Skip to content
Link copied to clipboard

A mixed effect on giving

Many charities have not felt the economic crunch - yet.

With a souring economy, soaring gas prices, mortgage woes and layoffs, you might expect charitable giving to take a nosedive.

Not yet.

While the economy is making it tougher for some organizations to raise money and hurting the endowments and investments of others, the most visible effects so far are that some donors are making smaller contributions, and others may be delaying decisions on major gifts.

Some human-services groups are feeling a financial pinch, but others, including arts organizations and social-justice charities, say it is too soon to tell whether it will be more difficult to raise money this year.

United Way of Southeastern Pennsylvania recently announced that it had met its 2007-2008 campaign goal of $54 million with several thousand dollars to spare.

"We certainly recognize the challenging economic environment we are in," said Carl M. Buchholz, United Way's chairman and a Center City lawyer. He said the group would be "realistic" in setting next year's fund-raising goal but was confident of a successful campaign.

The year ahead could be rocky.

"I hear a lot of people talking about it, a lot of people worrying about it," said Rebecca W. Rimel, president and chief executive officer of the Pew Charitable Trusts. She said nonprofit groups were "especially worried" about capital campaigns, which seek millions of dollars from contributors.

"I haven't heard of any organizations that have had a direct financial hit locally, though," Rimel said.

Virtually every major cultural organization in Philadelphia is in the midst of a capital campaign. Officers of groups whose campaigns are well under way and have raised significant amounts, such as the Please Touch Museum and the Free Library, said they had not felt the economy's woes.

"I don't sense it so much, but when someone makes a large capital gift, it doesn't happen overnight," said Kelly Resinger, vice president of development at the Please Touch, which has raised $64 million of $88 million needed to renovate Memorial Hall for the children's museum, where it will open in October.

"Some gifts can take 12 to 18 months to land, so it's hard to say whether the economy is affecting our campaign. Right now, things are pretty rosy for us," she said.

Stacy Palmer, editor of the Chronicle of Philanthropy newspaper, said the picture was "very mixed" across the country. "In all economic downturns, nonprofits always feel it after the rest of the economy," she said.

Large nonprofit groups generally weather tough economic times, whereas smaller groups are more vulnerable because they generally lack an endowment or large cash reserves. Large nonprofits often plan budgets based on the average income from their endowments over the latest three years, thus providing a "smoothing effect" on the ups and downs of the markets, Pew's Rimel said.

Charities that depend on a lot of small donors are hardest hit in tough times, as people with little discretionary income have less to contribute because of higher prices for gasoline, heating oil and food.

Locally, human-services groups, including the American Red Cross chapter in Camden and the food bank Philabundance, have experienced declines in donations.

"We've had a noticeable downturn in the last six months, both by individuals and notably by companies," said Camy Trinidad, program director at the Red Cross. "We are probably down about $100,000 over the previous year."

Philabundance said monetary donations declined 5 to 8 percent in March and April from individuals and from corporations.

"Someone who may have given $100 before is now sending $50," said Martha M. Buccino, the organization's senior vice president for strategic development. "One corporation gave us $50,000 last year but will only be able to grant us $25,000 this year," she said.

Philabundance, which distributes perishable food to 10 Southeastern Pennsylvania and southwest New Jersey counties, relies on food donations and says it is experiencing shortfalls of fresh produce and canned food. The inventory for nearly 600 agencies, including church cupboards and soup kitchens, is down 27 percent from a year ago, Buccino said.

Meanwhile, the Greater Philadelphia Cultural Alliance, which represents 375 arts and cultural groups, says it has not heard that those groups are being squeezed by the economic crunch.

"A lot of the arts organizations are supported by long-term people who have been involved all their lives," the group's president, Peggy Amsterdam, said. "There is a real loyalty."

But, she said, "Arts organizations do feel the pinch, eventually."

Lois Welk, executive director of Dance/USA Philadelphia, said dance companies relied on touring and could be hurt not only in financial contributions, but also if performance venues are hit and reduce bookings.

Delaware Valley Grantmakers, whose members include private foundations and corporate-giving divisions of companies, says it does not expect diminished giving from foundations over the next year. Foundations base their giving on the previous-year market value of their endowments, executive director Nancy Lanham said.

"There's usually at least a year lag in seeing an impact in foundation giving," she said.

The small Stockton Rush Bartol Foundation at Broad and Locust Streets, which awards grants to smaller arts education and community-based arts programs, says it has about 15 percent less money to distribute next month because its investments have been affected by fluctuations in stock markets, bonds and international funds.

"We've had to tell people as they call that we have less money than we had last year," executive director Beth Feldman Brandt said. "Last year, we gave away $193,000. This year, we will give away around $160,000."

Stockton Rush gave grants last year to arts and cultural groups including Art Sanctuary in North Philadelphia, which supports African American art, and the Asian Art Initiative, which began at the Painted Bride Art Center and is now independent, with programs for the Asian American community.

Bread & Roses Community Fund, which raises 98 percent of its $500,000 annually from individuals, for groups advocating social change, is not seeing a downturn in giving, executive director Casey Cook said.

The public foundation asked donors this year to give part or all of their refunds from President Bush's economic stimulus package toward grants and technical assistance to 30 groups working on issues such as affordable housing, access to health care, and the mortgage-foreclosure crisis.

"We had a terrific response," Cook said.