Yet Another Reason to Diversify Your Funding (like you really needed another)

It's official: PND (the Philanthropy News Digest) reports that when corporations restructure, grants to nonprofits dwindle. Of course, we've all felt this for years, and we all recall such major events as when Chevron and Texaco merged in 2001 Texaco ended its sixty-four-year sponsorship of the Metropolitan Opera's Sunday afternoon radio broadcasts. Similarly, Mobil's long-time support for PBS's Masterpiece Theatre ended shortly after it became ExxonMobil in 1999.

The current worries were spurred by news of major restructuring coming at Altria Group, the parent of Philip Morris, Kraft Foods, and many others. Many have criticized Altria's funding in the past as an attempt at "green wash" (doing good deeds to cover up for bad, in this case being a major source of food and nutrition program funding through its Kraft division to make up for the damage done by the Philip Morris cigarettes division).

With over 700 current grantees sharing in close to $200 million in cash and in-kind gifts annually, a major shift in Altria's giving could have ripple effects throughout the nonprofit sector.

Still, the best way for nonprofits to protect themselves from corporate mergers and restructuring, said Gene Tempel, director of the Center on Philanthropy at Indiana University, is to avoid relying on a few big donors. "I give the same advice I would to shareholders. Diversify."

This is the same advice I give my clients, and that I try to get across when I teach workshops. Diversify at all levels. By that, I don't just mean mixing individuals, foundations, corporate, and government money, but also diversifying within each of those areas.

It's not diversifying if you only have one foundation, one company, and one major donor. You need to build your base so that a loss of any one funder, or shift in any one sector, does not throw you off your plan. Stability and sustainability, not complacency, are our watchwords.