Training agency slashes government reliance: Not-for-profit turns to private donations for funding

March 7, 2005

Talk about a turnaround.

An Indianapolis not-for-profit that once relied on government money to pay for most of its programs has found a way to do what many others wish they could-diversify its revenue stream as public funding dries up.

In less than five years, work-force development agency Training Inc. has ended a decades-long dependence on government grants and contracts.

"We had to reinvent ourselves in order to survive," said former Director Joyce Duvall, who left this month after more than six years at the agency.

Private contributions and grants-from individuals, corporations, foundations and the United Way of Central Indiana-made up 94 percent of Training Inc.'s 2004 budget, the agency said, compared with 40 percent in 2000.

And that was without the benefit of a full-time fund raiser on staff. The organization hired a development director last fall, and its first rubber-chicken event is scheduled for March 10.

"It's pretty phenomenal," said Peggy Frame, who is adding the executive director's duties to her gig as training director in a cost-saving measure.

Not to mention inspirational. Charities of all kinds-and human-service agencies in particular-are always looking for more income-producing options.

"It's an absolute survival must," said Michael Howland, CEO of Indianapolisbased Noble of Indiana. "It's also a lot easier said than done. We would be happy to learn lessons from anyone who's done it."

Noble, which helps people with developmental disabilities, got a crash course in the subject last year as local officials looked for ways to balance the county budget. A $1 million appropriation for Noble was on the chopping block before intense lobbying paid off-literally and figuratively.

Without the local contribution, which represents about 9 percent of Noble's $11.5 million budget, the agency likely would have cut services.

The crisis underscored the importance of looking for other sources of funding, Howland said. All told, about half of Noble's revenue comes from government grants and contracts.

"Like any business, putting all your eggs in one basket is a very dangerous thing to do," he said. "The more diversified you are, the better off you are."

Still, raising more money in this stillrecovering economy isn't exactly a sure thing. So what's the secret?

Training Inc. credits a simple strategy: Do good work and then let folks know about it.

"People believe in what we're doing," said Duvall, the former director. "They like our outcomes, so they're helping us."

Indeed, the agency's story is compelling. As many as 200 unemployed or underemployed "trainees" go through one of its four job-readiness programs each year, completing an internship along the way. And 12 months after graduating, 84 percent of them are still working in better jobs than they had when they started.

Helping clients become self-sufficient, taxpaying members of society has real benefits, Duvall said. Training Inc. spent about $625,000 last year, and its annual "return on investment" summary estimates a 225-percent bang for the buck.

The study itself is evidence of how times are changing for charities. Finding new sources of funding means finding new ways to ask for help, said Kirsten Gronbjerg, who holds the Efroymson chair in philanthropy at Indiana University.

"They need to work to raise money," she said. "It's an additional investment."

But there's no getting around it.

"Government funding is much less predictable than it was 25 years ago," Gronbjerg said.

Training Inc. had a ready-made audience when it started singing its own praises-the 400-plus local businesses it works with through job-training programs each year.

Other not-for-profits may have a more difficult path. But many, like Noble, are forging ahead anyway.

"Hopefully we will be able to demonstrate social and economic benefit we bring to the community," said Howland, who took the helm of the organization in 2003-its 50th anniversary.

Despite the agency's age and accomplishments-it serves 2,500 children and adults each year-many people still don't know what it does, he said. "We've got a long way to go," Howland insisted.
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