By Lynn Sygiel, editor, Charitable Advisors
The warning signs were out there, the
proverbial perfect storm brewing on the horizon. And Cayla Rosine, the vice
president of finance and operations at Joy’s House in Indianapolis, was
worried.
“We were drawing on our line of credit, and
we’ve never done that before. This was serious,” said Rosine of a critical
juncture last summer when Joy’s House found itself staring at a potential
shortfall that threatened to shutter the organization just as it was
approaching its 20th anniversary.
Joy’s House provides caregiver services for
adults with life-altering diagnoses and like many nonprofits, relies on
donations and traditional government funding sources. When those funding
streams change quickly for the worse, nonprofits and social enterprises
generally lack the extra funds on hand to make up the difference. Unlike
traditional businesses, it’s hard for a small nonprofit to develop a rainy-day
fund when donors and investors expect most of the money to go toward
programming.
Joy’s House accepts Aged and Disabled
(A&D) Medicaid waivers, the CHOICE program and long-term care insurance.
But changes in Medicaid reimbursements, state funding and declines in donations
put Joy’s House in a financial bind.
The
potential shortfall, however, is only part of the Joy’s House story. The organization’s proactive approach
and what it learned about itself and the community offers ideas for other
nonprofits seeking to avert a crisis.
Rosine has worked at Joy’s House for 21/2 years and
knows what it takes to run the organization: about $1.5 million a year. When
the financial picture darkened, she had a hard conversation with Joy’s House founder
and CEO/president Tina McIntosh.
The Joy’s House board was hoping things would
get better based, Rosine said, on 2018 being better than 2017. Joy’s
House has two sites, one in Broad Ripple on the Northside that opened in 2000,
and a Southside center that opened in 2014 near the University of Indianapolis.
Joy’s House isn’t unlike many human services
nonprofits facing financial challenges. Government contracts have not kept up
with the cost of services. Many nonprofits reporting receiving roughly 70
percent of direct program costs, according to a 2018 report commissioned by the
Alliance for Strong Families and Communities. Nearly one in eight organizations
have liabilities that exceed their total assets.
Sarah Shadday, the center’s outreach
coordinator, said
according to AARP, Indiana ranks
46th in the nation when it comes to Medicaid and state-funded
spending. The state also
ranks 51st for
long-term services and supports.
“Our society in
general does a really poor job of caring for our aging adults. We’re not
respecting the amazing people they are now, and the amazing things they have
done with their lives. We have people here who have birthed 12 children, we
have Ryan White’s primary care physician in this house right now. Just to cast
them aside because of a diagnosis. It’s asking a really hard question of the
community,” she said.
Earlier this year, Joy’s House already had made
some tough decisions. It reduced staff and eliminated its WIBC radio show,
“Caregiver Crossing,” which was transitioned as a podcast in August.
Unfortunately, the Joy’s House board realized,
those cost-cutting measures weren’t enough and in late summer, the decision was
made to start a critical fundraising campaign, a somewhat unusual move for a
nonprofit.
“Tina (McIntosh) would talk about how when they were thinking about the
idea of the critical fundraising campaign, she Googled it. There’s nothing out
there. Nonprofits just don’t do the critical,” said Shadday.
“The decision to launch this campaign was not
made lightly. A critical campaign is not something you can do multiple times in
your organization’s existence; it was a one-time shot. It was a pivotal time
for Joy’s House and the campaign would help make it or break it,” said board
treasurer Lisa Curry, who is a director in
Katz, Sapper & Miller’s Healthcare Resources Group, an
Indianapolis-based accounting firm.
Board
chair Corrine Walter said the board saw the incremental challenges facing the
organization and asked three critical questions: Are we needed? Should it be us
providing this service? Do people care?
The
campaign was covered by local media and in September, the center launched a
fundraising campaign. In multiple stories in the local press, headlines painted
a bleak picture if the organization didn’t generate the necessary community
support.
Stories that appeared in local media in the
fall
IBJ: Broad
Ripple not-for-profit launches emergency fundraising campaign
RTV 6: Money woes could
force Joy’s House to close after 20 years
Indy Star: Joy’s
House helps Charlene stay at home. It could close and send her into a nursing
home.
Fox 59: Broad
Ripple nonprofit needs to raise $559K to avoid closing
WISH: Broad
Ripple nonprofit facing closure after 20 years
RTV6: Joy’s
House receives $100,000 donation, inches closer to monetary goal to keep doors
open
The response
and results were overwhelming.
While the campaign’s goal was $559,000, Shadday said by the organization’s 20th
anniversary on Nov. 1, it had actually raised $720,000, and that figure is
still growing. But she said more importantly, it provided validation.
“In a typical year we have 700 to 800 donors,
which include foundations, donors and individual gifts from people. And in this
eight-week time frame, we had over 1,000 donors and half of them were brand
new,” she said.
Rosine said she hadn’t seen so much activity
that saw even neighbors stepping up.
“There’s
a church nearby that called and said, ‘You’re our neighbor. We cannot let this
happen.’ The church members took up a special collection and sent a check. It
was overwhelming in a good way. It made us emotional at times to see that
people do care,” she said.
Shadday
had a similar story. After an article ran in The Indianapolis Star, an
Eastside woman drove to Broad Ripple and announced her desire to help the effort.
The center’s senior vice president of care services happened to be covering the
front desk for the receptionist and talked with the woman who shared how much
the organization’s mission spoke to her.
“When
the woman left, they opened the envelope and found $1,000 in cash. This woman
had never heard of Joy’s House, 24 hours before,” she said.
While the nonprofit has utilized social media, they
witnessed its power and ripple effect. They also saw caregivers who already had
so much on their plate become part of the army that spread the word.
While the campaign ran from Sept. 1 to Nov. 1, the Joy’s
House lobby became a bit of a merchandise center. One local donor, Best Boy & Co., provided jars of whole grain mustard for Joy’s House to
sell onsite, and the company sold it in other area retail shops to benefit the
campaign. Another donor, Wood Warbler
Coffee, provided 50 percent of the proceeds of
coffee sold both at Joy’s House and online. There were other in-kind donations as
well and local restaurants that provided a percentage of the day’s total sales
to benefit the nonprofit.
As board chair, Walter, who is an
assistant vice president at Capital Group, saw a positive community
response to its internal questions.
“Our answers to those (internal) questions
were all ‘Yes,’” she said.
But it did more than that.
“The critical campaign was a means to shine a
light on needs within our aging population, needs for those with a variety of
diagnoses, and we wholeheartedly found out the community also said ‘Yes,’” Walter
said. “They said ‘Yes’ in their words and in their incredible financial
support. We cannot thank our community enough for their support during this
campaign for the many years to come.”
According to Rosine, some of the campaign funds
eliminated the center’s line-of-credit debt and got the checking account up to
60 days operating and beyond. Additionally, after a board vote this month, a
portion will be set aside as a board-advised fund.
“We’ll
have an endowment light. We won’t touch the principal balance unless we
absolutely have to, and we’ll have to go through the board for that approval.
It’s kind of an emergency fund, if you will, but also the interest that we can
generate on that will help us with our direct cost variable, so we have (dollars)
to keep the lights on, heat on, things like that that don’t change whether
we’re doing well financially or not. That’s the intention for those funds.”
McIntosh, who began a medical leave as the campaign wrapped up, wrote in a blog post: “This campaign has opened up conversations that needed to happen – about partnerships, opportunities, and how to do things better, not just at Joy’s House, but in our city and state. We are excited for the possibilities that will come in the near future. And we are grateful for the team that is being assembled to look at long-term sustainability for Joy’s House.”
What will change?
In Kim Klein’s
book, Fundraising in Times of Crisis, she explains that an
organization can survive a time of crisis, and even grow, if it addresses the
changes that need to be made while not sacrificing its mission. The tendency for most nonprofit
organizations is to determine how to cut corners rather than how to raise more
money. She encourages the implementation of diverse fundraising techniques as
the solution.
So, what are
the changes are on the horizon?
Improve marketing
For the past
seven years, a large portion of the center’s marketing budget went toward
producing the radio program. Transitioning that to a website-based podcast
significantly reduced the cost, and going forward, it will refocus it. Some of its
marketing budget will be for referral marketing to ensure the centers are at
capacity.
“We really want to get the word out about what
we do so that people will know we’re here, which leads to assessments and leads
to guests,” said Sarah Shadday, Joy’s
House outreach coordinator. “For me, it’s making it strong referral
marketing and strong community outreach.”
“Part of what this campaign did and will
continue to do is really is kick us in the butt a little bit about marketing –
what is important, what are the best practices and how do we keep this campaign
momentum that put us in front of all these people who had never even heard of
Joy’s House.”
Tell a more relatable story
There is a perception that most of the
nonprofit’s clients have dementia. Part of the work is to change that
stereotype. In reality, the nonprofit hosts clients who cannot stay home alone
because of health and safety concerns. While some are living with dementia,
others have multiple sclerosis, Parkinson’s disease, are stroke patients or have
other medical challenges.
“We are an adult-care facility. We have guests
in their 20s and 30s. Yes, it’s your mom with dementia, but it’s also your
brother with a traumatic brain injury or his sister with autism or an aunt with
Down syndrome. So really highlighting those individual stories to show that
we’re relatable,” said Shadday.
Ongoing fundraising
One of the things learned is that donors need
to be cultivated on an ongoing basis. Getting the donors is part of the effort,
but donor retention requires long-term engagement.
“We have to be
really careful of making sure that people don’t see that campaign as the end
all and be all. ‘Oh, now we’re great.’
The campaign helped us to continue, and in continuing, we need your
help,” said Shadday.
“This might sound silly, but if we don’t ask
people to help us, then they’re not going to. They’re not going to know that we
need their support for this important work. I know that sounds really basic,
but I feel like in the last few months, we had done so much better at just
saying, ‘Hey, remember us, we want to still be here.’ Not in a critical
campaign fundraising way, but in a more sustainable ongoing,” said Cayla Rosine, the vice president of finance
and operations.
Develop network of other adult day cares
In 2014, the National Adult Day Services
Association (NADSA) identified 5,685 day programs operating in the United
States, up from 4,601 in 2010. This rapid growth is based on the increasing
number of people who are getting older and require community-based solutions.
Nearly 78% of these centers are operated on a nonprofit or public basis.
Joy’s House staff said other centers are not
the competition and see banding together to support each other’s efforts. To
that end, they have just started an internal discussion.
“These are our friends, how do we work together
to make each other better?” said Rosine.