Our national affiliate, National Christian Foundation, was mentioned in a recent article on www.philanthropy.com, website of The Chronicle of Philanthropy. The article, which focuses on the mixed signals coming from the non profit sector, mentions that NCF projects they will distribute $100 million more in 2008 than 2007. This number references all affiliates, including SCCF.
This is exciting because it is directly opposite of how many in the community foundation world view the donor-advised fund. For many institutions, the DAF is a tool that allows philanthropists to give assets away, while maintaining long term control over those assets. Here at SCCF, however, many view their DAF as a storehouse, used to set aside charitable funds when income is strong. Just as Joseph wisely set aside wealth to distribute in years of difficulty, these are now able to distribute to needy ministries suffering because of the economic downturn.
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Year-End Giving Update: Mixed Results at Charities Prompt Growing Money Worries
December 22, 2008, By Holly Hall
Like many social-service charities, the Salvation Army in Syracuse, N.Y., has seen contributions rise this year, as donors open their wallets to help growing numbers of poor families weather the recession. By last week, the charity had raised nearly $860,000, about 20 percent more than it collected by mid-December in 2007.
But expanded donations have not brought much holiday cheer to Salvation Army leaders, who say they are fearful about what the New Year will bring.
The charity has seen demand for food from its pantry double this 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 the state, facing a $15-billion shortfall, will cut support for many programs, starting in April.
“One politician said that nonprofits will have to do more, given the state cuts, but that is like telling an underweight person to go on a diet,” says Nancy Kronen, director of development. “We’ve seen a spike in emergency assistance, it started in April and May and continued to grow. We realized in September that it was not a temporary spike. The worry is: How will we sustain this over time?”
Even so, Ms. Kronen’s organization is doing better than many, according to the latest Chronicle round-up of how giving is faring at 66 charities nationwide. (To see a detailed look at giving by charities that provide updated results to The Chronicle, see this table)
Among charities with the biggest drops are community foundations and other organizations that allow people to set up a donor-advised fund, a personal charitable account that donors use in making contributions to charities of their choosing. Donors often use appreciated stock to establish donor-advised funds, and the plummeting stock market has brought such gifts to a standstill at many organizations.
At the Fidelity Charitable Gift Fund, for example, contributions were down by 40 percent by the end of November, while donations to the Silicon Valley Community Foundation dropped 48 percent over the same period.
Even so, the funds offer one bright spot for many charities: More and more donors are now taking money out of their funds to channel to nonprofit causes. Fidelity had processed 234,000 gifts from donor-advised funds through November of this year, up from 227,000 in the same period last year. And at the National Christian Foundation, officials project they will distribute $450-million from donor-advised funds by December 31, up from $350-million last year.
Nevertheless, 37 of the 66 organizations contacted by The Chronicle report that donations are down this year. The findings mirror those of other recent surveys:
- A survey this month of 660 groups by the Minnesota Council of Nonprofits found that more than half of the organizations report declining revenue this year. One quarter had cut staff members as a result.
- In another survey of 755 hospitals and medical centers nationwide conducted in November and December by the Association of Healthcare Philanthropy, 84 percent reported that the recession is having a “somewhat negative” or “very negative” effect on their fund raising. Forty-six percent said that they planned to decrease their projected fund-raising returns by an average of 17 percent as a result of the recession, and 40 percent said they would reduce their operating budgets.
- A December poll of more than 70 mostly human-services charities by the Silicon Valley Council of Nonprofits, in California, found that 34 percent reported a decrease in contributions of at least 10 percent.
To be sure, a few charities have remained seemingly immune from the economic meltdown — at least so far. World Vision, the international relief organization, reports a double-digit percentage increase in contributions, to $1.2-billion, as of September 30, the end of its fiscal year. And from October 1 to December 31, the charity expects contributions to be up by another 5 percent compared with the same quarter in 2007.
The increase is fueled by World Vision’s holiday gift catalog, which enables people to purchase items for needy people overseas instead of giving presents to friends and relatives. Sales are now brisk, and officials say the catalog may generate $22.5-million, up from $21-million last year.
The charity has fared well is because of its Christian roots and long-term relationships with donors who make monthly gifts to sponsor children in developing countries, says Devin Hermanson, a senior director who manages the catalog.
“People see donating through the catalog as a form of tithing,” he says. “We have something unusual going for us in that a lot of our catalog donors have been child sponsors and they have a history with us. They know we use their money well, that is what people look for in a down economy.”
Oxfam America, another international relief organization, hasn’t been so lucky with its online-only holiday catalog this year. Sales generated by the charity’s Unwrapped Catalog were down 40 percent in November and, though things have picked up a bit this month, sales are still lower than in December of last year, says Zeenat Potia, Oxfam’s press officer.
The holidays aside, most fund raisers expect the fund-raising climate to remain difficult throughout 2009 and possibly beyond. A twice-annual study of more than 100 fund raisers found they had lowest level of confidence in their ability to raise money now and in the next six months in the 10 years the study has been conducted by the Indiana University Center on Philanthropy.
To cope with what is widely expected to be a very tough year ahead, even charities that raised more money this year are laying off employees and trimming their budgets in other ways.
For example, Big Brothers Big Sisters of Colorado, in Denver, last month decided to reduce its budget by 10 percent even though it is on target to achieve a 5-percent increase in contributions this year. The charity, which relies on corporate donations for 27 percent of its revenue, fears a loss of at least some of that money next year because of the bad economy. It recently laid off nine of its 48 employees and reduced its leased office space.
Meals on Wheels, in Chicago, reacting to a downturn in corporate support that officials expect to worsen in 2009, is trimming its budget by 35 percent. Says Kimberly Siske, director of development: “We’re hoping that’s overly conservative to be on the safe side.”
Paula Wasley contributed to this article.