How the Telluride Foundation Pulled Off a Record-Breaking Granting Cycle in the Midst of Worldwide Economic Decline

Despite a recession that is too easily compared to the Great Depression, the Telluride Foundation distributed $900,400 in community grants to nonprofits last month, bringing the Foundation’s 2008 grant award total to a record $1.8 million, distributed as community grants, throughout western Colorado.

Funds were distributed to an impressive 78 of the 81 groups that applied – a significant increase made all the more significant within its context of a current, nationwide financial decline that is hitting the nonprofit sector especially hard.

In the face of a “sharp increase in need for services,” observed Sharon Knight of the Colorado Nonprofit Association, in Denver, alongside “a huge decrease in earned income and contributions,” and the fact that many “funding foundations have lost anywhere from 20 to 50 percent in investment income,” the Telluride Foundation’s accomplishment is all the more remarkable. Quotes out

In 2008, the Telluride Foundation chose to focus 21 percent of its allocations on Early Childhood Development (ECD).

“While we fund the depth and breadth of Telluride, from land conservation to art-related programs, our focus has been Early Childhood Development,” observed Paul Major, president and CEO of the Foundation. “During the site visits which our granting committee makes to each of the applicants, they saw a dramatic need in early childhood issues.

“ECD is completely under resourced in Telluride,” said Major, “with so many families with both parents working. It is important for the health of the community and the family to have quality childcare.”

The Telluride Foundation has two programs directly related to ECD: Bright Futures Fund for Early Childhood and Families (operating under its own 501©3) and the www.telluridefoundation.org Telluride Economic Summit on Early Childhood Investment, an annual meeting produced in partnership with The Pew Charitable Trust, headquartered in Washington, D.C., which Major pronounced one of the “top five giving organizations in the county.”

The Foundation’s all-volunteer grants committee includes Ed Barlow, chairman Harmon Brown, Elaine Fischer, San Miguel and Ouray County Social Services Director Allan Gerstle, Trisha Maxon, Melanie Montoya, Brian O’Neill, George Parker, and Susan Saint-James (committee-members are pulled from the existing Foundation Board to serve for three years and the chairmanship is rotated every year). The grants committee puts in approximately 60 hours during the grants cycle in just reviewing the grants; members also travel to the edges of San Miguel County to conduct visits with staff and site walks of the facilities of various applicants.

Major estimated that over the past three years, grants committee members have visited over 90 percent of the organizations that have applied for funding.

“There is a huge commitment from the people who serve on this committee,” he said, itself an “antidote to reality” that is mirrored, he suggested, out in the field, where members’ commitment to the organization is buoyed by interaction “with people who are passionate and engaged in their work.”

The site visits’ main purpose, he explained, is “to make a connection between the money, the work and the people doing the work. To look them in the eye, see their challenges firsthand,” he said.

Knight echoed Major’s enthusiasm for trips into the field, pronouncing “the most important thing nonprofits can do is communicate with their funders however they can and at every opportunity,” because it offers recipients the chance to “communicate with their funders before deadlines” to “let them know, however they can, that they are providing services and doing the work.”

The Telluride Foundation approaches its allocations using well-established criteria for funding favoring organizations that provide documentation of a well-defined need and provide direct community support.

“Someone might have an idea they think it is charitable in nature,” he explained, “but there must be a demonstrable need – and community support.” The committee also looks for well-run organizations that can clearly show a diversified funding base, and for groups that can maximize their work with the Foundation’s contribution.

The grants committee goes on to ascertain the ratio between program expenses (delivering on the mission of the organization) and how much is spent on supporting the mission (fundraising and overhead) as a barometer of the organization’s overall health.

“This year, the grants committee seriously deliberated over each application,” said Board President Harmon Brown, in a Foundation press release, “in light of the economy.” The result: “The committee was hesitant to fund new or emerging programs, new staff or new equipment,”

At least one new organization, Squidshow Theatre, did receive funding. Ecstatic recipient Sasha Cucciniello described what the Foundation’s allocation to her organization does for her: “This funding allows us to show the town our work,” she said. “This solidifies my company’s mission. They validate what I do, and give me the boost that I need going forward.

“Now I can look forward to the future and grow.”

Even the head of a new organization that did not receive funding applauded the process as worthy of the time it took to get its “ducks in row.” The application process, she suggested, although unfruitful for 2008, has prepared them well for going after grant funding in the future.

When many nonprofit organizations around the country are either battening down the hatches, or worse, closing their doors how did the Foundation manage to raise more money than ever before, and create a record year?

Major put it simply: “We had a four-year fundraising plan and, in spite of the meltdown, we were able to stick to our plan.”

In 2004, the Foundation created a four-year plan calling for a 20 percent increase in donations for each year. Ultimately, its local and national pool of donors was able to meet those goals. Major credits the Foundation’s “generous” donors for the record-breaking year, but also the Foundation’s specific and realistic fundraising plan and its lean administration and operating structure for making it possible to raise the bar in a year with such dismal economic tidings.

The simplicity of the Foundation’s fund-raising approach and preparation for lean times became a platform for two workshops presented to the Telluride community at nonprofit “roundtables” in November and October.

“We wanted to introduce the idea that there is a new climate coming in 2009 and 2010,” Major said, which he described as “a perfect storm of individual donors taking a significant hit and donating much less [alongside] a dramatic decrease in government funding. Colorado alone has 600 million in budget cuts coming during their 2009 budgeting.”

As to the Foundation’s position, “We are in the same boat as everyone else,” said Major. “We rely 100 percent on individual donations” for the community grant distribution. “We don’t have endowments.”

The Foundation even cut $500,000 from this year’s budget in an attempt to absorb anticipated blows. “If we want to show Telluride how to weather the storm, we have to be able to do it ourselves,” explained Major. “We have very significant challenges raising money, but we are being as prudent and conservative as possible going in to 2009.”

Knight echoed Major’s views. “Foundations have a responsibility to use their funding wisely,” she said. “They must demonstrate to their board and their founders that they have made the best choice.”

Telluride Foundation Program Director April Montgomery reports an escalation in competition among grant recipients as she reviews announcements from organizations who are reformulating their guidelines and criteria. “I am expecting to see more cutbacks,” she said.

On Jan. 10, the U.S. Labor Department announced that jobless claims jumped from 547,506 in 2007 to 952,151 last year. With current economic conditions, Knight said, “Nonprofits need to keep a very close watch on budgeting.

“No-one feels like there are a lot of good places to cut in relation to staffing,” she cautioned. “We all work very hard.”

With the Foundation’s one full-time and two part-time “very dedicated” staffers, Montgomery said, “We manage to get a week’s work done in a few days.” She believes that a major challenge to nonprofits in our increasingly lean times will be to retain fully committed “core supporters” who do the lion’s share of work of every successful nonprofit organization. “We hear a lot about firings, and losing employees, but I don’t know if people and organizations understand the importance of keeping your valuable staff, the core people, who make the organization run,” Montgomery said, adding she prefers trimming programming expenses to cutting staff. For example: “The Foundation has done a lot using contract employees,” she said, who are “much cheaper for the organization,” she said. The Foundation’s finance director is a contract employee, as are the temporary employees hired at the height of the grants submission and allocation process.

Some other Foundation streamlining measures include cutting out travel, not filling new staff positions and no more discretionary spending. The result: “We were actually able to increase by 5 percent allocations for 2009 over 2008,” Major said.

“If others follow in the Foundation’s footsteps,” said Major, “the community of nonprofits in the region should be able to make it through these trying times.”