Penny pinching: How local charities are hurting from the effects

By Laura Smith

December 4, 2008

It is a typical Tuesday morning at the Loaves and Fishes Christian Food Ministry of Alamance County. A line of local residents waiting to apply for food wraps around from the inside of the administration building, out into the parking lot and onto the sidewalk.

Once accepted as being in need of the service, these residents drive through the drive-through of the distribution center where volunteers fill their cars with a month’s worth supply of food.

Next to the distribution center, there is a small room lined with shelves of all types of food: canned, boxed, bagged, anything.

But lately, these shelves have not been full. In the past few months they have been incredibly deficient, even empty.

It is safe to say that the economic recession the country now faces has affected most organizations and individuals on some level including those organizations that serve to meet the needs of others, such as Loaves and Fishes.

Charity organizations around the country, and even around the world, are cutting back on expenses and seeing a decline in donations of all sorts.

Less money in peoples’ pockets means less to give to these organizations that rely so much on the public’s generosity.

Looking at the Statistics

According to Claire Gaudiani, author of The Greater Good, America has given more than $2 trillion to charity organizations over the past 20 years. She says, “Philanthropy has made a major contribution to successful capitalism.”

But now these philanthropic organizations are experiencing a bad sign of the times because of the dwindling economy. Donations are down and morale is low. What happens to successful capitalism then?

According to an analysis of donations to 74 groups by Target Analytics, a consulting firm to non-profits researched in the Community Investment Network, the number of charitable donors fell a median of 3.8 percent in the first half of 2008 while revenue declined a median 2.4 percent.

A survey of charity chief executives released in September 2008 by the Charities Aid Foundation (CAF) and the Association of Chief Executives of the Voluntary Sector (ACEVO) suggests that the effects of the slowing economy are having a huge impact on charities.

Its findings show that 72 percent of charities surveyed have seen demand for their services increase and almost 30 percent have seen individual donations fall.

This is no surprise given the events of recessions in a historical context. According to the GivingUSA Foundation’s analysis of data on philanthropic organizations since 1967, people are less charitable during downturns. During recessions, giving decreased one percent after adjusting for inflation.

In countries other than the United States, charitable organizations are feeling this monetary hindrance as well. Seventeen percent of British charities reported a decline in income, according to The Guardian.

But these setbacks are not just occurring on a national and international level, they are happening in your own backyard.

The Piedmont-Triad area and Alamance County of North Carolina in general has seen a dip in giving to philanthropic organizations as well.

The Red Cross is hurting from recession

“This is something we’ve seen drop,” Suzanne Phillips, the community public relations director for the Piedmont Red Cross, said. “We’ve seen a drop in what the United Way has given us as well as contributions and donations.”

The American Red Cross is a national organization that focuses on three primary services: operating a national network of blood banks, working through a national network of chapters of emergency relief (storms, floods, fires), and first- aid training certification courses which raise revenue for other local programs.

According to Peter Frumkin , author of On Being Nonprofit, the commercialized half of the Red Cross could not exist without the delivery of charitable services.

Annually, 33 percent of the Piedmont Carolina chapter’s budget comes from donations, 12 percent from the United Way, and 14 percent from fundraising.

“We are cautious about how we spend our money,” Phillips said.  “We try to keep it as level as possible and cut back as much as possible.”

The Red Cross has had to be very frugal to maintain service to its clients, most of who are victims of single-family fires.

Having laid off three staff members itself, the Piedmont Red Cross now only has two full-time employees.

The Salvation Army’s Boys and Girls Club of America

The Salvation Army’s Boys and Girls Club in Burlington also struggles from the effects of the economic recession like the Red Cross.

 The Boys and Girls Club is an after-school facility that tutors and provides recreation for children while their parents work. Sherri Henderson, director of the Boys and Girls Club, struggles day-to-day with the consequences of the current economic recession.

With an annual budget of approximately $328 thousand, the Boys and Girls Club receives its funding from the United Way, its annual steak and burger fundraising dinner, and some grants. Typically, The Boys and Girls Club receives $80 thousand from the United Way and $58 thousand in pledges from the steak and burger fundraiser. These figures however, are not enough to survive the poor economy.

“Our expenses have increased,” Henderson said. “It seems like we are constantly trying to revise our budget to reflect the increase in supplies [needed].”

The rising cost of gas has also been an issue. The Burlington Boys and Girls Club has four buses: two that require diesel and two that require gasoline.

“During the school year we pick up youth from 13 area schools,” Henderson explained. “In the summer we average more than 100 youth a day so we need to take two buses on each field trip.  Our expense line has doubled and there is not much we can do about it.”

The rising cost of food makes it difficult for the Boys and Girls Club to provide its usual afterschool snacks.

“We have been blessed to have two local companies donate food to our club,” Henderson said.

The Boys and Girls Club also has two additional companies that have been donating snacks for the 100 plus children a day.

 “If we did not have people willing to assist us with food we would not be able to give our children a free snack in the afternoon.”

But quite possibly one of the most disheartening aspects of the economic recession on this charitable organization has been the situations of the families who are involved with the Club.

 “We have seen some of our parents lose jobs,” Henderson said.

“The majority of the populations we serve was already on tight budgets. Now, in the past year, we have seen them struggle even more.”

 To join the Burlington Boys and Girls Club, a family must pay $80- one of the cheapest fees to pay out of any organization of its kind. But even this payment is hurting families’ wallets.

  “We know that we are valuable to them [the families], but when it comes to making the choice to pay their rent or pay for after school fee, they really do not have a choice,” Henderson said. “More than ever before we have seen parents not being able to pay for childcare.”

Some children are lucky to get partial scholarships but even these are scarce now.

 Thus, a few children have had to leave the club.

 “We do our best to not have kids leave,” Henderson said.

The Boys and Girls Club best efforts cannot undo the effects of the financial crisis though.

A Harsh Reality           

  According to an article in Newsweek by author Daniel Gross, “overall donations are down compared with 2007, and donations of used clothing and furniture to thrift shops have fallen by 20 percent.”

 He also said that according to data provided by Giving USA, “charitable giving fell in real terms (adjusted for inflation) in years in which the economy was in recession.”

   According to a study done by The Chronicle of Philanthropy, 41 percent of the 500 households surveyed were already having problems balancing their expenses and 28 percent of those facing financial troubles were expected to donate less money to charity in the months to come.

 According to the Charities Aid Foundation, 29 percent of charities have made staff redundancies, 56 percent have limited staffs’ pay increase and 63 percent have increased grant applications. Meanwhile, 71 percent of charities are seeing their costs increase due to inflation. 

Loaves and Fishes seeing empty shelves

Loaves and Fishes Food Ministry of Alamance County receives no funding from local, state, or federal governments and relies solely on individuals, churches, grants, foundations and businesses to support its operations.

According to Brenda Allen, Loaves and Fishes executive director, the generosity members of the local community have shown has been very positive.

“When there is a call for giving, they respond very generously,” she said.

But the current downturn of the American economy has tightened givers’ budgets and simultaneously increased the need for donations.

“There’s been an increase of close to 1,000 more people a month coming for assistance because of the gas prices and food prices and loss of jobs or cut of hours,” Allen explained.

People that were once givers are now tied to high gas prices and grocery bills themselves, thus unable to give as easily.

Burlington Salvation Army seeing less giving

A similar situation plagues the Burlington Salvation Army’s food pantry. While it is only a small pantry, the Salvation Army gives to those in emergency situations who have not been able to get food stamps.

The organization even had to change their guidelines for food distribution when the economy went down.

“There have not been a lot of donations,” Robin Drummond, a Salvation Army caseworker, said.

Annual revenue for the Salvation army

The annual kettle drive, held every holiday season, raises money for the following year. At the current time however, fundraising has not been so easy.

“It’s been terrible,” Drummond said. “We’re getting less and less food because of the economy.”

Alamance County Community Services Agency seeing the same effects

Tony Roper, executive director of the Alamance County Community Services Agency, is having the same problem at its food pantry.

 “We’ve definitely seen a decrease,” he said. “I went to the pantry today and it looked pretty bare. This time of year, there are usually a lot of donations. But not this year.”

Habitat for Humanity still seeing good times

Not every organization is hurting from the negative effects of the economic downturn however.

 Burlington’s chapter of Habitat for Humanity is staying above water as best as it can. Habitat for Humanity provides housing for families in need.

“I have worked here for 11 years and cannot remember a time when God has not
 made adequate provision for us,” said executive director, Robin Wintringham. 

“We operate in a very lean fashion, stewarding every donation in the best way possible,” she said. “Were we in a financial
crisis, we could access a line of credit at our bank, tap into our rainy day savings, and make appeals to the public for increased support.”

While Habitat has not resorted to these drastic measures, there have been some changes.

“The most significant effects so far from our recent poor economic times are increased traffic at the ReStore and more applications for Habitat houses,” Wintringham explained.

“To date our donation stream has remained steady, which is a blessing,” she added.

Children’s Miracle Network still going strong

The Triad’s Children’s Miracle Network also reports no economic pinch, at least not yet, said Rose Porges, volunteer coordinator for the Triad Children’s Miracle Network in partnership with Duke Children’s Hospital.

“Not yet, but it may be too soon to tell,” she said. “We may know more of the economic impact on our donations one year from now.”

According to an article from the summer 2008 edition of MIRACLES, a Children’s Miracle Network national publication, the charity has only been experiencing highs.

Children’s Miracle Network and its partners raised more than $237 million for children’s hospitals in 2007 alone. Fundraising for the Dance Marathon program, which sponsors CMN, increased by 23 percent as well.

Any Little Bit Helps

CMN’s success, even in tough times, indicates that one thing is certain: generosity of any amount can make a difference.

“Everybody wants to make a difference but maybe don’t necessarily know how,” Drummond explained.

Her solution?

 “I tell people to ask the question, ‘If you had nothing, what would you want to get?’ That’s what you should give.”

In the Greater Good, Gaudiani suggests her own best practice.

 “There is an individual benefit to the virtuous approach to the pursuit of happiness, of course, and that is the personal happiness derived from generous behavior.”


One thought on “Penny pinching: How local charities are hurting from the effects

  1. Because I have been grading such a massive amount of work, I’m not going to be able to leave comments in detail on everything you have in your final set of writing, but I did want to tell you that the work you have done on this special article is extremely thorough. Compliments on the chart – keep using that sort of visual representation of numbers in your work – it is vital to effective communications!

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