Finances at ‘turning point’ for LGBT groups, stabilizing; but donors fleeing

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By: Chuck Colbert /TRT Reporter–
Good news and some concerns about the LGBT equality movement emerge from a new study by a LGBT think tank.

Finances of the nation’s leading LGBT organizations have stabilized following the recent economic downturn, and the overall financial health of the LGBT movement remains strong, the study found.

But fewer than three percent of LGBT adults contribute to national LGBT organizations; and the number of individual donors to LGBT groups dropped 12 percent between 2009 and 2010, a continuing trend now for five years.

“Finding ways to reach the 97 percent of LGBT adults who do not give to [LGBT] organizations is becoming a more urgent priority,” said Ineke Mushovic, executive director of the Movement Advancement Project (MAP), which released the 20-page report in early December.

It is available at http://bit.ly/rOp3Mo.

Anti-Gay Opponents Largely Outspend LGBT Efforts  

The urgency to reach the 97 percent is underscored, she said, “given that our opponents have far greater resources.”

Consider one measure of LGBT detractors’ financial advantage: “The 10 largest anti-gay opponents spent almost three times as much ($330.4 million versus $126.8 million) as that of the 40 national LGBT organizations” participating in MAP’s 2011 National Movement Report, said Mushovic.

Focus on Family alone outspent the top 40 leading LGBT groups combined, according to MAP’s study.

In its analysis, MAP examined audited financial data from 40 leading organizations, 27 of which had budgets of more than $1 million and 13 others with smaller budgets, but whose work is “of critical concern to the LGBT movement.”

National & New England Ties

MAP’s study included leading national groups, for example, the Gay & Lesbian Alliance Against Defamation (GLAAD), Gay and Straight Education Network (GLSEN), the Human Rights Campaign (HRC), Lambda Legal, the National Center for Lesbian Rights, Out & Equal Workplace Advocates, the Point Foundation, and the Task Force.

Three groups with regional ties to New England were also included in MAP’s study. They are Gay & Lesbian Advocates & DefendersMassEquality, and the Family Equality Council.

An independent think tank based in Denver, the Movement Advancement Project seeks “to provide independent and rigorous research, insight, and analysis that help speed full equality for LGBT people.”

Fourteen foundations and individual philanthropists provided funding for MAP’s recent study, including Arcus Foundation, David Geffen Foundation, Gill Foundation, and Jim Hormel, among others.

Other key findings

Not only did fewer individuals contribute to LGBT groups, but also donors’ total contributions fell by 14 percent (or $9.4 million), raising concerns because those contributions make up the largest source — 35 percent — of organizational revenue.

Foundation contributions also dropped slightly by $400,000 or two percent.

So much for the worrisome findings, here is the upside from the report:

Corporate contributions helped to offset the overall revenue shortfall with increased giving — up $1.8 million, a 41 percent increase. Additionally, bequests increased $1.6 million, a 30 percent increase. In-kind contributions rose by $3.5 million, or 12 percent. Fundraising event revenues also rose $1.1 million, a six percent increase.

And other income sources went up $3.2 million, a 126 percent rise.

Most of the revenue spent by national organizations went to programs — 79 percent, with ten percent going to management, and 11 percent spent on fundraising. In terms of fundraising efficiency, those percentages surpass benchmarks set by the American Institute of Philanthropy and Better Business Bureau Wise Giving Alliance.

More good news

After a sharp 25 percent decline in revenue from 2008 to 2009, the finances of organizations working to advance LGBT equality stabilized in 2010.

Altogether, the 40 LGBT non-profits increased their combined cash and in-kind revenue by one percent between 2009 and 2010 — up from $163 million to $164 million — and spent all but $4.6 million of that revenue.

In other words, combined 2010 revenue surpassed expenses by $4.6 million, a reversal from 2009 when expenses exceeded revenues by nearly the same figure.

LGBT movement ‘stabilizing’

“While [LGBT groups] continued to cut expenses in 2010, they also saw a slight increase in 2010 revenue and are projecting expense budget increases [13 percent] for 2011,” the report states, adding, “This suggests the LGBT movement may at a turning point, or at least stabilizing after seeing large drops in expenses and revenues over the last three years, mostly related to the economic downturn.”

Leaders from the Boston-based organizations included in MAP’s study agree with the report’s suggestion.

MassEquality

“The report reflects that organizations are growing again,” said Kara Suffredini, executive director of MassEquality, a statewide advocacy organization. “That’s pretty extraordinary because we are not yet out of the economic down turn, and yet this particular sector of the non-profit sector is continuing to grow.”

While organizations in the report rely on donors’ contributions for 35 percent of their revenue, “more than half of MassEquality’s revenue sources come from individual donors,” Suffredini said.

Fortunately, “Our donor-retention rates of more than 90 percent over the past couple of years have far exceeded industry standards,” she said.

The MAP report showed an average donor-turnover rate of 48 percent. The flip side is a donor-retention rate of 52 percent.

What excites and attracts donors to MassEquality, said Suffredini, “is the synergy we have between the education we do to move the policy work” combined with “an electoral arm that rewards people who advance the policy and take out those who don’t.”

“Our donors tend to be people who are very interested in the political side and interested in the holistic approach to advancing equality” from cradle to grave,” she said.

MassEquality has a full-time staff of eight, with one opening that the organization is hiring to fill.

MassEquality’s fiscal year runs from Oct. 1 through Sept. 30.  For the fiscal year ending September 2011, the organization’s Form 990s will reflect that MassEquality.org, a non- tax-deductible entity (501C4), earned $615,196 in revenues, with net assets of $224,277.

For the same time period, the MassEquality Education Fund, a tax-deductible entity (501C3), brought in $492,420 in revenues, with net assets of $170,692.

The numbers reported include only actual dollars received and not in-kind revenues.

GLAD

MAP’s findings also ring true for Lee Swislow, executive director of Gay & Lesbian Advocates & Defenders, GLAD. “In terms of the larger trend, dropping in revenue for 2008, cutting expenses and budgets in 2009, that was certainly our experience because of the economy,” she said.

“I definitely have been able to see an increase in our support over 2010 and 2011,” Swislow added.

“It’s not easy. We work very hard for every donation and like so many other LGBT organizations rely on private money for our funding. The economy is definitely having an impact,” she said.

And yet, “We have been able to identify new donors. We have to do [so] because there are people who have donated for years, but now simply don’t have the resources,” she said.

Swislow said GLAD’s donor-retention rate is the same range as MAP’s average for all LGBT groups.

Corporate support has increased. “But what we see at our Spirit of Justice dinner in terms of donations that night, we’re seeing smaller gifts than in other years,” said Swislow.

“There is more participation, more people are giving but the average gift has gone down somewhat,” she said.

A regional LGBT legal-rights organization, GLAD’s 30-year track record in successful litigation motivates donors, said Swislow.

“If people know about the work we are doing, many will be interested in investing in our work because we know from the donors that we have people think we are an incredibly good investment,” she said.

GLAD’s total net assets as of March 31, 2011 (from the organization’s latest audit and Form 990) were $2,176,361, with an unrestricted portion of $1,492, 459 and the balance of $683, 902 temporarily restricted. GLAD has a full time staff of 29 people.

Family Equality Council

Meanwhile, at the Family Equality Council  “revenues have increased and we are bucking the trend,” said Jennifer Chrisler, executive director.

“We’ve seen in 2008 every organization struggled when the economy was so volatile,” she said. “We were challenged with fundraising but only to the extent that we have to conserve not dramatically reduce.”

“We have grown considerably from 2008 to today,” Chrisler said. Family Equality Council now has 16 full-time employees, she said, having added three new staff positions in 2011 and two in the previous year.

A leading policy advocacy organization for LGBT parents and children, Family Equality Council’s audited financials for the year 2010 show total revenue at $2.3 million, with net assets at $776, 532.

Donors are motivated to contribute to the organization, said Chrisler by three issues they care most about — securing the parent/ child legal relationship; making sure their relationships are legitimized through marriage, civil unions, or domestic partnerships; and keeping schools safe for children.

Overall, Chrisler was not surprised with the MAP’s findings that LGBT organizations’ finances are stabilizing. “The numbers of people giving in the movement,” she said, “sad but true.”

“This is where we could spend some energy in helping our community understand why supporting [movement] work is really so vital,” said Chrisler.

What she has in mind is how the United Way promotes giving through a public education campaign. As Chrisler explained, “It’s the idea that if you give to the United Way, you are giving back to the community. That has been the whole thrust of that campaign. There is something to be said for the fact that we as a movement could do a better job of getting out of our silos and say, ‘Just give to the movement’ and not get hung up on which part of the movement you are giving to.”

 

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