A by-product of the Great Recession and the growing calls to restrain spending, governments at the state and local level are turning to traditional fundraising in a surprising number of ways. Of course, fundraising for public entities and services has happened for years, usually at arms-length via friends’ groups or foundations for state universities, libraries, parks and, increasingly, local schools. But as federal stimulus money ends and the economy continues its uneven path, state and local budgets remain embattled. Seeking private gifts, which are voluntary and convey the notion of marketplace approval, is a path increasingly being chosen or considered across the nation.

What Is Government up to?

Some government efforts are new and range from creative to questionable:

  • Mayor Sam Adams’ office in Portland, Ore., has an active presence on Kickstarter, the online gift aggregator specializing in funding local art projects. The mayor “is pleased to highlight a rotating selection of Portland-based projects,” because, the site says, Portland’s creative culture and DIY ethic “are a perfect match for Kickstarter.” It’s a case of local government as incubator, aggregator and champion.
  • Last year’s terrible floods prompted Gov. Bob McDonnell to establish the Virginia Disaster Relief Fund as “a permanent part of disaster relief tools.” Its website looks and acts exactly like any relief charity. It raised over $1.5 million for hard-hit Virginians, and asserts that the money is used in coordination with local relief charities as a “last resort” when other funds are simply not available. It’s a case of government presumably adding a tool to help in extraordinary situations.
  • Last July, the governor of Kansas famously abolished the state’s arts commission and vetoed all state arts funding, forming a new arts foundation charged with raising money as a 501(c)3. He ended up on the receiving end of such withering criticism that a few weeks ago, he quietly signed authorization for the Kansas Creative Arts Industries Commission—with arts funding returned to the state budget plus an income tax check-off box for individual arts gifts, just for good measure. This is a case of government trying a ham-handed strategy of simply dumping the arts funding problem on “the donor marketplace.”

Some government efforts, like the familiar income tax check-off boxes, seem to be enjoying more attention as budgets tighten. California’s Voluntary Contributions Fund shows how the process is evolving. Battling budget deficits, last year Gov. Jerry Brown signed a bill that directs the state Franchise Control Board to remove, at least temporarily, four options from the check-off contribution option (including municipal shelters for spay and neuter, ovarian cancer research and others) because they did not meet the required $250,000 minimum in public support. But he mandated the addition of several other funds, including those for the arts, ALS/Lou Gehrig’s Disease research, child victims of human trafficking and the California sea otter. The directive also included tax credits for donating fresh fruit and vegetables to the state’s nonprofit food banks.

The California state controller may take up to two percent of proceeds, and the Franchise Control Board may take up to three percent. Donors may reasonably think that a total of five percent for administration, with zero fundraising costs, is not a bad deal. But it begs the question: What has been the impact of these efforts on the overall picture of voluntary support for the causes chosen?{loadmodule mod_banners,Newswire Subscription Plea}

California illustrates the struggle of governments trying to juggle hard budgets with community needs. It also reminds us of the assets government can bring to the struggle to fund those needs, among them comprehensive databases, the ability to call attention to community needs, and the power to give or withhold rewards and recognition.

What Do These Government Fundraising Efforts Have in Common?

Whether they occur on Kickstarter, television or your income tax instructions, there are four elements that the great majority of these efforts have in common:

  • They are for a fairly specific area or need.
  • They are for current needs, or what fundraisers would call annual giving. They help this year, not long-term.
  • It usually isn’t clear what stewardship or accountability can be expected. Nor is it clear what, if anything, happens to the database of transactions and donors, an asset fundraisers understand for analytic and targeting value.
  • They don’t seem to be aimed at building a group of loyal donors for follow-up, cultivation, bigger gifts or joining with like-minded people.

A comprehensive review of government programs is well beyond the scope of this article, and it could be that functions like transparent stewardship, reporting and savvy planning may be present in some government programs. Professional fundraising colleagues with whom I checked said they simply didn’t know. Perhaps it’s time to find out.

Where to Start? A Modest Call to Action  

We in the nonprofit sector don’t know enough about emerging or contemplated activities by state and local government. Let’s fix that with an inter-sector discussion, a national debriefing on the experiences—good and bad—of government-as-fundraiser. I believe both sectors, not to mention donors including our friends in the business sector, would welcome a strategic, high-level review of government charitable fundraising activities. Let’s organize cases in some meaningful way (e.g., response to emergencies, supplementing core operations like schools, replacing public funds, supporting new services, etc.). Then, together with government officials, let’s ask some key questions, including:

  • Where has private giving via government helped fund an otherwise unmet need—and where has it had little or no impact? Have government fundraising efforts helped increase the number of donors and donations in communities, or simply introduced yet another competitor with a zero-sum result?
  • When do governments see themselves as a “fundraiser of last resort?” When do they regard their fundraising as a kind of “lead gift,” drawing attention to a need they hope others will eventually take off their plate?
  • Do states or cities plan to adopt new fundraising strategies, and how are they advising their government colleagues? (I was struck by how often state and local governments meet, just like our sector, in conferences to compare experiences. See below.)
  • How do government agencies report the results of their fundraising and communicate the use of the funds? When acknowledging these gifts, is there an effort to direct donors to local nonprofit organizations able to provide more information or to connect donors with others sharing their interests?
  • In cases where fundraising for “current needs” has been successful, do governments plan to begin raising money for endowments or multi-year gifts? Are they willing to help promote nonprofits which do exactly that?
  • Is it time for the opinion researchers to look into government fundraising? What surveys or focus groups might help enlighten both sectors?

Such a national discussion should be hosted by an institution known for smart, disciplined and objective thinking—one with well-established relationships in both the government and voluntary sectors.

Who would participate in this inter-sector discussion?

The nonprofit community could be represented by Independent Sector or one of the various groups representing nonprofit CEOs and board members. The Council on Foundations and the Association of Fundraising Professionals should probably be at