The FORGE story dominated many of my blog posts from December of last year. It was the first time that the Tactical Philanthropy Community came together around a specific nonprofit. From the hours of pro bono consulting of Tactical Philanthropy reader Curtis Chang to the many, many comments from readers offering advice and constructive criticism to FORGE to the $50,000 anonymous grant from a Tactical Philanthropy reader that closed FORGE’s funding gap and helped set them on the path to restructuring their fundraising program, I’m still in awe over the generosity of the Tactical Philanthropy Community.
So I was thrilled to see that the Wall Street Journal included the FORGE story yesterday in a special section on how for-profits and nonprofits are working to survive the financial crisis. In the article titled Helping Themselves, Wall Street Journal reporter Shelly Banjo profiled a number of nonprofits that are thinking creatively in an effort to survive:
It isn’t just the economy that’s battering nonprofits. Many have been victims of recent financial scandals, and several have had to shut their doors as a result.
That has eroded trust among donors, and the only way to regain that trust is for nonprofits to be open about their finances, operations and policies, says Sean Stannard-Stockton, principal and director of tactical philanthropy at Ensemble Capital Management LLC of Burlingame, Calif.
Mr. Stannard-Stockton points to Forge, a nonprofit that implements community-development projects — such as building libraries and schools, running job-training programs and facilitating microloans to farmers — for refugees in Africa.
Forge hasn’t been caught up in the recent financial scandals, but it encountered other difficulties. Forge started out sending students, each of whom committed to raise $5,000, to work with the refugees. But in 2007, the organization eliminated the volunteers and instead employed the refugees themselves to design and lead the projects. That also eliminated a chunk of the organization’s revenue stream just as Forge was losing other donations amid the economic downturn, leaving it to face a $100,000 budget shortfall for 2008.
In response, Forge founder Kjerstin Erickson began blogging about her mistakes and Forge’s situation on socialedge.org, an online community for entrepreneurs, nonprofit professionals and philanthropists to discuss approaches and solutions to social problems. She began by telling her story and unveiling her financial records to the public, down to details including staff salaries and budgets.
Within days, bloggers, nonprofit consultants, foundations and donors caught wind of the story and began asking more questions and offering suggestions. Some readers stepped up to offer Ms. Erickson free consulting help, and a foundation followed with a $50,000 donation. Eventually, increased donations erased Forge’s budget gap.
"Public confidence goes up, not down, when people quickly and honestly admit their mistakes and explain how they are going to move forward," says Mr. Stannard-Stockton, who picked up Forge’s story on his own blog.
Philanthropy experts warn that nonprofits can’t rely on transparency to bail them out of a financial crisis. "Transparency isn’t a tactic you use to fund-raise, it’s a value for your organization to adopt," Mr. Stannard-Stockton says. But it does build trust and understanding among donors, making them more likely to continue giving.
You can read the full article, which profiles a number of efforts, here.
Thanks to all of you that helped FORGE help themselves!