The NonProfit Times - June 1, 2008 - (Page 10)

KROC CENTER Continued from page 1 will be about 200,000 square feet on 33 acres and among the most expensive, at $72 million for construction costs and another $88 million for the endowment, with $50 million raised locally. A BILLION INTO MILLIONS MORE The Salvation Army’s four territories (Eastern, Central, Southern and Western) equally shared the $1.7 billion, but determined the endowment funds would not be enough so they established a process by which chapters could apply for funding. Communities would have to submit detailed business plans and grant proposals detailing the uniqueness of the center, how it would meet Kroc’s wish, and perhaps most importantly, address the sustainability issues of running the center, said Maj. George Hood, national commander of the Salvation Army. The process netted 99 applications within the Army’s four territories, and 30 were selected. With each territory receiving a quarter of the $1.7 billion (more than $400 million), they are responsible for raising more than $200 million. Of the five undetermined centers, Hood said it’s always a possibility that they might not raise enough money for the endowment,“but no one’s pushing the panic button right now.”There still is time to raise the appropriate funds, he said, which is why there’s no deadline. The best-case scenario for the centers might be five years, he added, but they could stretch to seven or eight years. And, the current turbulent economy might slow progress on some of the projects. “No one expected economic conditions that people are facing now,” Hood said.“We don’t know what’s going to happen to the economy, investments, people’s disposal income.”While some chapters got early enough starts and have been successful, he said others are still raising those funds before they can start any construction. Some have started the process and realized that they just couldn’t come up with the funds for a matching endowment. The endowment aspect of the gift has been a very difficult challenge, Hood said, which is why the business plans had to be well prepared and developed. “We’re making sure we’re not just raising money, but the outcome and sustainability of those centers; that’s so critical.” Three chapters (Aurora, Ill., Duluth, Minn. and St. Paul, Minn.) started the process but eventually came to the understanding that they just couldn’t raise the necessary funds, among other factors. When fundraising begins in a small or mid-sized community for $25 million to $30 million, there comes a stage when one can answer the question of whether it’s achievable or not. “If you can’t get that lead gift, and get an indication that it’s not doable, you need to stop,” Hood said, adding that it usually occurs in those smaller markets. ‘A FUNDRAISER’S DREAM’ A strong sustainability plan is critical for the centers, particularly in Philadelphia, said Chaz Watson, divisional director of de- velopment for the Eastern Pennsylvania and Delaware Division. Other high-profile civic projects have struggled to achieve major fundraising goals, he said, only to have difficulty in operating because there weren’t enough endowment dollars in place.“People don’t want to see that again in Philadelphia,” he said.“We don’t want to build something and not be able to sustain it. It’s all about access, quality service and delivery, that’s not compromised by skeletal staffing and underinvestment.” The challenge and opportunity Joan Kroc put to The Salvation Army through these centers and the “way she structured the gift has been very healthy” for the organization,Watson said.The campaigns are “teaching us to be even more rigorous in October,” complete construction by 2009 and open in early 2010. Philly is on a faster track than normal, with a typical campaign taking more like two years versus three,Watson said. MILLION-DOLLAR BREAKFAST Denny’s is known for its $2.99 Grand Slam Breakfast but the Grand Rapids, Salvation Army has its “million-dollar breakfast.” Joy Ross, the wife of Maj. Roger Ross of the Grand Rapids Kroc Center, cooked breakfast for three potential donors, making a presentation in a relaxed atmosphere and answering questions. Roger Ross was confident after the meeting that they could get a significant contribution, thought to be in the $20,000 The San Francisco Kroc Center, on the drawing board above, and in real time, right, will be the first to open later this month. In all, 30 community centers will be constructed as a result of Joan Kroc’s $1.7-billion bequest. But within eight months of starting the campaign last spring, Ross said the $10million goal had been reached -- thanks to fewer than 100 donors -- so the Army decided to go for $2.5 million more.They’re now at $10.8 million with another $2 to $3 million in outstanding asks, Ross said, and that’s only from the major gifts division. The community division will launch its share of the campaign when groundbreaking occurs in late September or early October. The Southwest Atlanta Ray and Joan Kroc Corps Community Center got a helping hand for its endowment as well as a head start.A training and seminary school located, adjacent to the planned facility, helped in the fundraising, as did the Southern Territory headquarters and state offices all located near Atlanta. Like San Francisco, Atlanta already had started on a campaign when the bequest was announced and was about 20 percent along the way. But the planned facility was to be much smaller, on the scale of $5 million as opposed to the $21-million Kroc Center.The Kroc funds enabled the Army to redesign the structure and address more needs in the neighborhood, Maj. Bert Tanner said, adding more literacy and job training programs as well as a performing arts component.The Kroc gift was the “catalyst to put together an increased statement to community,” he said. San Francisco changed direction when the Kroc gift was announced, having already launched a campaign, Maj. Joseph Posillico said. The Army had to convince donors of the need to raise an endowment despite a bequest of millions of dollars. With the capital side of the endowment all but wrapped up, he said the organization plans an ongoing campaign to secure the remaining $6 million for the operating endowment. “It’ll be one of the areas where we work with planned giving, major gifts, to continue to focus on this though not as big of a public push as we have last couple years,” he said. LAND COSTS, CHALLENGES Building in Chicago or San Francisco is going to be more expensive than in Dayton, Ohio, or Massena, N.Y., Hood said, so territories had to manage assets to the point that they determined within their territory, based on how much money they had to put into it. In San Francisco, the Army was able to use an existing building, Hood said, which is why it’s so far ahead of other centers. Boston has been very difficult in terms of land acquisition, he said, cobbling together 40 different parcels into one site. “When you get into Chicago and other major markets, land acquisition becomes very difficult,” said Hood. In Dayton, Ohio, a piece of land was wrapped around an old historic residential site and the Army was able acquire the entire piece. The historical building will be completely preserved and used as office space.“It was a very easy acquisition and there’s also added value to the community because of the historical Kroc Center, page 12 how we plan, not just for capital, but longterm sustainability in what we do.” These are definitely unprecedented times for The Salvation Army, said Watson, which is typically engaged in half-million to $3-million campaigns.These campaigns are $20 million, $30 million or more. “From a fundraising standpoint, a lead gift of $72 million toward an overall $118 million, including capital and endowment, is pretty incredible,” Watson said. “The Kroc gift has given us 65 cents of every dollar we need to accomplish that goal. That’s a fundraiser’s dream.” The Philadelphia center has raised more than $15 million and hopes to get to $20 million by the end of June and reach its goal of $36 million by year’s end. Of the $36 million goal, $20 million is for the endowment and $16 million for capital.“It’s a very aggressive schedule,” Watson said, and “if we stay on a fast-track, we’re hoping to pour the foundation by the end of to $30,000 range. Before the end of the day, Ross got a call from his major gifts chairman informing him that one of the couples had pledged $1 million. “They were not even on our radar for a major, substantial gift,” Ross said. His wife is now getting invitations to cook breakfast for other groups. With $15 million for construction from the Kroc gift, Grand Rapids had to raise at least $7.5 million for its share of the matching endowment, and with acquisition and site improvement costs, the total campaign was set for $10 million, said Ross. Originally, there was a concern whether the local Salvation Army could handle a $7.5-million campaign and compete among other ongoing campaigns. “We’ve not done a major campaign like this in 30 years, certainly nothing to the magnitude of this size,” Ross said, adding that other campaigns in the area ranged from $20 million to $30 million. JUNE 1, 2008 THE NONPROFIT TIMES www.nptimes.com http://www.nptimes.com

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The NonProfit Times - June 1, 2008 First Kroc Center Set To Open It’s Layoffs And A Lawsuit At ARC In The Twin Cities Hospices Put On Life Support Contents Who...When...Where...How...What? Idol Charities Still Waiting For Funds Heck Of A Job Play On Words Make Endowments Pay Donor Management Software Who’s Next? Joining The Masses Online Email Evangelism Three Corners Business Briefs Fiduciaries And The 990 Calendar United Way Refocusing On Programs, Reducing Affiliates NPT Jobs Resource Directory

The NonProfit Times - June 1, 2008

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