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
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?
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.
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.