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For New York's nonprofits, it's showdown time.
Caught between a rock and a hard place, the city's social service providers and cultural institutions, reeling from recent declines in government funding, are also finding private donations much tougher to come by.
For their very survival, nonprofits are boldly trying to forge new alliances with funders and collaborations with other nonprofits. A number are experimenting with creative marketing techniques--from offering enhancements to corporate sponsors to selling proprietary products--in order to plug budget gaps.
Most are focusing their missions more precisely and diversifying funding sources, even asking users to pay something for services where possible.
"Creativity is really the buzzword here, in regard to how a nonprofit positions itself in hard times," says Patricia Caesar, chairman of Caesar & Washburn Inc., management consultants to nonprofits. "The same marketing techniques apply as in private industry. The competition is really stiff out there."
As well, they're asking more of stalwart donors, boards of directors and volunteers. "People who were giving one portion of a day a month, we're now asking one day a week," says Robert M. Bender Jr., who is the chief executive of the American Red Cross in Greater New York.
The rewards for new strategies can be great. For despite the aura of grim times, "a lot of nonprofits are getting more quiet money than before because of social service needs," says Ms. Caesar. "A lot of people are not hurt (by the economy)."
That's the case at the 106-year-old University Settlement, which works with families on the Lower East Side. "We've raised more private funds this year than in past years," says Michael Zisser, executive director of the organization, which lost $400,000 in city contracts in the past two years. "Our budget is larger now than when the recession started."
By using contract money more effectively, such as sharing staff positions across contracts and leveraging private money, Mr. Zisser has created program linkages. For example, the Settlement's mental-health clinic now serves older adults, runaway children and formerly homeless people. "It's different than asking a foundation to set up a program," he notes.
However, arts institutions feel they're losing out in a triage with social...