Mesaros advises his clients to determine their top 50 or 100 donors, depending on the size of the organization, and develop personal relationships with them or build on relationships that have already been developed. “These are people who could really make a difference in the organization’s future,” he said. “Talk with those elite donors at least once a month — not asking for a gift, but simply communicating with them about the challenges you’re facing, how you’re meeting those challenges, and also sharing good news. Pick up the phone, suggest a cup of coffee, plan a little event — perhaps an informal, but structured, luncheon with four or five donors at a time.” That doesn’t mean ignoring the other donors on your list, of course. He suggested reaching that group through newsletters, e-blasts, direct mail, and similar methods.

“It’s not rocket science,” he continued. “It’s all about people and relationships. Most donors give to five or more organizations, so you can almost count on the fact that your competitors are communicating with these top donors. And you don’t want to fall off their list.”

Despite his advice to continue moving forward with philanthropic efforts, Mesaros conceded that this might not be the best time to launch a major fundraising campaign. Nevertheless, that’s exactly what Wesley Enhanced Living (WEL) has done on behalf of Evangelical Manor, its flagship community in northeast Philadelphia.

Revitalizing Evangelical Manor
Evangelical Manor was WEL’s first CCRC and has been serving northeast Philadelphia for 80 years. It represents WEL’s roots and the core of its mission. And because of the Manor’s success and strong balance sheet over the years, WEL was able to acquire other communities. Other than a minor facelift in the 1980s, however, the Manor has not been renovated since the 1950s and was in dire need of revitalization from a physical plant perspective, according to Dawn George, Vice President of Wesley Enhanced Living.

“In the recent past, we’ve done several renovation projects in our other CCRC communities,” she said, “but we’re thrilled about this project. The residents of Evangelical Manor deserve a much more modern place in which to live.”

WEL’s $23.1 million construction project involves completely renovating the 120-bed skilled nursing component of the CCRC, integrating a neighborhood care concept, creating open dining and modernizing the rooms. Northeast Philadelphia is a tight-knit community comprised of a deep-rooted group of neighborhoods where many residents live their entire lives. Integrating the neighborhood concept into skilled nursing care should be a particularly good fit.

Fortunately, the bulk of the financing for the project was in place before the bottom fell out of the market. That financing includes $20 million in privately financed tax-exempt bonds through Citizens Bank, WEL’s primary banking relationship, and a $3.1 million capital campaign, which is pure fundraising — a blend of bequests, planned giving, foundation support and individual gifts.

“Planning for the fundraising began about three and a half years ago,” said George. “We were in the ‘quiet’ phase, or ‘leadership gift’ phase, for the last two years and raised $2.1 million. The textbook on capital campaign financing recommends that you secure approximately 50% of your total in leadership gifts before reaching out to the public. So in October 2008, we launched the ‘public’ side of the campaign to raise the remaining $1 million.” The launch of the public fundraising effort coincided with the start of construction — which provided a positive public relations hook. It also coincided with the beginning of the economic meltdown.

Grass-roots efforts
“While we will continually evaluate our strategies to see what will be most effective in this economy, I’ve always viewed a grass-roots campaign on the public side as essential to the success of the overall campaign — and particularly in this area,” said George. “This is a modest community. The potential donor base includes hard-working, primarily blue collar, faith-based people who may have given to their church, school, or national charities but may not have ever participated in giving to a capital campaign. So it’s very grass roots.”

Maximizing the visibility of Evangelical Manor residents is key among the fundraising strategies that she is employing to reach local donors. The resident council has taken a leadership role in the effort, including interviewing most of its members and rolling out ads featuring their profiles in the newspaper that most local people read regularly. “We’re trying to put a face on who lives and works at the Manor,” George said. “The neighbors know most of the residents, so we’re saturating the media market in an effort to really tug at the local heartstrings.”

Borrowing from an acute-care fundraising technique, George is also reaching out to grateful families — people who have a loved one who currently lives at the Manor or who lived there in the past and, therefore, have an affinity to the community.

Then, she has embraced a rather fun concept to reach another donor constituency — 40- to 60-year-old women with some disposable income, in the middle-to-wealthy income bracket, who are familiar with the topic of caring for aging parents. “The ‘girlfriends’ idea is a hot concept among baby boomers,” George explained. “So we’ve organized a reasonably priced ‘girl’s night out’ themed event for about 150 women in order to get them interested in Evangelical Manor’s capital campaign. It will be held at one of the lovely boathouses on the Schuylkill River in Philadelphia, which will be a real treat for anyone who otherwise couldn’t get to go there.” In addition to cocktails and hors d’oeuvres, the evening will include an armchair conversation with Pennsylvania’s Secretary of Public Welfare.

And to bring attention to the campaign’s direct mailings and involve recipients in both the project and the mailings, George devised a puzzle concept. “We’re doing a 12-mailing campaign over 20 months to local residents, people with power of attorney over residents of the Manor, grateful families, and surrounding businesses,” she explained. “Each mailing includes a message with an update of the construction project and a few pieces of a 30-piece magnetic puzzle.”

One section of the puzzle says, “I made my gift.” And while the recipient can make a gift at any point during the campaign, the puzzle can’t be completed without that “I made my gift” piece. “We feel this will help the residents and their families follow the progress of the construction and want to become stakeholders,” she suggested. “We think our puzzle concept transcends the fact that they’re being asked to give money. And we also hope that they will feel that they can make a big impact with a small donation. The public phase of the campaign really is about small donations. While we’re always happy to accept large gifts, we’re well aware that this group probably doesn’t include any big donors.”

Building WEL’s fundraising component
WEL has been around since 1888, but the organization never depended much on fundraising until recently. As a result, it doesn’t have a built-in culture accustomed to making charitable gifts. In fact, this current effort is the organization’s first capital campaign in its 120-year history.

“We’re in the process of building the fundraising component of the organization,” said George. “There’s nothing like a capital campaign to do that, but it’s really hard to do a capital campaign without a long list of people who have already given to the organization. That’s why our strategies must be incredibly creative and unique.”

To come up with some ideas, WEL organized focus groups to get feedback on the look of its campaign marketing materials and the messages they deliver. “We use a lot of red, white and blue,” said George, “and we include people’s faces. We intentionally use phrases such as ‘building the fabric of community’ and words such as ‘transforming’ and ‘revitalizing’ the community so that people understand that Evangelical Manor is home to people who still contribute to society and are enjoying a worthwhile day-to-day existence. There’s vitality and wisdom inside this community that people in the surrounding neighborhoods need to know and care about. That’s really what our messages communicate.” In addition to meeting or surpassing the $3.1 million goal and having hundreds of donors, the true test of success will be sustaining a certain portion of the donor base.

“We really are trying to generate a lot of attention and good will through this project,” she said. “The last thing we wanted to do was transfer the burden of these construction costs into higher fees or monthly charges for our residents. And we’re not doing that at all.”