Charities hurt by economic pinch

Belt-tightening by families pinched by rising prices is causing donations to charitable organizations to dip at a time when the groups need the money more than ever to meet the uptick in people seeking help.

The conditions are affecting nonprofit groups “dramatically,” at a time when there are “all kinds of need” in local communities, said Audrey Alvarado, executive director of the National Council of Nonprofit Associations (NCNA).

“When their budgets are tight, we feel it,” she said.

Catholic Charities of Springfield, Mass., says more working poor and elderly are having trouble making rent, mortgages and medical payments and more people are pursuing help to prevent foreclosures and manage debt.

“We’re seeing a definite downward trend in both cash and donated goods,” said Maj. George Hood, National Community Relations Secretary for the Salvation Army, which runs 1,500 thrift stores nationwide.

Patrick Rooney, director of research at the Center on Philanthropy at Indiana University, said a typical recession causes charitable giving to decline between 1 and 3 percent, adding that charities that have diversified sources of funding tend to fare a little better than those who raise the bulk of funding from one source.

Hard numbers are difficult to come by, but anecdotal evidence from various groups shows that economic pressures from rising gas and food prices, tightening credit and lagging job growth are eroding peoples’ philanthropic capabilities.

Maj. Hood said Salvation Army officials estimate that used good donations are down as much as 20 percent while thrift store sales are up 2 or 3 percent. This indicates more people are buying used clothes and furniture these days instead of paying full retail price, while at the same time opting not to donate their used goods, he said.

The Salvation Army realized it was going to be a tough year when the amount of money raised during its Christmas 2007 fundraising campaign was less than 1 percent higher than it was the previous year, as opposed to the typical 4 or 5 percent increase, he said.

To combat the situation, NCNA is drafting a letter that members can run in their state newspapers, urging individuals to donate some of the money they will get back from the federal stimulus rebate checks to a worthy cause. And NCNA members are planning to lobby federal lawmakers during NCNA’s annual meeting in June to do more to help the needy.

Rick Belous, vice president of research at United Way of America, said his group hasn’t felt a pinch yet, but if conditions continue, “I’d expect United Way and other charities to start to feel the pinch, really, next year.”

Right now, he said, the results of United Way’s 2007-2008 giving campaign are still being calculated, but he expects growth of about 2 or 3 percent over the previous year’s fundraising total.

He said that before the current economic challenges began, United Way expanded its fundraising effort well beyond its traditional workplace campaign, with more electronic communication with donors, a focus on longterm relationships with donors, and by encouraging people to donate their time to volunteer.

Overall donations have not been dropping in the Archdiocese of Washington, said spokeswoman Susan Gibbs. A quick review of five parishes showed donations are up in four of them compared with the same time period in 2006-2007.

According to the most recent national giving statistics in Giving USA 2007, prepared by Mr. Rooney’s Center, estimated giving in 2006 was a record $295 billion. About 75 percent of annual giving in America comes from individual donors.

“Nobody’s pushing the panic button at this point. But I think it’s obvious that people are starting to tighten up on their financial resources and are going to be very sure before they send out their money,” Maj. Hood said.