Donor Migration: North
June 15, 2007 Mark Hrywna
Tom Riggs points to the hurricane season of two years ago as the moment when he really noticed people moving out of Florida.
Riggs is president and CEO of Directions for Mental Health, a 25-year-old, $12-million nonprofit in Clearwater, Fla., about 25 miles outside Tampa/St. Petersburg. He concedes that mental health is always a difficult funding environment in which to operate, but lately it’s been even tougher. “The last couple of years has been an acceleration of that trend.”
It’s difficult to attract and retain staff because the vast majority of multi-year grants are fixed in dollar amounts and service levels, Riggs said. “It’s understandable from the grant source,” he said. The problem is when costs go up significantly for insurance and taxes, there’s no comparable room to increase staff salaries, making the organization less competitive with the general market.
Riggs had one staff member who left for a comparable job in North Carolina. Had she stayed in Florida, Riggs said, the employee feared she might lose her house to skyrocketing hurricane insurance and property taxes. And he couldn’t offer a 20- or 30-percent salary increase to cover her rising costs. “When she factored in the state income tax in North Carolina, she wouldn’t be making any more money but the cost of living in terms of property ownership was significantly easier for her to manage,” Riggs said.
Jo Bull, associate director of the South Carolina Association of Nonprofit Organizations, sold her home near Fort Lauderdale almost three years ago, leaving her job as vice president of programs at a community foundation. Though she would have moved to South Carolina anyway because of her grandchildren, the difference in the cost of living did not go unnoticed. “The cost of living is less here, mostly in the cost of homes, taxes,” she said, although with the lower cost of living came lower wages, “so it was kind of even.”
Peggy Calhoun, ACFRE, of the Fort Lauderdale-based fundraising firm Miller, Calhoun and Co., said it’s getting difficult to attract fundraising professionals to Florida. She recalled one woman who moved from South Florida to Georgia to work for the American Red Cross in Atlanta because she could afford a home there.
The Greater Miami Jewish Federation (GMJF) is raising more money each year, but struggling to maintain the same number of donors. “We’re trying some creative technologies, including a new focus on online giving to maintain and build the number of giving units. But also putting a significantly increased effort on major gift solicitation and cultivation,” said Jacob Solomon, executive vice president.
Planned giving is accounting for more of the organization’s total annual revenue as well, Solomon said, more than one-third today as compared to years ago when the annual campaign provided the vast majority of funding.
“What’s interesting is the people continuing to come to Florida are those with much more disposable income,” said Bob Carter, president of fundraising consultants Ketchum. Along the coast, middle-income residents are being pinched out and replaced by a higher wealth population, creating a “whole new wave of potential philanthropists” who were significant in other parts of the nation.
Meanwhile, those residents leaving are what Carter called “half-backs,” moving halfway back up the East Coast to places like the Carolinas. “It’s an interesting exchange of demographics.”
With the red-hot real estate market, and accompanying taxes, Carter suggested talking to donors about making a gift of real estate. People on fixed incomes, whose heirs don’t want to pay the high property taxes, can get the house out of the estate by gifting it to a charity, like a charitable gift annuity. “The tax position people are in, they’re better off giving away their residence and taking life use rather than trying to maintain taxes on the property. That’s one of the things nonprofits need to begin to capitalize on,” he said.
While many agree the cost of living is high in Florida, some aren’t convinced that it’s driving residents from the Sunshine State. It could be that the state is still growing, just not at the pace of the last decade. Or it might just be that statistical data haven’t caught up with any recent trends.
U. S. Census figures show Florida’s population up 13 percent between April 2000 and July 2006. The growth rate for 2006 slowed to 1.8 percent, according to numbers released late last year. According to the National Center for Charitable Statistics, Florida’s human services nonprofits have grown as fast or faster than in nearby states like Georgia, Tennessee and the Carolinas. Moving donors might be being replaced by those who need services.
One sign that more people are leaving Florida might come from Allied Van Lines. Its annual Magnet States Report recorded Florida as the leading outbound state with 8,894 outbound shipments compared to the 6,953 heading into the state — a net relocation loss of 1,941. If population is moving out of Florida, demographers point to South Florida while Central Florida appears to be growing.
“We’re such a young community. We don’t have the longstanding foundations that they have in the Northeast or Chicago, or even the Northwest. We haven’t had a large population here long enough,” said Emily Furlong, senior program manager at the Philanthropy and Nonprofit Leadership Center at Rollins College in the Orlando suburb of Winter Park.
Central Florida especially continues to have a huge growth rate, adding 1,000 people a day, according to Mark Brewer, president and CEO of the Community Foundation of Central Florida.
When residents don’t have roots in a community, it can be difficult to raise money, and growth creates more issues of people connecting to their community, Brewer said. “It’s kind of a transitory environment, which creates issues for us,” Brewer said. “We’ve been trying to create a middle class in Florida for several generations.”
Gary Cain, president of Orlando-based Boys & Girls Clubs of Central Florida, said the donor base and development growth hasn’t kept pace with “the need or influx of new business that enters the community.
“We’re working harder to identify and connect with individual donors,” he said. The national organization established the Jeremiah Milbank Society in 2004 to recognize $10,000-plus donors, of which the Central Florida affiliate has eight. Cain believes they can double that number or more. “I think there’s a lot more potential. Part of the challenge is also we’re doing capital campaigns.”
Robert H. Brown, president/CEO of the Heart of Florida United Way covering Osceola, Orange and Seminole counties, hasn’t seen any effect on fundraising, as the most recent campaign closed in March, generating $17 million. He worries the cost of living might cause some people to fall through the cracks, especially with the state legislature poised to cut property taxes during a special session in June. “There will be some relief, but it concerns me for a different reason. If local municipalities lose revenues, historically the first things that suffer are non-mandated items, including social services.”
Where Floridians are moving to isn’t exactly clear. The Bureau of Economic and Business Research at the University of Florida has information on why people move to Florida, but not why they move out. The latest state-to-state migration flows available from the Census are from 1995 to 2000. Among the top 20 largest were Florida-to-Georgia and Florida-to-North Carolina. In the opposite direction among the top 20 were New York, New Jersey, Georgia and California into Florida.
Judging by the number of new business permits awarded in recent years, Drew Johnson, president of the Tennessee Center for Policy Research, sees a business climate that’s drawing people. The Volunteer State’s most attractive benefit to wealthy retirees is the lack of a personal income tax, like Florida, with the low cost of living of the Carolinas and Georgia, said Johnson. “Add the two together, plus the benefit of an income tax-free state, and that’s really helping drawing retirees, stimulating business growth statewide, and increasing the population.”
Lewis Lavine, president of the Nashville-based Center for Nonprofit Management, sees a strong migration into Tennessee. “People are coming from everywhere,” he said, noting that the state has one of the largest Kurdish populations outside of the Middle East, and rising populations of Hispanics and Laotians.
There’s no question people are going to North Carolina, now the 10th largest state in the nation. “We’re definitely seeing demographic population shifts here,” said Trisha Lester, vice president of the North Carolina Center for Nonprofits. Nonprofits have been called on to serve people in the community in a more visible way, she said, due to changes like the decline in manufacturing.
“The reality is, as any place gets popular, the costs rise. People moving here might find it cheaper, but the fact is, overall, costs are increasing,” Lester said. It’s too early to see what the new demographics might mean for people’s giving patterns. “Will they hold on to their favorite organizations or will they become part of the community and start giving to organizations in the communities they’re living in?”
North Carolina’s Latino population in particular has exploded, rising by almost 400 percent since 1990, also sparking growth in nonprofits that serve Latinos.
“The situation has become much more difficult and expensive for the work we have to do,” said Angeles Ortega-Moore, executive director of the Charlotte-based Latin American Coalition. It’s a challenge of both culture and language for nonprofits, as it takes more than just a weekend Spanish class for employees, she said.
In addition to the influx of Latinos, North Carolina is aging. New residents are retiring there but even those already in the state are aging. Ran Coble, executive director of the North Carolina Center for Public Policy Research, points to the portion of the state budget for Medicaid, which has doubled during the past decade.
Latino nonprofits can be found in the growth corridor between Raleigh and Charlotte but also in the rural counties, where a high concentration of specialty employers like poultry or pickle manufacturers rely on Hispanic populations. “You’re seeing nonprofits crop up in those communities as well,” said James H. Johnson Jr., director of the Urban Investment Strategies Center at the .
North Carolina is projected to be the seventh most populous state by 2030, said Nancy Preston, outreach coordinator for the North Carolina Coastal Land Trust in Wilmington, about 70 miles north of Myrtle Beach, S.C. People come from all over the country, she said, but Floridians might be looking to get away from the cost of living and a sense of overdevelopment.
“I think we’re in danger of loving these places too much,” Preston said. “Everyone I talked to moved to North Carolina because they love the beach, the natural state of it, but if everyone keeps on coming, you get more and more sprawl and you lose that.”
Paul Kane, senior vice president at the UJA-Federation of New York, is familiar with migrating donors, as Florida is known for being full of former New Yorkers. He estimates 100 to 200 members move to Florida each year. That’s why the New York federation hosts two events each winter, in Boca Raton and Palm Beach, “to remind them of their New York roots.” One event is a high-end, one-on-one approach that raises $1 million each year, while the Boca Raton gathering is more a community event.
Said Kane: “We try to stay in touch with donors. Like any good fundraiser, you don’t want to be out of touch.” NPT