One On One

Mark Hierholzer

Former CEO, ChildSavers

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Children's Voice spoke with Mark Hierholzer, who served for 25 years as the CEO of ChildSavers, a Richmond, Va.-based child mental health nonprofit agency.

What are some of the specific funding problems facing human services and child welfare agencies?

All public funding streams are subject to the political process, both at the state and federal level. The economy has intensified this process as available public dollars have shrunk.

At the federal level, CWLA has had to intensify its efforts to simply keep funding streams for child welfare programs on a level playing field during a very challenging budget process. Prospects for increased funding for programs are simply not there.

In Virginia, the economic downturn has increased the number of unemployed, homeless and poor people who are now accessing a broader array of public assistance services. At the same time, state revenue has decreased. Because Virginia has already exhausted many of the easier ways to balance the budget over the last biennium (shifting money in the budget, delaying contributions to state trust funds, tax adjustments, etc.), the state has come to an unavoidable budgetary crossroads.

According to The Commonwealth Institute for Fiscal Analysis, Virginia is facing a budget reduction on the scale of $800 million to $1.2 billion over the next biennium. In the face of this, Governor Robert McDonnell's new budget calls for cuts averaging 1.2 to 2% in most state agencies. For health and human services, the cuts will be more like 4% to 8% (the Comprehensive Health Investment Project, or CHIP, will lose 50% of its state funding in year two).

Child welfare agencies will be forced to look at alternative strategies to remain viable--such as increasing fees for service, reducing costs, creating new operational efficiencies, engaging in strategic partnerships, and fundraising.

What factors have been impediments to advocacy funding in the past?

Private child welfare agencies, most of which are nonprofit organizations, have allowed themselves to be seen as part of the "public" system of services and have not taken the initiative to define themselves as separate community assets with unique services and opportunities. Because most have experienced stable public funding streams, they have not developed their capacity to seek and acquire funds from the private sector. CWLA has always focused its advocacy efforts on the political process, using its membership to intensify lobbying with elected officials.

How have ChildSavers's management tactics worked to combat these challenges?

During the mid-1990s, ChildSavers faced a crisis in its two primary funding streams: United Way Services and Medicaid. The William Aramony scandal impacted the ability of United Ways across the nation to raise money in the workplace, and annual allocations to community services were reduced over several years. HMOs entered the health insurance market to control costs and severely reduced fee reimbursements for Medicaid funded services in Virginia. The only way to effectively plan for a future was to develop the agency's capacity to write grants and solicit funds from individuals. Today, ChildSavers has a $4 million budget and raises 50% of its operating costs through private philanthropy. This fundraising capacity has enabled the agency to create new programs in response to the growing needs of children and to sustain traditional services. It has also connected the agency to the surrounding community in a positive and dynamic way.

What are the better options for advocacy funding, moving forward? How can the ChildSavers model be applied to other organizations and individuals?

First, we need to recognize that private philanthropy may be the best strategy over time to sustain and grow the core services of child welfare agencies. CWLA should build fund development and fund raising workshops into its annual conference offerings and encourage agencies to open these conversations with their boards, volunteers and staff.

Moving an agency that has operated in a public funding culture toward one that effectively engages in private philanthropy is a daunting process that impacts the organization at all levels. It requires a fresh approach to the agency's mission and the development of an engaging and inspiring relationship with the private community. It requires the CEO to develop new skills, the board to attract a new kind of volunteer, and staff members who have traditionally kept their work private and focused on the client to be willing to find ways to share their work with the community.

The sooner child welfare agencies begin to address this needed transformation, the better they will fare in the new economy. Even if the Affordable Care Act releases new types of funding for health-related services, those funding streams will be strictly controlled and will still not reach all the people in need. To be responsive and effective, child welfare agencies will need to be able to access privately raised, unrestricted monies to support and sustain vital services.

You've recently moved on from ChildSavers and started your own consulting firm. What will its focus be, and how will it relate to your prior work?

On July 1, 2012, I opened a consulting practice aimed at assisting nonprofit organizations who are seeking to increase their capacity to raise money in the private sector. My focus is on CEO development, board engagement, and the recruitment and hiring of effective fundraising staff leadership.

My consulting draws on my 25 years of experience as CEO of ChildSavers and my work in developing this small outpatient treatment practice into a highly visible, sustainable child mental health organization. ChildSavers now serves more than 1,000 children and their families each year in its clinical programs and impacts another 11,000 children through its child development training and support programs for child care providers, teachers, youth workers, and mental health practitioners. Today, ChildSavers raises $1.5 million each year from private philanthropy.

Please visit Mark Hierholzers website, www.hierholzer.net, for detailed information on his consulting services.

To comment on this article, e-mail voice@cwla.org.

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