Corrections or additions?
These articles were prepared for the January 25, 2006
issue of U.S. 1 Newspaper. All rights reserved.
Make the Best Use of Stock Media
If you’ve ever looked for stock media elements – photos, music, or video – on the Internet you know that there is quite a lot of it available. But what’s the best way to find, acquire, and use the right stock media? And what about selling into the stock media market? Is it a business that might make sense for you?
The Princeton MCA-I looks stock from every angle on Wednesday, January 25, at 6:30 p.m. at Templeton Hall, Princeton Theological Seminary. Cost: $15, including supper. Call 609-466-2828, ext. 20 for more information. Guest speakers include writer/producer/director and stock footage library owner Marilyn Petrokubi of TimeSteps Productions and stock photographer Phil Leo.
With a master’s degree from Rutgers University in Library Science, Petrokubi began her career as a professional librarian specializing in film, research, and library management. This lead to designing film and video stock footage libraries for clients such as AT&T and Bell Labs. By the mid-1980s Petrokubi began to assemble her own stock footage collection of historical scenes from 1895-1960, which has become the TimeSteps Stock Footage Library.
A natural progression led from research and writing to production work for film studios, advertising agencies and corporations, including Columbia Pictures, L.L. Bean, AT&T, and Chase Manhattan. Her award-winning credits include: "The Invention of Gasoline" for Exxon, "100th Anniversary" for Johnson & Johnson, and "A Second Chance" for New York Blood Center.
Based in Montclair, Leo has been a professional photographer for 15 years and has been with Getty Images since it’s inception in 1995. In 1999 Phil joined forces with fellow stock shooter Michael Denora to form the production Company, PM Images. Through Getty and PM, Leo’s images are licensed for use throughout the world in every form of media. Currently Phil is busy with "Expression in Motion," using dancers, athletes, and martial artists to create unique conceptual images.
Both guests will show examples of their work and talk about the creative and business side of the stock media industry.
A great business idea, service, or product in and of itself doesn’t make a successful entrepreneur. If the goal is to create a viable and ongoing business, then financing will be necessary throughout the development cycle. To pull in capital when the business needs it, attorney Ed Zimmerman of the technology group at Lowenstein Sandler, believes that entrepreneurs must build relationships with angel investors and venture capitalists early on in the process.
The development life cycle generates needs for cash infusions at predictable points. Ideally, says Zimmerman, entrepreneurs are providing the initial money to get their companies off the ground. But when the companies are ready to staff up and get more capital, they often turn to angel investors – individuals who are willing to invest $1 million or so in a company if they see potential for earning a substantial multiple in a five-year time frame. But unless the entrepreneurs have already developed relationships with the investment community, they may not find the money when they need it.
At the next stage, when companies have about $1 to $1.5 million in revenue and may be looking to hire several more staff, purchase more equipment, and move to a bigger space – that’s when they need a venture capitalist. But VCs get 2,000 business plans each year for every six companies they accept. In the ideal world, says Zimmerman, the company’s angel investors would be willing to recommend the entrepreneur to a venture capitalist.
Zimmerman moderates a session on "Angels and Angel Financing: How to Be an Angel and Mistakes with Angel Investing" at the NJ Capital Conference on Friday, January 27, at 7:30 a.m. at the Westin Princeton. The conference, organized by the New Jersey Technology Council, is for providers of angel financing, executives from early-stage businesses, and venture capitalists. Cost: $275, but just $25 for students. Call 856-787-9700 or visit www.njtc.org.
Zimmerman is a pragmatist who likes to create structures that make business happen more efficiently. At the Roseland-based office of Lowenstein Sandler he started the tech group, which he chairs, in about 1998. Because the work he enjoyed most was with younger technology companies, he decided to organize the group in a nontraditional way – around the types of companies dealt with rather than by type of law practiced.
Now 45 of the 250 lawyers at the firm are in the tech group, including tax lawyers who understand the tax issues of tech companies and employment lawyers focused specifically on the needs of tech-based businesses and their investors. Intellectual property lawyers are also a natural fit in this group.
Zimmerman also saw ways "to enhance the ecosystem for early-stage technology companies in New Jersey." Consequently, three years ago he founded and still co-chairs an organization called Angelvine (angelvinevc.com), formerly Jersey Angel Network, which is an active group of angel and venture investors. "We join forces so we can get better deal flow and trade deals with each other," says Zimmerman. Mostly the two groups get to know each other, creating a stronger community of early-stage investors.
As an angel investor himself, Zimmerman has a good idea of what kinds of investment opportunities angels are looking for and how they decide who is a good prospect:
Choose companies that are capital efficient. For Zimmerman, this means pre-revenue software and services companies and not makers of therapeutic drugs. Generally companies in the IT sector, chip makers, and medical device makers are capital efficient, meaning that with a relatively low amount of capital, say $2 to $8 million, the company has everything it needs to get up and running. Makers of therapeutic drugs, on the other hand, are capital inefficient, needing more like a $60 to $80 million investment to get started, and, says Zimmerman, "It is hard for an angel to be a meaningful component."
Work with people and sectors you know well. "Angel investors are affluent people who have been successful and have enough money to invest in a long shot," says Zimmerman, adding that they are "usually people who have made money in and around the sectors in which they invest." Often early-stage investments are done cooperatively, and Zimmerman admits that he himself is not interested in being a sole angel.
Zimmerman talks about a recent investment he had made in a software company. He knows the lead investor well and the entrepreneurs "well enough." Perhaps just as importantly, he understands the market they are attacking and has spent a lot of time with early stage technology businesses. "I feel like I have better odds," he says. "But whether I will make money involves luck." For most people, he adds, angel investing is not a day job.
For start-up companies that think they will be looking for an angel investor, this means networking and attending events like the NJTC Capital Conference. "Companies need to start building relationships long before they are ready to take money," says Zimmerman. Because potential investors often know one another, time invested with a few people can pay off in a big way. Zimmerman himself spends significant time developing and furthering relationships with venture capital investors who are interested in a similar market and have been repeat players in it. "People get passed around," he says, and investors will introduce talented, interesting prospects to other potential investors.
Although the actual process of getting money from an angel investor can happen in six to eight weeks, Zimmerman says you usually find if you dig deeper that the relationship has developed over a couple of years.
Go for the big money, but know you can lose all. "Every time I make an angel investment, I understand that it could rapidly go to zero," says Zimmerman.
Look for an opportunity to earn a significant multiple. When people invest in stocks and bonds, they look at relevant benchmarks. For example, says Zimmerman, "they may buy a stock because it has a shot at outperforming the S&P 500." Because there are few benchmarks for early-stage investors, they are looking for a reasonable chance of earning a multiple of maybe three to ten times their investment in a five-year period.
Look carefully at the company and the assumptions behind its business planning. The start-up must have a significant addressable market. For example, a company with the highest market share in a $9 million market would be of no interest. It must also have a high profit margin and the potential to sell at a high multiple.
Recently someone asked Zimmerman about funding a company that distributed another company’s products. Companies like these, says Zimmerman, have 20 percent margins during their lifecycles and sell for low multiples, adding that if you try to sell the company and the manufacturer says no, you have a big problem. "It’s not a bad business," he says, "but it’s not right for angel investing." Successful software companies, on the other hand, generally have 40 percent or greater margins, as well as the potential to sell for high multiples.
Make sure the technology is unique and protectable. The company must not only have a great piece of technology – something that no other company has – but it also must have the right to keep others from copying it.
Determine if the product has good customer traction. Key customers in the target market must find the product really useful and be willing to pay for it. Zimmerman urges angels to talk to potential customers. "Even with a pre-revenue company, you can do customer diligence," he says. The company will usually refer an investor to pre-customers whom they have been talking to about their product.
Zimmerman advises asking: "What do you think of the product? Does it solve a real pain for you?" If the response is that the product (1) worked; (2) solved an acutely felt pain; and (3) the solution it provides is necessary and no one else offers it; and (4) the company is a stable one, then, says Zimmerman, "that’s what you’re looking for."
Lowenstein Sandler urges entrepreneurs to learn more about Angelvine as a way of connecting with potential funders. Angelvine’s screening committee reviews business plans and decides which are worthy for member investors – both angel and venture capital – to review. At its three meetings each year, about 10 presenter companies are invited. On average, about 40 percent of these get funded by Angelvine members and another 20 percent by other investors.
"Not only does (participating) enhance the odds of getting funding, because Angelvine is a conduit," says Zimmerman, "but if you have survived our screening committee of angels and venture capitalists, it indicates to you that you are a fundable company."
Lowenstein graduated in 1989 from Haverford College, where he studied sociology and anthropology. He earned his J.D. from University of Pennsylvania Law School in 1992. He went to Lowenstein Sandler directly from law school.
In law school he thought he wanted to be a trial lawyer, but work experience during law school and the summers in between led him in a different direction. "Litigation work as a young lawyer," he explains, means research, reading large boxes of documents, and deciding how many copies go to what court. "There’s lots to do, and little to think about."
He found the corporate side to be very different. "Someone would give me a paragraph and ask me to really think about it," he says. "Or they would explain a business deal people were trying to cut, and ask me to figure out what the other side was trying to do that we didn’t know about." Zimmerman had found his metier: "Helping people to put things together in business was more intriguing for me than only being there when people are fighting."
– Michele Alperin
The history of humankind has been of one of learning to thrive in lands formerly deemed uninhabitable. Today areas once polluted beyond redemption are being cleaned up and transformed into prime real estate. Harrah’s Casino, slated to open its doors this coming summer, sits on a giveaway site in Chester, Pennsylvania, which, after a $10 million soil sanitizing has become a $300 million property asset. But while enviro-technology has made enormous leaps of late, the caveat still remains: let the brownfield buyer beware.
To guide prospective developers from the first survey to the final legal niceties, the New Jersey Institute for Continuing Legal Education is sponsoring "Life After the Cleanup: Redevelopment Real Estate," on Friday, January 27, at 9 a.m. at Doubletree Suites in Mount Laurel. Moderators are attorneys Michael Rambert and Phyllis Bross of Parker, McCay in Marlton.
The seminar consists of a series of presentations and panel discussions. Presenters include New Jersey Department of Environmental Protection officers Susan Boyle, from the office of brownfield reuse; Robert Confer, chief of hazardous waste permitting, south; and Robert Sobolesaki chief of the bureau of operating maintenance and monitoring. Richard Sheldon of Wills Environmental Practice speaks on insurance issues. Chris Purvis, the Haddon Heights, Pennsylvania, environmental division manager of Pennoni Associates, a consulting firm, discusses post-closure landfill monitoring. Finally, attorney Andrew Robins of Giordano, Halleron, & Ciello in Middletown talks of the need to educate realtors and homeowners associations.
A Philadelphia native, Rambert attended Middlebury College, graduating in l980 with a B.A. in geography and urban economics. From there he went on to gain a master’s degree from the University of Pennsylvania in city planning. His hometown then hired him to handle the development of all of Philadelphia’s industrial parks. "We would study the land in depth, calculate its worth, negotiate prices, and oversee the plant establishment," he recalls. "You really got to see the methods and value of a good cleanup."
Rambert then moved to two other law firms, one in Ohio, the other in Pennsylvania, before coming to Parker, McCay. He serves as the firm’s specialist in land use and environmental law.
"A dog who bites his owners can be a great buy, if you can clean up his act," says Rambert. "So it is with brownfields." The maxim of the higher potential profit equaling higher risk holds true here. But the sharp investor can increase his odds by knowing how the cleanup game is played.
Due diligence. It is a sad-but-true fact that almost any land might hold disagreeable levels of pollution. While individual home buyers are typically safe, for the purchase of any urban commercial lot Rambert suggests a Phase I and II inspection as a worthwhile precaution. This is wise even if no previous contamination is suspected.
In environmental parlance, Phase I inspection typically includes a walk-around inspection of the property and those surrounding it. There should also be a study of maps: including topographical, aerial, fire inspection, and historical maps – those indicating what kinds of structures inhabited all adjacent lands some years back.
Any suspicions of trouble might occasion a Phase II inspection, where inspectors get down and dirty, conducting augur and continuous core samplings along with ground water monitoring.
Such due diligence not only gives the buyer an idea of what he is purchasing, but it also protects against further cleanup liability down the road.
Innocent purchasers. In the eyes of the 1998 Brownfield and Contaminated Site Remediation Act, the individual buyer who has bought land after Phase I and II due diligence inspections, and has found it to be clean, is labeled an innocent purchaser. That is, he will not be held liable for cleanup costs if contamination is later discovered. Individuals who perform no due diligence are liable for all future cleanups.
The basic rule of thumb is that land cleanup liability goes to the discharger, if he can be found. Reporting a discharge of pollutant materials on your or nearby land can quickly get you off the hook.
There are two other ways to gain innocent purchaser status. The first is to take all necessary measures to get site approval from the New Jersey DEP. Secondly, apply for a No Further Action Letter from the NJDEP, which releases the property owner from any further cost of cleaning past environmental contaminations. Typically this is granted after the site, while not spotlessly pristine, has been cleaned within reasonable limitations. Of course, this is in no way a license to pollute in the future.
Insurance woes. "This is New Jersey," laughs Rambert, "land of the highest possible premiums. Each time a property passes from builder to owner to new owner, expect a dramatic boost in your payments." Buyers of known brownfields can obtain insurance that covers any cleanup costs in excess of a prefixed, estimated amount. Rambert warns that such insurance is expensive, but it may be the only way potential buyers can get the necessary funding for the purchase. Riders must be purchased if realistic compensation is expected. "Remember," Rambert points out, "no spill-and-cleaned site stays capped forever. It requires monitoring and monitoring costs."
Payback blessings. The good news is that the state of New Jersey pays well for your doing good. In New Jersey’s basic remediation package, 75 percent of the owner’s site cleaning costs are shouldered by the state if he agrees to certain redevelopment agreements. This package is granted to owners based on their economic development value, and particularly on projections of the tax revenue their new projects will generate.
Additional grants include 25 percent of cleanup costs up to $100,000 for those cleaning hazardous discharges. Other grants reward new environmental remediation techniques. The Environmental Opportunity Zone Act, for example, allows buyers to come in, clean up, and build within a specified area and enjoy a greatly reduced tax rate.
Storm water fouled by roadway runoff, pesticides lacing the soil and water, former waste discharge sites, the list of pollutants seems endless and daunting. But technology to sanitize polluted land is becoming more effective – and much cheaper. It doesn’t always cost a fortune to make that formerly unlivable site a place to thrive. Yet before you buy, remember Rembert’s final words on real estate purchasing: "You never know what’s under the ground."
– Bart Jackson
In the uber-competitive 21st century even arts organizations have to come down from their ivory towers and think about how to maximize income. "It’s very important for arts organizations to make it a point to create successful partnerships," says Danny Tamez, director of education at George Street Playhouse in New Brunswick. "You can do a lot more through good partnerships than by trying to go it alone."
Tamez is one of many speakers addressing all facets of non-profit management at Princeton Community Works’ annual conference on Monday, January 30, at 5 p.m. at the Frist Campus Center on the Princeton University campus. His topic is "Increasing Your Effectiveness Through Partnerships." The cost of the evening is $27. Register at www.princetoncommunityworks.org/program.html or by calling Harper McArthur, 609-446-6636 or Christina Mueller, 609-924-5071.
George Street Playhouse is something of a wiz at creating successful partnerships with other area organizations that complement and highlight its annual season of theater. Several years ago George Street formed a partnership with several area medical facilities during its production of "Wit," an intense one-person show focusing on breast cancer.
"We did a number of partnerships with area medical organizations that were really advantageous," says Tamez. "We were able to tap into the medical expertise to help inform the play. A medical school was able to bring its early students to the show to study the empathetic requirements needed when working with patients suffering from breast cancer. It was a total win-win situation."
This year George Street created an issue-oriented work about substance abuse for one of its touring shows. "We had a triad partnership between George Street, the Robert Wood Johnson Foundation, and the National Council on Alcohol and Drug Dependency of Middlesex County," says Tamez. "In this case we had an arts organization, a funding organization through Robert Wood Johnson, and the expertise of the NCADD. All together, we were able to create a piece that went much deeper than if the theater had created it on its own."
This is Tamez’s fourth season at George Street Playhouse. Originally from Dallas, his mother was a physician and his father worked as a mechanic. He is a graduate of Texas Christian University and Goucher College in Baltimore. Prior to coming to New Jersey, he was community programs manager at the Denver Center Theater Company and education manager at Dallas Theater Center.
While finding the best partner can be the hardest part of the partnership process for many arts organizations, says Tamez, he recommends the following steps to make it happen:
Set up goals. "Bring information to the arts event that the individual artist may not have included in his or her piece," says Tamez. "Ask yourself if there is a way to bring in a group that would normally not attend the event. Also is there a way of deepening your relationship with your attendees? Is there some new insight or information into the artistic piece that you can provide?"
Plan in advance. "It’s important to do as much research as you can," says Tamez. "All partners have to get something positive out of the partnership. That can be financial, name recognition, a dissemination of information, or even reaching a new market or constituency. If you get stuck in a bad partnership, it can get just plain ugly."
Use your network. "The best thing to do is to go within your own network and ask very open questions," he says. "Even more effective is to go very high up the food chain and ask for advice. Ask people you respect whom they would recommend."
Distill and interview. "Interview before making any commitment," says Tamez. "Some people are shy about taking people’s time, but it’s very important to interview your potential partners and not go with someone on the first walk-in."
Spur of the moment decisions are usually not recommended. "Only if there is a very high recommendation from someone whom you respect highly," says Tamez. "Otherwise take your time and make the right decision."
Leave your heart at home. "I would caution against doing anything out of the kindness of your heart," says Tamez. "Your partner could pull on you at any time. That’s the last thing you want."
– Jack Florek
The discussion is supposed to be about the budget, but Anne from accounting wants to vent about the lack of heat in her office. Meanwhile, Ernie and Joe are consumed with back-of-the-room speculation about the probable outcome of the Super Bowl, and Francine, the meeting facilitator, is turning to Jim, who wants to let everyone know that his office is even colder than Anne’s, and his workload is more onerous, too.
Everyone has been sitting for nearly two hours. Surreptitious Blackberry checking is increasing by the minute, a great many stomachs are growling, and virtually no one is giving even minimal thought to ways of trimming the budget.
This meeting scenario is repeated thousands of times a day in offices across the land as the same people who as children could so easily sidetrack teachers and parents practice the art in conference rooms.
Bad meetings – terrible meetings – are epidemic. And the problem spills out beyond the meeting room. "Meetings are the reason that people are so resistant to teams," says Glenn Parker, a Skillman-based consultant specializing in corporate teamwork (www.glennparker.com). Parker, who has just written "Meeting Excellence: 33 Tools to Lead Meetings that Get Results," speaks on the subject at the Community Works Conference on Monday, January 30. (See the article above for full details.)
Parker, the author of 16 books, many on management topics, is a New York City native and graduate of the City College of New York (Class of 1959). He did graduate work in industrial relations at the University of Illinois and at Cornell, and then worked in the non-profit sector in Trenton in the late-1960s and early-1970s, participating in that era’s war on poverty. He took that experience and began consulting, first to non-profits, and then to corporations.
He just finished a two-year project for the Coast Guard, working on team dynamics on its new ships. He has done other projects for the federal government, but does much of his work for pharmaceuticals, including Bristol-Myers Squibb and Johnson & Johnson. He is currently doing a lot of work for Novartis. The co-author of his new book is Robert Hoffman, executive director of organizational development in Novartis’ oncology business unit.
Parker and Hoffman first developed the book as a tool for Novartis personnel, and posted it on the company intranet. But they realized that it had broader applicability, and Parker’s publisher, John Wiley and Sons, agreed.
"Who doesn’t hate meetings?" exclaims Parker, who has been to his share. Asked to describe the worst meeting he ever attended, he had to think a minute before describing a really bad one by its most painful aspect. "It was four hours long," he says. "Without a break!" Adding to the misery of the time drain was the fact that the meeting’s leader never got around to key agenda items. "He tried to rush through them at the end," he recounts. That left a number of participants not only enervated, but also disgruntled.
That meeting had been a grueling waste of time, but it could have been different. Here’s how:
Plan to accomplish something specific. Seinfeld had a fabulous run with a show about nothing, but a meeting needs to be about something. Something very specific. Everyone should know that they are gathered to choose three corporations to approach on partnership deals, or to trim $15,000 from the maintenance budget, or to pick a venue and a speaker for the upcoming fundraising gala.
"The single greatest meeting flaw," says Parker, "is that there is no clear purpose for the meeting. Every meeting should have a clear outcome."
Draw up an agenda. "You have to have a track to stay on track," says Parker. The agenda is that track. It should be made up of points that lead directly to a conclusion. Written down, and passed out, it lets everyone know where the meeting is headed, and what mileposts it must pass.
Halt detours quickly, but politely. Has there ever been a meeting that someone didn’t try to hijack? Probably not. Keeping participants on the subject is harder than herding rabbits. One thing leads to another, and soon the budget meeting has become a complaint fest or a rambling series of anecdotes about whose office gets the least heat on frigid afternoons.
Parker’s suggestion is to build a "parking lot" for all of those extraneous comments. Let the off-topic speaker know that his concern is important, and then gently bring the meeting back on track by saying that time is limited and the budget issue really must be decided. Tell everyone who tries to stray from the agenda that his issue will be discussed right after the meeting, or put on the agenda for the next meeting. Everything will be lined up in the "parking lot" respectfully, and will be addressed at a more appropriate time.
Many of the off-topic concerns are legitimate, says Parker. It is vital to keep the meeting on track, but it is also important not to be rude in doing so.
Give everyone a break. The optimal time span for a meeting is about one hour, says Parker. That is about the longest time that anyone can sit still and maintain concentration. In no case should a meeting stretch more than 90 minutes without a break.
During prolonged meetings breaks are essential. But, warns Parker, don’t make them too long. Five minutes is fine. Go much beyond that, he warns, and people begin to lose focus. They start to make phone calls, check E-mail, and, if on their home turf, drift back to their offices.
Provide noshes. "Everyone loves food," says Parker. "There is a grand tradition of breaking bread." In addition to quieting rumbling tummies, food can be an ice breaker, he says. "People talk about the food. They talk about whether they’re on diets, what diets they’re on." In a group of strangers, it can be the one common element.
In choosing meeting food, think healthy, he adds. Avoid the Danish, and go for fruit, bottled water, or sandwich wraps. In addition to promoting good health, light food will help to keep participants awake.
Don’t suffer in silence. If you find yourself at a meeting that is going nowhere fast, but taking its time in doing so, consider helping out. "What I would do," says Parker, "is ask for a five-minute break. I wouldn’t say why, but I would pull the meeting leader aside and suggest that he pull the meeting back on track."
The poor guy, pulled every which way by bored or contentious meeting participants, might be grateful. Or not. But at least it’s worth a try. After all, the unproductive afternoon you save will be your own.
– Kathleen McGinn Spring
For non-profit organizations, surviving in tough economic times can sometimes feel like being lost in the wilderness. Being dependent on contributions for a good chunk of their operating budget, organizations may find that writing that annual appeal for donations can be scary in good economic times and downright horrific in a slumping economy.
"Statistics show that over 80 percent of philanthropic dollars come from individuals, not from foundations and corporations," says Becky Dembo, executive director of the Partnership in Philanthropy (PIP), based in Chatham. "That means that it is important to build relationships, and we try to teach the non-profit organizations how to establish those connections with people. One good way to do that is by what you write."
Dembo, along with fellow consultant Janice Alderman, speaks on "Writing for Dollars" at Princeton Community Works, on Monday, January 30. See the article above for full details.
Born in Philadelphia, Dembo has been a New Jersey resident for the past 40 years. She earned her bachelor of science degree from the University of Pennsylvania and her masters from Drew University. She says that PIP’s mission is to help enable small non-profit organizations to maximize their individual fundraising and management capacities.
According to Dembo, too often non-profit organizations fail to pay the same attention to detail when soliciting funds as they do in their non-profit work. A good letter of appeal should start with a grabber to get the attention of potential donors, followed by a fleshing out of the what and whys before ending with a direct appeal. "By the time they finish reading your letter potential donors should see that this is something they are really interested in, and that it is a good place to put their money and do some good," she says.
Now in its 15th year of operation, PIP works with a variety of non-profit organizations. "We have had clients in all 21 counties across the state," says Dembo. Currently PIP is working with an organization that serves the homeless, the New Jersey Agricultural Society, a 200-year-old organization that was originally founded to barter farmers’ food, and an organization that uses horses to teach the handicapped to become more self-sufficient through the acquisition of riding skills.
Each year PIP receives applications and eventually selects 10 to receive PIP services. The selection process can be daunting. Organizations can fill out an application on PIP’s website (www.pipnj.org). This is followed by readiness testing interview of the board and staff. Financial documents such as audits, records, and bylaws must then be submitted. "We look for the sustainability of the organization," says Dembo. "We want to make sure that they are still going to be around in three years."
Once a non-profit organization is selected, PIP requires a major commitment from its board members. "Our program is a very labor intensive course of study," says Dembo. "It requires 150 hours in the first year and 15 hours the second year. We like to work with an organization’s board of directors, because we believe that fundraising should be board driven, not staff driven." PIP charges a fee based on a sliding scale, with fees ranging from $200 to $6,000.
At the end of the first year, an organization is left with a 12-month fundraising plan with action steps and a schedule listing when each action step must be accomplished. A PIP consultant returns periodically during the second year to monitor the implementation of the plan and the impact of each step. If the plan is not completed, the consultant looks at why and what can be done to make it happen.
"Many times the organizations fail to implement the action steps drawn out in the first year," says Dembo. "There is such a high turnover rate in non-profit organizations and sometimes we find that the PIP plan is just sitting on a shelf somewhere. That is why we started the second year. It means that somebody is going to come back and be a nag. We worked so hard in the first year, we don’t want to see it sitting there getting dusty."
Dembo says that taking a thorough approach to fundraising can make the difference between survival and a early demise for non-profits. "We went into an organization last year in which the first thing the PIP consultant did was help with the annual appeal letter," says Dembo. "We tweaked the letter, helped the organization clarify its message, and put in a testimonial. In the first couple of months the group managed to double what it had brought in the year before, and that was all just because the letter was more effective."
Dembo recommends that organizations employ the following tips when writing that appeal letter:
Establish your audience. Every single thing that a non-profit puts out – letters, grant proposals, or brochures – has to have a different approach. "Generic approaches don’t work," says Dembo. "A letter you might write to lapsed funders – people who gave to you over a period of time and then stopped for the past couple of years – should be very different from the letter you send to attract new funders."
Use an attention grabbing opener. "You have to have something at the top of the letter that grabs their attention," says Dembo. "Be personal and be specific. Tell a story that is appealing that can really show the impact that your organization has on the community."
Know your goals. Every non-profit has a different criteria defining what a major gift is. "To some, $100 is a huge deal, while to others a $1,000 gift is ho hum," says Dembo. The rule of thumb is that if a major donor is someone who gives $100 and an organization increases its fundraising by $4,000, then that is a major improvement.
Patience, patience, patience. Fund raising is a process and success might not come immediately. "Remember that you are building relationships and sometimes that takes a while to establish," says Dembo. "Don’t get discouraged if it takes a while for the results to show up."
Dembo says that in a tough economy, non-profits need to get smart about fundraising. "Remember that fund raising process is exactly that, a process," says Dembo. "It requires donor identification, donor cultivation, donor solicitation, a stewardship of funds, and board leadership. It is a commitment."
– Jack Florek
Corrections or additions?
This page is published by PrincetonInfo.com
— the web site for U.S. 1 Newspaper in Princeton, New Jersey.