FEELING THE SQUEEZE....BRUSHSTROKES REPORT

FROM: Chronicle of Philanthropy
Special Report
January 15, 2009

Charities Brace for a Tough Year and Seek Role in Recovery Plan
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Perhaps no other year-end fund-raising season has been watched as carefully and nervously as the one that just closed. While the last quarter is always important for filling charity coffers, it was perhaps even more important in 2008 as a bellwether of just how difficult the coming year will be for the nation's charities.

The anxiety about the year ahead was clear in a new poll that found a record-setting decline in confidence about fund raisers' ability to succeed over the next six months. More than one-third of fund raisers say they do not expect fund raising to fare well over the next six months, far more than have reported such pessimism since Indiana University's Center on Philanthropy started conducting the poll in 1998.

While most charities have yet to tally their results for December, it's clear that the record was mixed. The most notable successes were achieved at social-service groups, as donors responded to charities' aggressive efforts to seek aid to meet rising needs of poor and middle-class people.
Still, most social-service groups said the increases were not large enough to meet surging requests for aid. At the Salvation Army, in Syracuse, N.Y., donations were running 20 percent higher in December than at the same time a year ago. But demand for food from its pantry doubled in the past year, and it is housing 50 percent more people than its shelters were built to accommodate. To top it off, the charity, which relies on government grants and contracts for 70 percent of its operating budget, has just learned that New York State, facing a $15-billion shortfall, will cut support for many programs, starting in April.

Even at organizations that achieved better fund-raising results than expected, the overall financial picture is so bleak that many charities have started to lay off workers.

Big Brothers Big Sisters of Colorado, in Denver, saw contributions rise last year but still decided to dismiss nine of its 48 employees. The charity says it expects a 10-percent decline in corporate donations, which account for more than a quarter of the group's revenue.

As a new year opens, many charities are hoping that President-elect Obama and Congress will take heed of their money woes and channel money from an economic-stimulus plan to nonprofit organizations.

In the following pages, The Chronicle looks at how charities did in the search for year-end gifts from recession-weary donors, and what they are doing to drum up help from private and government sources.

Copyright © 2009 The Chronicle of Philanthropy