After spending several months working to climb out of bankruptcy in 2014, the YMCA of Metropolitan Milwaukee has hit another financial hurdle this year: Reaching the $3.8 million fundraising goal it set upon exiting bankruptcy at the end of January.
To date, the organization has collected about $1.5 million from every sector of the community, including individuals, corporations, foundations and members, according to Julie Tolan, president and chief executive officer of the Milwaukee Y.
If the organization does not achieve its fundraising goal by its Dec. 31 deadline – when its fiscal year ends – it will have to reevaluate what it will look like in the future, according to Tolan.
The organization will have to look at whole costs and programmatic changes to ensure that it is sustainable going forward, Tolan said.
The Milwaukee Y’s fundraiser is an “integral part” of the new business model it adopted to regain financial health after bankruptcy, according to Tolan.
The organization filed for Chapter 11 bankruptcy in June 2014 under the weight of $30 million in debt. To recover from bankruptcy, the nonprofit devised a dramatic restructuring plan that included refocusing the scale of its mission, selling off 70 percent of its owned real estate assets and reconfiguring its revenue streams.
Philanthropy now accounts for 20 percent of the organization’s sources of revenue, up from 10 percent under its old model.
Another 30 percent of the Milwaukee Y’s revenue is generated by membership – down from 50 percent under the former model – and dollars from programming now cover 50 percent of revenue, up from 38 percent.
Within its focus on philanthropy, the nonprofit set what it deemed a reasonable and feasible fundraising goal and one equal to the fundraising figures of past years, according to Tolan.
The organization decided to try to raise the same amount of money that it did before entering bankruptcy, she said, as it was confident that it had the trust of the community at that level.
Why the Milwaukee Y has struggled to attract donations is confusing – “truly confusing” – to Tolan, who asserts that it had made leaps with its mission impact this year.
“I feel so strongly that now, more than ever, the impact we’re making is stronger and more relevant to meeting the critical needs of our community than it’s ever been,” she said.
Tolan points to the launch of two new programs in 2015 as key indicators of mission success – Milwaukee Swims, which has taught more than 1,000 people how to swim for $5 per participant, and Camp FLY, a summer program that helps kids develop character and leadership skills while avoiding the academic slide.
“From our perspective, we are sticking to what we do really well and responding to the community’s needs and working with other organizations to do that,” Tolan said, emphasizing that the organization has significantly narrowed the scope of its programs.
The nonprofit leader’s confusion on why campaign donations have yet to pour in also stems from the success of the nonprofit’s earned revenue model as it accomplishes its strategic membership goals.
“Now, more than ever, we are worthy of the community’s support at this level,” Tolan said.
Though it’s too soon for the Milwaukee Y to understand exactly why donations have lagged, Tolan said, she speculates that one reason might be related to a public misunderstanding that the organization’s emergence from bankruptcy solved all its problems.
“People thought that’s all we needed to do,” Tolan said.
While the exit from bankruptcy certainly helped the organization solve many of its problems, what it really did was give the organization “a chance,” Tolan said.
“That was an important step, but it was only the beginning,” she said.
Tolan also guesses that potential donors could be waiting to see if the organization can sustain itself before investing in its cause – now largely framed around its centers, early childhood education program, its swimming program, youth camps and Healthy Communities initiative.
“People are just waiting to see if this works,” she said. “They want to commit to us once they know it’s going to work, but because philanthropy is an integral part of our business model – it’s not frosting on the cake for us – if too many people wait to see if it works it won’t work.”
From its fundraising efforts conducted throughout the year, the Milwaukee Y still has several million dollars of requests on the table that have yet to be answered.
The $1.5 million currently in the nonprofit’s pocket primarily consists of individual donations under $50.
“What’s beautiful about that is we are truly a broad-based community organization,” Tolan said. “We are authentically supported by not just a few people but rather the base of our community, and so that’s an affirmation in our mission and the impact we’re having. But now what we’re looking to determine is will the rest of the community join us, and I mean that really sincerely.”
Tolan remains optimistic that the community can help the Milwaukee Y close its fundraising gap by year end and is seeking as many opportunities to talk to community groups as possible.
The organization does not have the luxury of time to extend fundraising as it operates with a break-even budget.
The pressure to cross the fundraising finish line mounts as more than 35,000 people across metro Milwaukee count on the organization’s programs.
“We will be less of an organization if this doesn’t work, and the people who need us most will be the ones who lose out,” Tolan said.
Campaign donations can be made at www.ymcamke.org or by calling 414-313-1646.
