Pittsburgh CDCs Funding Toolkit:
Other Funding Ideas
Alternatives to NIDs
Not every community is a good candidate for a NID. Some communities are
doing well without the mandatory assessment and augmented services that NIDs
provide. These communities are relatively clean and safe, and the commercial
and residential real estate market functions well enough. A voluntary
neighborhood association may be sufficient to meet the neighborhood’s needs in
terms of an advocacy and planning entity.
Other communities have problems a NID could help to address, but do not have
a critical mass of business and property owners who will support a NID, or
perhaps the number of taxable properties is to small to warrant the time and
expense to create a NID.
Still other communities have both the need and critical mass; but the existing
organization is not structured in such a way that the property owners will provide
needed support for a NID campaign. Such communities may need a year or
more of preparation and reorganization before a NID is feasible.
In cases such as these, business districts and CDCs may choose to explore
alternative funding efforts. Some of these produce relatively modest amounts;
others could have quite significant results. Many have other benefits in addition
to the money that is raised. The following list offers many possibilities but is by
no means exhaustive. Other possibilities are included in the Other Resources
section at the end of the Toolkit.
Voluntary contributions – building a membership base
Many CDCs have paid membership programs. Few develop membership in
ways that maximize the potential income from this source. Membership
programs and membership campaigns are labor-intensive. Building
membership takes time and money; but the payoffs can go well beyond the
The first step in developing an expanded membership is to build or review
your existing database. Does your database consist of an outdated card file?
How often do you update your database? Who is responsible for regularly
reviewing and updating the database? What methods do you have for
determining the accuracy of the information you have? For example, do you
send an e-mail once a year to the entire database asking them to review and
update the information you have?
The next step is developing a compelling case for membership. If the primary
purpose of membership is to support the ongoing operations of the CDC, only
the most committed and devoted business owners and managers will belong.
What added value does the membership offer? At the most basic level, do
members benefit from increased visibility? Can you offer members savings on
things they purchase – like health insurance? Can members offer each other
savings on business-to-business purchases? Does membership offer a
business access to other businesses that might want to buy from them?
Once the database is up to date and accurate, and the case statement/key
selling points are developed, the board chairperson and executive director
should select and recruit a membership committee. Those selected should be
business leaders who are willing to commit time and energy to building the
membership. Remember the “4 Ps” of membership and fundraising –
Personal Presentations by Persuasive Peers.
Collateral material is important. It need not be overly expensive, but it should
be professional, persuasive, and brief. It should be clearly a membership
pitch – a general organizational brochure with membership information on the
back page will generally not make the case as well as a membership fact
sheet or brochure. The value of a printed brochure is that the potential
member can save it and consider it later, whereas an electronic message –
an e-mail – will likely be deleted and forgotten.
Membership levels should be determined according to some easily
understood formula – number of employees is one method that is often used.
Gross sales are sometimes used, but business owners are often reluctant to
reveal their sales. Membership levels should be high enough to demonstrate
commitment, but low enough to let small businesses participate. The lowest
levels usually begin at about $100 per year, and top levels can be as high as
$5,000 and more.
Membership attraction is a big job; but membership retention is equally
important. Many organizations pay a lot of attention to new members and
hardly any attention to current members. This is a huge mistake. It takes a lot
more effort to recruit a new member than it does to keep an existing member.
Members like to be noticed, and never tire of being thanked.
Grants from government – ACCBO, URA, and other programs
Many Pittsburgh CDCs are already Mainstreets or Elm Streets participants.
Thus, this toolkit will not provide detailed information on these programs.
State tax credit programs
Pennsylvania offers CDCs a very useful and unusual program. Details can be
found at http://www.newpa.com/find-and-apply-for-funding/funding-and-
program-finder/funding-detail/index.aspx?progId=94. This program is
described on the website as the “Corporate tax liability credit for businesses
that sponsor a neighborhood organization to develop and implement a
neighborhood revitalization plan by contributing a substantial amount of cash
per year over an extended period of time.” According to the site, the program
“Fosters the development of collaborations among business firms,
neighborhood organizations, local government entities and residents to
encourage high impact long term investments in distressed areas. Projects
must fall under one of the following categories: Affordable housing; education;
health and social services; community economic development; job training;
crime prevention; and neighborhood assistance.” To speak with someone
about this program, contact Cindy Gormley, Human Resources Specialist II,
at firstname.lastname@example.org,us. Her phone number is (412) 770-9038.
Grants from private sources
The Pittsburgh Partnership for Neighborhood Development, local foundations,
and corporations are potential sources for program and operational support.
The Carnegie Library Foundation Center is an excellent source of information
on potential grantors and the interests they have. To learn more about the
Center, go to http://www.clpgh.org/locations/foundationcenter/.
In many cases, foundations and corporate giving programs will require
differing approaches. Corporate giving is now more than ever linked to the
company’s mission. Simply papering the local foundation and corporate
community with proposals is a largely ineffective way to raise funds,
especially in this era of austerity.
Foundations and other major entities can be sources of another type of
funding – program-related investments or PRIs. Instead of making outright
grants, foundations and other nonprofits with sizable endowments can, with
certain restrictions, make loans with concessionary terms to help community
Contracts for service with City/County (e.g., parking management)
Many business districts throughout the US are now contracting to carry out
certain city services, such as street cleaning and parking management. More
than a half dozen downtown organizations now manage the municipal parking
system. Examples can be found in Kalamazoo, Boise, Boulder, Tempe,
Nashville, Memphis, and Schenectady. Numerous BIDs in downtown districts
routinely carry out tasks like garbage removal, snow removal and sidewalk
maintenance under contract with the city government. In San Antonio, a
private nonprofit maintains the city’s central plaza.
Contracts with other entities
As NIDs begin to take on tasks such as snow removal and maintenance of
sidewalk planters, opportunities may arise to contract with private entities to
extend services through contract work. For instance, a bank may agree to
contract with the NID to plow its parking lot or water and care for planters in
front of the bank. This is not only an opportunity to make money on contracts
but also an opportunity to hire a neighborhood-based company or individual.
In Kalamazoo, when the downtown organization took over management of
the city’s parking system, some other entities – the public library and some
office building owners – decided that Downtown Kalamazoo inc. could do a
better job managing their parking lots as well, for a fee.
Real estate development/ownership
There are many examples in Pittsburgh of CDCs partnering with other for-
profit and nonprofit developers in real estate deals. Basically, these deals are
beneficial to the developer because the CDC is able to bring certain kinds of
assistance (lower-cost financing, advocacy) to the deal; and in turn, the CDC
can participate in the developer fee, in cash flow from the project, and in the
proceeds of sale or refinance. East Liberty Development, Inc., the North Side
Leadership Conference or its subsidiaries/affiliates, and South Side Local
Development Company are among local organizations that have developed
real estate or participated in real estate development. However, caution and
prudence are called for when entering into real estate development deals.
These do not always make money, and CDCs can lose both large amounts of
staff time and occasionally money as well if deals go bad.
Real estate leasing
Another possibility for CDCs to profit from real estate is to become a leasing
entity. In communities that are considered blighted, and for that matter, in
many neighborhood commercial districts, it may be difficult to get
conventional real estate brokers to aggressively pursue tenants. The reason
is simple. It often takes less work to place a tenant in a large suburban office
or a suburban shopping center than in a neighborhood commercial district,
and the suburban or downtown office or retail spaces are usually much larger,
meaning that commissions are consequently larger.
In the mid-1980s, ELDI created a partnership with a commercial broker,
licensed its own employees, and began actively leasing space in East Liberty.
This proved successful and both ELDI and the broker made money, as did
the licensed agents, who earned commissions.
Sponsorships are a frequently used, and frequently misunderstood source of
funds. Many nonprofits approach potential sponsors thinking mostly of the
benefits to the nonprofit organization, not about the benefit to the sponsor. It
is often possible to obtain small-to-modest contributions from sponsors who
simply wish to support what they consider a community betterment project;
but in order to secure large sponsorships, the CDC or nonprofit organization
must understand and appeal to the self-interest of the potential sponsor.
Sponsorships offer a number of potential benefits to sponsors. A well-placed
sponsorship can provide better visibility than paid advertising in a setting
where the sponsor is thought of in a positive light. It can provide direct access
to customers the sponsor wants to reach, including other businesses. It can
establish a positive relationship with an organization that might return the
favor at a later date.
If there is a magic formula, it may be this one:
o Begin by securing a pro bono service contract with an effective
public relations agency, one that has excellent relationships with
local media and one that can benefit from being a prime sponsor for
the CDC and its events.
o Develop a sponsorship plan in conjunction with the PR agency, and
produce high-quality collateral materials.
o Secure if possible a prominent local businessperson as chair of the
o Use the PR agency’s media contacts to secure media sponsors –
print (newspaper and magazine), radio and TV.
o With media sponsors in hand, use the committee chair to sell
major-level sponsorships to major corporations.
o Sell mid- and lower-level sponsorships based on the credibility and
cache of the media and corporate sponsors.
This formula works for “signature” type events. Most CDCs can organize one
of these each year, hopefully one that can be repeated year after year. The
event should be unique, classy, and should have at least regional appeal. An
event with especially strong qualities and visual appeal might end up on the
local evening news, and if it’s really good, might even make the network news
There are many reasons CDCs undertake events and just as many reasons
they are reluctant to do so. Events can, first and foremost, raise money.
Events can provide visibility for the organization and its programs, and can be
an effective means to recognize the CDC’s leaders and contributors.
However, events are almost labor-intensive, can also lose money, and are not
normally part of the CDC’s core mission.
Nevertheless, events should be seriously considered as part of the total CDC
funding package. But before an event is planned or undertaken, be sure to
read the Philanthropy Journal article by Carol Shaw listed in on-line resources
(Mantra for Special Events: Always Make Money). To find our more, go to:
o Ten events that almost always make money
Award luncheons, dinners, and ceremonies
The key to making these work is establishing a hard-working
volunteer committee with a strong leader and charging
enough to cover the food, beverage, and other costs.
Once again, like an award dinner (and consider combining
the dinner and the auction) the key is finding good
volunteers to run it. Getting intriguing items donated for
auction (the more imaginative the better) helps
Farmers markets are especially popular today. They support
healthy eating, local agriculture, and carbon footprint
reduction. Farmers markets range in size from a few vendors
on a parking lot to a major event that can draw more than
250,000 people annually. Farmers markets can be
moneymakers for CDCs, if they are designed and managed
with fundraising in mind.
The first and most important decision a CDC wishing to
create and manage a farmers market must make is to
determine the primary character of the event. Some might
wish to create a “green grocer” for the neighborhood. Others
might see this as “community-supported agriculture”
benefiting local farmers.
However, in order to become a significant fundraising event,
it is necessary to view the market as a major event. This
requires a full schedule (normally from May to October,
when locally grown products are available); a commitment to
building a large event with not only locally-grown produce,
but prepared foods, and possibly crafts; regular
entertainment; a strong sponsorship program; and media
coverage. A very good model that consistently covers its
costs and makes a substantial profit is the Des Moines
Farmers Market (called by one report “the social event of the
Flea Markets/Antique Markets
Other markets, such as crafts and art markets, antique
markets and flea markets can benefit from the same model
as successful farmers markets. Some of the important points
to consider with any market are; regular schedule; location
(preferably right on the business district’s Main Street, not on
a remote parking lot); control over vendors; inclusion of food
and music or other entertainment; sponsorships; and media
Concerts (selling alcoholic beverages)
Concerts can be significant fundraising events and can bring
people to the business district in the evening hours, but must
be managed carefully. The profit in most community
concerts is generally found in the sale of alcoholic
beverages. CDCs considering concerts as fundraisers
should examine carefully the noise that such events
generate; the trash and litter that must be cleaned up after
the event; liability issues with alcohol sales; and law
enforcement/security issues. Carefully managed, concerts
can be a significant revenue source. Done poorly, they can
be a costly headache.
Food fests (competitive BBQ cook-offs for example)
Food events offer a CDC an excellent opportunity to
highlight the ethnicity of the community, and well-organized
food events can be moneymakers – with the added plus of
drawing thousands of people who might otherwise never visit
your business district. “Taste of” events are a tried and true
showcase of the area’s restaurants. There are other
possibilities, such as becoming the Pittsburgh location for
national events like the variety of rib cook-offs
(http://www.berearib.com/ribbers.php). These not only
feature national ribbers, but also can offer local rib joints an
opportunity to compete against one another and against the
national ribbers. These are great family events, and are
likely to attract media and corporate sponsors.
Sports competitions (3 man/woman basketball)
Street basketball reached its zenith a few years ago but is
still popular. One example of a company that organizes
these is ZogSports:
591273) These organizations typically provide everything
from baskets and balls to rules and marketing materials.
They always identify a local charity (which could certainly be
the CDC or one of its projects). While the lion’s share of the
revenue generated by these tournaments goes to the for-
profit company, the company also does most of the work,
and has the template for the CDC sponsor to follow.
Walks and Runs
Like many other events, walks and runs require a substantial
amount of volunteer work. This requires management time,
and for a small CDC or Mainstreets organization, sharing an
events manager with other CDCs or hiring a for-profit
consultant to organize and manage these events could make
sense. At the outset, the question that must be answered is,
“Are we doing this as a fundraiser, or for other reasons? And
if we are doing this as a fundraiser, is this a cause people
care enough about to participate and donate?” Several
organizations hold “walks for the cure” because diseases are
literally a global problem and participants can and will come
from all over to participate. The revitalization of a particular
central city community may be a worthy cause in that
community, but of little interest to people in the suburbs.
Walks and runs have also become a bit “old hat.”
Nonetheless, these events can make money if well
conceived, well promoted, and well organized.
For raffles to make enough money to be worth the effort, the
organizers either have to sell a lot of tickets at a very
affordable price, or a relatively few tickets at a high price.
One raffle that can produce $10,000 under the right
circumstances depends on having a very attractive prize or
prizes (a new car, a flat screen TV) and a limited number of
tickets at a high price. For example, if the raffle organizers
commit to selling only 400 tickets at $100 per ticket, and the
first prize is a new car valued at $20,000, with attractive
second, third and fourth prizes as well, the ticket purchaser
has a 1 in 100 chance of winning, and the CDC could net
$10,000 to $15,000 or more, especially if a dealer will donate
Conferences, seminars, education luncheons
Establishing a regular series of luncheons with an excellent
lineup speakers, or an annual conference or seminar can be
an effective way of earning additional income while
educating constituents on the various issues facing urban
communities. Unlike award dinners and similar events, these
events make money because they provide value – an
opportunity to hear a well-known and effective speaker, or
learn about an important topic.
o Key steps in developing a fundraising event
Many nonprofit organizations violate the cardinal rule of events –
deciding to do an event without a vision, a goal and a plan. Some
events occur because “our chairman thought it was a nifty idea.”
Some occur because “we had a gap in our budget, and the event
seemed like a good way to fill it.”
Like most other things in life, a great fundraising event starts with a
vision and a plan. Events take a great deal of motivation, energy,
and time. In order to achieve success, CDCs considering a
fundraising event should follow the steps outlined below:
A shared vision. Once the CDC decides to do a fundraising
event, what is the compelling vision that will keep staff,
board members and volunteers motivated throughout the
long and arduous planning and implementation process?
What about the vision makes this so attractive and inspiring
that hundreds or thousands of people will want to
Understandable goals. How much money do we intend to
make? Do we want people to have a different and more
positive perception of our business community and our
organization as a result of the event? Do we want to attract
new volunteers, new investors, or new residents? Identifying
a few (as few as two or three, but not ten or twenty)
overarching goals will keep everyone on track.
Specific objectives. Under each goal, event organizers
should list measurable, time-specific objectives. (Example:
Six months prior to the event, we will have 90% of the
A matrix showing individual responsibilities. Everyone
involved should know what they have to do, by when, and
should be held accountable.
A detailed timetable. Staying on course time-wise is
essential. Start with the day of the event and work
backwards to determine by what time various tasks need to
be started and completed. Project planning software can be
extremely useful in keeping the event planning on schedule.
A detailed budget. Many events are successful in lots of
ways, but lose money. This is addressed in Carol Shaw’s
article referenced elsewhere in the Toolkit.
A post event plan. Make sure not to neglect thank-you notes
and calls to everyone – staff, board members, volunteers,
sponsors, media folks, and others who contributed to the
success. And let the public know the event was a success.
They will be more likely to return the next time.
A post-event evaluation. Many organizations just look at the
bottom line and never ask themselves what went right, what
went wrong, and what we should do differently next time.
This evaluation should include outreach to sponsors to see if
their needs were met.
Loyalty cards, gift cards, and other promotions
An old idea, loyalty programs are now being fueled by technology and can be
a boon to businesses as well as a moneymaker for the CDC coordinating the
program. Loyalty cards may be issued by individual retailers, but some
downtown organizations like Downtown Sioux Falls (http://www.dtsf.com/)
have aggressively pursued card programs. The programs allow merchants to
learn more about their customers, likes and dislikes, and can therefore tailor
special offerings to that individual customer. CDCs that sponsor loyalty and
gift cards can strike deals whereby the CDC receives a cut of the revenues
generated by the program. To learn more about these programs, explore the
websites listed below.
Partnering with corporations
Some local corporations might see CDCs as a worthy cause. Below is a
description of a partnership fundraising program between CSM Corporation
and Hope for the City (HFC). It combines an enjoyable time, a contribution for
a good cause, and an opportunity to buy certain items at reduced prices.
o CSM Corporation hosted the Second Annual Shop and Sip to
benefit Hope for the City on Thursday, November 12th from 5:00 to
8:00 pm. Hope for the City (HFC) is a Minnesota-based non-profit
relief organization that was established to fight poverty, hunger, and
disease by utilizing corporate surplus. They collect overstock
products from top retailers, medical companies, and food
distributors nationwide and donate the items to people in need in
Minnesota and throughout the United States. They have had
incredible success leveraging charitable dollars. For every $1
donated, HFC can distribute more than $35 worth of important food
and medical resources for those in need. The event will be held at
CSM’s corporate office in downtown Minneapolis, 500 Washington
Avenue, Suite 3000. It features wine and beer vendors who will be
showcasing extraordinary holiday wines and offering tastings, as
well as a sampling of tasty hors d’ oeuvres. Those who attended
last year’s event found fantastic deals on giant screen TVs, home
theater systems, lawn equipment, and home services such as
window watching, painting and cleaning. For further information go
Cash management and investment
One of the often-overlooked ways of making money is careful cash
management. Many nonprofit organizations today keep substantial amounts
of cash on hand in checking accounts or low-interest savings accounts. But
often in community business districts, local financial planners may be willing
to lend their expertise to CDCs – and this is the equivalent of free money. It
means that the CDC’s bookkeeper has to more frequently watch bank
balances and interest rates, but careful cash management can add anywhere
from a few hundred to several thousand dollars to the bottom line each year.
Deferred giving programs are usually the province of universities, hospitals,
museums, and other big institutions – but there is no reason why a CDC
could not work with the local community foundation to establish a deferred
giving program, where residents and business owners donate cash or real
estate to a fund at the foundation, available to the CDC at the time of their
death. This is a program that can build over the years – very little return in the
short term, but big potential payoffs longer term.
Several years ago, for-profit subsidiaries were all the rage among nonprofits.
What most nonprofits didn’t realize is that running a successful for-profit
business takes a different mindset. Many also tried to load social goals on top
of the struggling for-profit subsidiaries they created, further making failure
likely or inevitable.
In the mid-1980s, ELDI created a retail store on Penn Avenue called the
Showcase Outlet Center. This 6,000 square foot retail store arranged to sell
tabletop goods – glass, crystal, china, pottery, cookware and silverware – at
deep discounts. Inventory was obtained on consignment directly from
manufacturers in Ohio, West Virginia and Pennsylvania. ELDI borrowed
$200,000 in working capital from a state program and a bank CDC.
Sales in the first few months were reasonably, but flaws in the business plan
were soon discovered; and by the time they could be corrected, ELDI had
burned through all of its cash and had to close the store. The state loan was
forgiven, but the bank CDC loan required some time to repay.
Many lessons were learned. Among the most important: Nonprofit
management and for profit management are related but not the same. Putting
a new business in a struggling business district increases the risk of failure.
Working capital is always a major issue. And finally, do not try to load social
goals onto a business, no matter how important and worthy those goals might
For profit subsidiaries can work – if the CDC is in a business it understands,
is in the business to make money (after all, that’s what “for profit” means!) has
the right location, the right staff, and sufficient working capital, and has
developed a strong business plan.
Sharing resources with other CDCs and Main Street programs
Discussions have taken place from time to time between CDCs concerning
sharing staff and other resources. This is an idea with some potential, but it is
also one that needs careful thought. If CDCs decide to share a staff person,
for example, who supervises that person and who decides how his or her time
is spent? It may be better to have a shared staff person than paying for a full-
time person when you really only need a half-time person, but it may also be
cleaner and easier to develop two contracts with the same person and allow
them to function as an independent consultant.
Money Making events:
Society for Nonprofit Organizations Fundraising Guide