Technology Meltdown Leaves Important Lessons for Fundraisers

Investors weren't the only victims when the 'dot.com' bubble burst. Charities who received substantial grants from equipment makers, service providers and other high tech players were also hit hard by the industry's downturn.

BIG News talked to a couple of organizations that received large grants from just one high tech heavyweight, Lucent Technologies, to find out how well they've adapted to changing circumstances.

"We had become very accustomed to them being clearly on board," laments Elaine Schuster, CEO of the Golden Apple Foundation, a Chicago-based promoter of teacher excellence. Specifically, Lucent helped Golden Apple with a $50,000 grant to offset production costs for its annual teaching awards television show.

Last year Lucent cut its grant to Golden Apple by half - and they're not the only high technology backer that has cut funding recently. "That hits your bottom line at the end of the year."

Schuster says she could see what was "blowing in the wind" a couple of years back, when the high tech market first began to meltdown. Expecting that this would impact on their revenue, Golden Apple's Board of Directors approved the hiring of an outside development consultant to review the organization's entire fundraising strategy.

For the past 18 years, notes Schuster, Golden Apple has been reliant on a few select, "Chicago-centred corporations and foundations" as well as a small host of private and corporate donors. She adds that Golden Apple was also reliant on money from the state to support programs that encourage and prepare young people to become teachers.

"The consultant made it very clear to us that he felt we should be cautious about staying as dependent as we were on the same pool of funders." He also reminded Golden Apple that corporate and foundation giving would be down this year and that state money would also be cut.

As a result of this review, one of the new areas of focus at Golden Apple is on partnerships. "More and more funders are asking: 'who are you working with, who are your partners, who are you networked with?'

Golden Apple, she notes, has a very valuable asset in the form of its wide network of outstanding teachers. Lately she's seen more willingness on the part of universities to exploit that network and "work with us" on both program development and fundraising.

She adds that Golden Apple is currently working with a group of independent colleges and universities to create, "a whole set of alternative (teacher) certification models."

Schuster believes that part of Golden Apple's strength as a partner comes from its ability to execute more quickly than the larger bureaucratic institutions they typically work with. "We are smaller, more flexible and not bound by the same rules and regulations."

Broadening the Funding Base

For one organization that received a $150,000 grant from Lucent - but doesn't yet know what the future holds - expanding their funding base is the primary order of the day.

Paula Lawton-Bevington, Vice President of Development at Georgia's science and technology center, Scitrek, notes that her organization is, "branching beyond the strictly technology companies."

Although high tech companies will continue to be natural partners for Scitrek, the center is focused more closely these days on professional service firms like accountants, lawyers and bankers. These types of professions, she notes, have an instinctive appreciation of technology and - perhaps more importantly - they've almost always got money.

"Today the line between the tech company and the non-tech company is increasingly blurry. Every company uses technology and we're just trying to find those that have a little bit of surplus (money) and are ready to participate."


BIG Picture: The best time to diversify your funding base is when you've met all your targets for the year. Diversification will insulate your organization next time there is an unanticipated shock to the economy.

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