Why the collapse of Freddie and Fannie scares fundraisers

A lot of people are being hurt by the collapse of Freddie Mac and Fannie Mae. As a fundraiser, I can't help but focus on the philanthropic implications. During a press conference describing the takeover, the government said it "will review the charitable activities."

That doesn't sound like good news...

Cuts in giving to the groups Freddie and Fannie supported will have major ripple effects. Let's consider this description from the Washington Post:

By its account, Freddie Mac, along with its foundation, has invested more than $348 million in the community to date. Last year its annual Hoops for the Homeless campaign, a celebrity-studded basketball tournament to fight family homelessness, raised $900,000 for six local nonprofits that included Hannah House and So Others Might Eat.

Last year Fannie Mae dissolved its foundation -- an organization that has put more than $1 billion into education, affordable housing, education and economic development programs since 1979. The company said its philanthropic activities would be handled in-house, and it continued to give to local organization and initiatives. Among its 2007 programs, the company pledged $10 million to improve infrastructure in D.C. schools and $1 million in grants to help revitalize D.C. neighborhoods. Its annual Help the Homeless walkathon raised more than $7 million last year to support 175 local homeless service providers, such as Reston Interfaith, last year."

Some of you may remember that the embattled mortgage giants came under fire this past summer for making sizeable contributions to Jesse Jackson's Rainbow/PUSH Coalition and Citizenship Education Fund Annual Conference.

According to the conference program, obtained by an NLPC staff member who attended the event, Freddie Mac, as a “Platinum Sponsor,” paid $150,000. Fannie Mae paid $100,000 to be listed as a “Diamond Sponsor.”

Combined these guys also gave almost $2 million in contributions to politicians during the 2006 election cycle.

I mean... Freddie Mac was recognized by the Washington Business Journal and Greater D.C. Cares as the top corporate philanthropist in the Washington region.

Do you understand how big this is?

A fellow fundraiser once told me that the only news worse than hearing that a major donor has been indicted is that a major donor has declared bankruptcy. Trust me. I have experience with this one... it's not always easy making a bankrupt corporate donor make good on a charitable pledge.

McCain's major donor tips off VP pick early

As the political world waits to hear who McCain will pick for his VP... it appeared that much discussed front-runners like Pawlenty and Romney were out. After initial reports showed that Alaska Gov. Sarah Palin was still in Alaska, some reporters thought she wouldn't be at the big high noon rally in Dayton, Ohio.

But then... reports surfaced of a second plane from Alaska to Dayton... and who owns that second plane? None other than Clay Lacy.

Major donors always ruin everything...

UPDATE: Political junkies may enjoy this article I found from earlier this year "Sparks Fly Over Palin Fundraising Role,"

You can protect a lot of liberties for $335 million

Tonight in New York City, the caped crusaders over at the ACLU announced the public phase of the largest fundraising campaign on behalf of civil rights and liberties in American history. According to the group's press release:

"The $335 million "Leading Freedom Forward: The ACLU Campaign for the Future" is an unprecedented effort to build the organization's infrastructure by increasing funding to key state affiliates nationwide, dramatically enhancing advocacy capabilities and securing the ACLU's financial future for generations to come."

The group already has raised more than 2/3 of the money:

"The campaign has already raised more than $258 million - over $102 million in cash and pledges and $156 million in planned gifts - highlighted by 21 contributions of $1 million or more from the ACLU's staunchest supporters and several of the world's most noted philanthropists. These include two gifts of$12 million, one from George Soros, through his Open Society Institute, and one from the Sandler Foundation. Other leadership contributors include the Leon Levy Foundation, which donated $5 million, and Delaney and her husband,Wayne Jordan, who donated $4 million."

Personally, I've always thought capital campaigns got to cheat by waiting until they've almost raised all the money before announcing the actual number of the goal. How many annual fund directors are allowed to get 2/3 of the way through their fundraising drive before acknowledging the actual number goal.

What impresses me (and I'm sure other donors) about this press release is the bold commitment outlined in regards to how the money will be spent to achieve growth goals.

"A major goal of the campaign is to substantially increase the ACLU's presence and effectiveness from coast to coast by significantly increasing the programmatic and institutional capacity of its affiliates, particularly instates where civil liberties violations are most egregious and opportunities for change most promising. These states include Florida, Texas, New Mexico,Montana, Mississippi, Michigan, Missouri, and Tennessee.

Moreover, smaller affiliates located mainly in the South and in the country's heartland will be bolstered by increased resources that will enable them to hire full-time attorneys, launch new advocacy programs, and expand communications and public education initiatives."

While the ACLU was making this fundraising promise to donors in New York City, the organization was also hosting a huge membership conference for donors in Washington, DC.

Pretty impressive.

Major donor fundraising metrics

Holly Hall's article on how major donor fundraising metrics has been racing around listserves and development offices for the past three weeks.

The article describes performance metrics being used by Development Directors to evaluate whether staff are doing their jobs... and raising serious money as effectively as possible..

When Paul Keenan first took a job soliciting big gifts for charity, his supervisor asked him and his colleagues to prepare monthly reports, listing all their contacts with potential donors, and whether they were calls, letters, or visits.

"It was controversial - people resented it because they were professionals and felt they could be trusted," says Mr. Keenan, now an associate dean of development at Harvard University. "They also felt it was overly bureaucratic."

Now, more than a decade later, such attitudes seem quaint. More and more charities are adopting sophisticated systems to monitor and assess the performance of staff members who solicit big gifts from wealthy people. The evaluation systems hold fund raisers to exacting requirements for the number of donors they visit, how such visits are reported, the amount of dollars raised, and the percentage of solicitations that result in a donation.

Such efforts can help fund raisers bring in more money, according to researchers. A 2006 study of nearly 600 college and university fund raisers who solicit big gifts found that those who raise the most work for institutions that are more systematic in tracking and applying performance measures.

Of all the different fundraising roles I've played, I've never had an opportunity to look a donor in the eye and ask for a gift over $100,000. I think that would be fun.

It's an excellent article about how the experts at the Mayo Foundation, Boys & Girls Club of America, Nature Conservancy, Alzheimer's Association and others do it. Go here to read more.