The Chronicle of Philanthropy – The capital-campaign solicitation runs 54 pages, with small type that begs for a magnifying glass. Charts unfurl under the heading “Key Metrics.” Recipients are invited, not to donate, but to purchase a “partnership unit.”
As unorthodox — and dull — as this document might sound, it captures a fundraising precept for one of the fastest-growing charities in America: Donors are investors and should be treated as such.
Year Up, which provides career training and corporate internships to young adults in cities, raised $67 million in 2015 — more than double what it collected in 2014, and enough to put the organization, for the first time, on The Chronicle’s Philanthropy 400 list of the biggest U.S. charities. Just 16 years old, the Boston-based group is reminiscent of Teach for America, whose embrace of the unconventional after its 1989 launch helped spur its growth from unknown to brand name.
Year Up’s third capital campaign is underway. Each has been billed almost as a public offering of company stock, with donors recruited to fund the next five years of the organization’s growth. Details of the planned growth are outlined in a “prospectus for philanthropic investment,” that long, eye-straining document that bucks the conventions of campaign solicitations.
The prospectus features a few glossy photos and occasional testimony from a Year Up alum. But its heart is a pitch for donors to back the organization’s next phase, documenting its plans and impact.
In the prospectus for its second campaign (see below), Year Up told donors that it aimed to nearly double the number of students in its year-long program; design new ways to expand services in order to reach as many as a million students; and increase advocacy. The first page of the prospectus asked donors to consider buying “partnership units,” at $1 million per. One section focused on the risks that could derail its expansion.
This Wall Street-type approach is a natural for Year Up, whose founder and CEO, Gerald Chertavian, earned a Harvard MBA and founded a technology and software company before starting the nonprofit. Its corporate partners — which pay to hire the organization’s students as interns — include Fortune 500 companies such as JPMorgan Chase and American Express.
The prospectus is not too different from how a little-known startup company might pitch investors, says Susan Murray, the organization’s national director of development. “We found it was a clear way to show why you would bet big on a nonprofit of Year Up’s size,” she says. “We’re not that old, and we’re not a household name.”
The document states clearly that a donation will net only psychic income, not real profit. “There’s no return on investment except that you helped fund a great nonprofit,” Ms. Murray says. “But we found it works with our investor community.”
The group’s second campaign closed in 2013 after raising $57 million. Its current effort, which has a $200 million goal, is still in the quiet phase but has netted the first three gifts of $10 million or more in the organization’s history.
See the prospectus from Year Up’s second campaign.
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