Reprinted with permission from the Chronicle of Philanthropy
No matter how much success the 400 top fund-raising organizations in the United States achieved last year, the future looks gloomy.
Particularly since the September 11 attacks, charities have seen a drop in donations, initially because mail appeals were canceled and donors steered contributions to relief efforts. Within the last few weeks, mail potentially contaminated by anthrax has worried people about opening letters, threatening to pose yet another hurdle to the crucial end-of-year fund-raising push.
"Everything happening right before the best giving season cut into our ability to approach people," says Alyssa Herman, director of development for Doctors Without Borders USA (Médicins Sans Frontières USA), in New York. The international relief group lost $2-million in expected revenue after halting an appeal scheduled to be sent immediately after the attacks.
As a result of anticipated fund-raising shortfalls, many charities are proceeding cautiously with new programs, hiring additional staff members, or spending on travel. The fund-raising climate does not seem likely to improve soon: a recent poll by Independent Sector, a coalition of major nonprofit organizations and grant makers, found that half of the 1,009 people it surveyed said the sinking economy would negatively affect their giving decisions.
Government officials have started to take notice of the plight of charities.
President Bush recently recorded a public-service announcement for United Ways, describing their support of child-mentoring and drug-treatment programs, as well as shelters for people who are homeless or abused. "All of us have a responsibility to promote these efforts--now more than ever," the president says in the announcement. "I encourage all Americans to support their local United Ways, to help build--and rebuild--communities we can be proud of."
Two U.S. senators also have proposed tax-relief legislation intended to spur giving to all types of charities.
As charities head into the final stretch of this year, fund raisers are hastily comparing strategies for how best to proceed given the uncertain economic outlook.
At the Salvation Army in Des Moines, some of the group's donations are being channeled toward relief efforts instead of local needs, such as providing food and financial help to those who need it to pay rent and utility bills. Two out of five donations made in response to an August appeal by the local charity have been directed to the relief efforts, says Carl Bump, director of development and communications.
As a result of this earmarking, and because fund raising was already down 10 percent before the attacks, the food bank the charity helps finance can only distribute three days worth of food, instead of five. "It's great that we helped out with September 11, but there are still needs in the Des Moines area," says Mr. Bump, who hopes donors "still budgeted for the local end."
The attacks also affected fund raising at Habitat for Humanity International, which canceled a September mail appeal, losing $900,000 in projected revenue. The setback prompted the group to ask several donors to accelerate long-term gift payments.
For example, a donor who pledged $500,000 over five years made an extra payment this fall, says Paul C. Miles, acting senior vice president of development.
The house-building charity, headquartered in Americus, Ga., is scrambling to make up lost ground. In October the group sent an appeal to 1 million people who had donated to the group in the past -- two and a half times the number originally scheduled to receive it, says Mr. Miles. The charity also revamped its Web site, making donation information more prominently featured on its home page.
Even if those strategies succeed in quickly obtaining donations, Habitat for Humanity is still scaling back its annual goals. The charity had planned to build an additional 1,400 homes this year; now only 950 additional homes will be built, says Mr. Miles. He adds that the group also expects losses in corporate giving: "They just don't have the philanthropy budget that they did a few years ago."
Other nondisaster relief charities, including Girl Scouts of the USA, in New York, are feeling the pinch from corporations that suffered stock losses, decided to give instead to disaster-relief efforts, or both.
"It's a double whammy," says Diane Pike, director of development. "Especially in New York, we are more acutely aware of it." A company recently decreased its support for Girl Scouts of the USA's 90th anniversary celebration next March, from $250,000 to $100,000. The group was hoping to raise between $2-million and $3-million at the event. "We are probably not going to realize that revenue," says Ms. Pike.