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Policy change means ILAS will have to raise more funds

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A change in policy from its largest contributor is pushing Indianapolis Legal Aid Society to introduce itself to a wider audience.
 

fundcut-15col.jpg Ron Walker (left), president of the Indiana Legal Aid Society, and John Floreancig, general counsel of ILAS, review plans with a consultant. The agency is stepping up fundraising efforts to cope with a reduction in support from the United Way of Central Indiana. (IL Photo/ Aaron P. Bernstein)

About a month ago, the nonprofit was notified that the United Way of Central Indiana would be reducing its contribution by nearly $126,000, according to John Floreancig, general counsel of ILAS and Ron Walker, president of the ILAS board of directors.

The cut is the result of a recent shift in United Way policy. Specifically, the organization does not want its contributions to exceed 35 percent of any receiving agency’s annual budget.

In the UWCI’s 2012-2013 fiscal year, ILAS has an annual budget of approximately $760,000, of which United Way support comprises about 51 percent or $384,541. The reduction will be phased in over the next three years until the amount cut comes close to $126,000.

“It’s not the best way to start your day,” Walker said of the phone call informing him of the United Way’s decision. “But I think in the long run, to me, it makes sense from their point of view. And I think it’s good for us in the sense that we will have to go out and make our case better and more broadly.”

For the 2013-2014 fiscal year, the United Way website shows ILAS received $271,792 from the community fund and another $19,939 in designated contributions.

The United Way of Central Indiana board of directors adopted the new policy May 22 at the recommendation of the United Way’s human services committee.

“In reviewing our policy it’s really a best practice to not have more than 30 or 35 percent of an agency’s budget coming from any one source,” said President and CEO of the United Way of Central Indiana Ann Murtlow, explaining organizations can risk their sustainability if too much support is coming from one source. Nonprofits need a diverse revenue stream to provide security long term, she said.

The exception to the new policy is Connect2Help. Because of the agency’s unique role in connecting people in the community with programs and services, Murtlow explained that the United Way will continue to provide more than 35 percent support.

According to its website, the UWCI supports 93 agencies spread throughout a six-county region. Four agencies, including ILAS, are currently depending on that support for more than 35 percent of their respective budgets, Murtlow said.

Both Neighborhood Christian Legal Clinic and Indiana Legal Services Inc. get support from the UWCI but for neither agency does the level of funding come close to the 35 percent ceiling.

The $73,335 the Neighborhood Christian Legal Clinic was appropriated from the United Way’s community fund for 2013-2014 comprises roughly 4 percent of the agency’s $1.8 million annual budget, said Josh Abel, executive director of the clinic. This money comes in addition to the $23,773 in designated contributions from United Way donors.

Likewise, the $7.5 million annual budget at Indiana Legal Services relies little on UWCI support. From the United Way’s community fund, ILS is rece

ILAS_box.jpg

iving $110,961 in 2013-2014 along with $18,997 in designated contributions.

The 35 percent ceiling does not preclude agencies from receiving additional monies from the United Way through grants, Murtlow said.

Abel pointed out that in addition to the community fund dollars, the Neighborhood Christian Legal Clinic received $75,000 last year to support the work it was doing with Latinos.

To soften the blow, the United Way will be phasing in the reduction. Figures from Walker and Floreancig show ILAS will lose $41,897 in UWCI support during the United Way’s fiscal year 2013-2014 and $83,795 in FY 2014-2015 before reaching the full $125,692 in FY 2015-2016.

To counter the drop from the United Way, the ILAS plans to increase its fundraising efforts by looking for ways to bring in more private donors, especially those outside of the legal community. In the nonprofit sector, conventional wisdom holds that donors are the most sustainable way to raise money.

Walker described the solicitations as being aimed at two groups. First, the agency will solicit donations from the legal community by reminding lawyers of their ethical obligations to provide services to the indigent. Second, it will introduce itself to the wider community with the message that having free legal help available to the underserved improves the stature of Indianapolis.

“You want people when they need the legal system to have access to it,” Walker said. “What we’re finally figuring out is that having these services available to everybody who needs them, not just the wealthy, is part of being a world-class city.”

Until recently, the ILAS did not devote as much time to fundraising, Floreancig said. Before the United Way announcement, the legal agency had been looking for ways to increase donations. But now that the agency is facing a shortfall, it is stepping up its effort. The nonprofit has hired philanthropic consultants Johnson Grossnickle and Associates in Greenwood to help.

Other sources of funding for the ILAS are the Indiana Civil Legal Aid Fund, a $10 registration fee from clients who are able to pay, and fundraising events.

Floreancig said his nonprofit is very positive and considers United Way’s change in policy as providing a push to connect with individuals beyond those it serves.

“We think it is a golden opportunity to branch out to the nonlegal community and to educate lawyers that we’re here and we’re privately funded,” he said.

The ILAS has reason to believe stepped-up fundraising will bring a response. During the nonprofit’s annual dollar campaign in December 2012, board members made a more focused effort to remind donors to mail in their donations. As a result, contributions reached a high of roughly $155,000.

Still, Floreancig notes the ILAS does have obstacles to conveying its message in a market that has many worthy causes. Confidentiality concerns prevent the legal aid organization from parading its clients’ stories in public, so explaining what the nonprofit does and who it helps will be difficult.

On top of the reduction, ILAS is not seeing a decrease in demand for its services. The cramped waiting room overflows, especially on Monday mornings, sending clients to sit in the hallway outside the agency’s front door.

“I see all the economic reports,” Floreancig said, “but my waiting room is my economic barometer.”

In addition, the ILAS, which handles mostly family law cases, does not duplicate services offered by the Neighborhood Christian Legal Clinic and Indiana Legal Services. As Walker noted, the three agencies are not competing for clients because many low-income individuals need help with legal problems.

Murtlow said the overall fundraising climate in Indianapolis is good. Along with the improving economy, the Circle City is “deeply steeped in community service and philanthropy.”

“I think when an organization does good work, people rise to the occasion,” Murtlow said, noting law firms and lawyers understand the service ILAS provides. “I would imagine they (ILAS) would receive significant support.”•

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