Associated Press/ Dan Young/Marshfield News Herald

Double whammy

Economy | Needs are up and giving is down for nonprofits, but all is not gloomy

Issue: "2008 Daniel of the Year," Dec. 13, 2008

For many nonprofit charities, economic recession delivers a two-pronged stick in the eye. Rising unemployment swells need for services. And the tightening of bank accounts shrinks donations.

That combination adds up to bleak headlines splattering the pages of newspapers throughout the country: "Food banks can't meet demand." "Dip in donations endangering Boys and Girls Club." "More need help, but fewer give to charities."

The news got only worse last month with prominent nonprofits announcing significant administrative layoffs. Colorado Springs-based Focus on the Family let go 149 employees and eliminated another 53 unfilled positions, an 18 percent reduction in workforce. Susan G. Komen for the Cure, a group aimed at funding breast cancer research, trimmed staff at its Dallas headquarters by 16 percent. Smaller groups, like the American Lung Association and the National Domestic Violence Hotline, have made similar cuts.

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But amid such malaise, glimmers of hope shine all the brighter. World Vision, a global relief agency with an annual operating budget of close to $1 billion, surveyed nationwide charitable giving attitudes in the face of economic gloom. The results: Seven in 10 adults plan to spend less on holiday gifts this season, while half of those surveyed say they are now more likely to make charitable donations.

Too good to be true? Not so, says Domestic Campaigns director John Yeager: "Our numbers on our gift catalog right now are ahead of projections. The results are holding true."

World Vision's Canadian outpost reports similar trends and recently released a corroborating national survey, which indicates that eight in 10 Canadians plan to maintain or increase charitable giving during this Christmas season. The reason for that donation boon according to 65 percent of respondents: The current economic downturn makes them "more likely to want to help those who are less fortunate."

But how do such results square with the myriad stories of layoffs and food bank shortages? The National Council of Nonprofits reports that many groups are seeing donations dwindle while needs escalate. That "double whammy," as organization president Tim Delaney calls it, prompted the council to launch the Nonprofit Economic Vitality Center, a resource that gathers and reports best practices and strategies for weathering the current giving gap.

Yeager did not care to speculate as to why funds may be drying up for some nonprofits but not others like World Vision. For an organization that allocates about 90 percent of its resources for international programs, the stateside recession has yet to push donors away toward more domestically focused charities. A $75 goat earmarked for villagers in remote undeveloped areas remains the overwhelming top seller from the World Vision gift catalog, outstripping domestic options like school supplies or children's clothing.

"When times get tough, maybe Americans can identify a little bit more with the plight of people who are making $2 a day," Yeager said, offering his best guess as to why overseas giving remains strong. "This time of year people are extremely generous, but they want something meaningful. When they look at our gift catalog and see where the money goes, it's very meaningful."

Just as shoppers on a tight budget are more prone to scrutinize every purchase, givers now seem more intent than ever on leveraging their charitable contributions for all they're worth. Nonprofits must compete for the hearts and dollars of donors, and those providing the most essential services often hold a considerable advantage.

Indeed, the organizations reporting the greatest fundraising woes are those engaged in long-term health initiatives, political and cultural renewal, or other efforts of less immediate concern. At Focus on the Family, for example, the reduced giving led to eliminating the print editions of four of its eight magazines-Plugged In, Breakaway, Brio, and Brio & Beyond. Each of those publications remains available online as the organization adjusts to maintain maximum impact on a budget that dipped from a projected $160 million to $138 million for the current fiscal year, which began in October.

Similar cuts at a social service agency might yield more urgent impacts. Salvation Army spokesperson Melissa Temme believes that reality helps explain why her organization is able to flourish amid a tough economy. "In many cases, we've seen an uptick in donations during difficult times," she said, noting that giving has maintained or even increased slightly in the country's current episode of financial grief. "There are a lot of charities competing for donors' dollars, but many of the health organizations or very specialized charities that may not deal with basic human needs tend to struggle during difficult economic times."


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