Some nonprofits are doing well despite the crunch.
By Andrea Ball
Monday, October 06, 2008
The sagging national economy is hitting some Central Texas charities in concrete ways: dwindling donations, program cutbacks and even layoffs.
In late September, the Round Rock Volunteer Center ceased operations for six days for the first time in its 20-year history because of money problems. United Way Capital Area laid off seven people, or 10 percent of its staff, last month.
And the National Council on Domestic Violence, which runs two national hot lines for abused adults and teens, has seen a $750,000 drop in its hot line funding — 13 percent of the programs' combined $5.6 million budget. That loss could lead to layoffs, said Sheryl Cates, the nonprofit's chief executive officer.
"We just aren't getting the corporate support we used to," she said.
Nonprofits always worry about money. They count on donations to help the needy and pay employees. But charities across the country know a recession can batter them badly.
Studies have shown that individual and corporate gifts to foundations and other nonprofits slow down during hard times. According to Giving USA, a foundation that publishes data and trends about the nonprofit sector, charitable donations did not keep pace with inflation during economic slumps in 1973 and 2001.
Surviving a tough economy doesn't simply call for throwing more fundraisers or hitting up bigger donors.
Experts say nonprofits need to scrutinize their budgets, programs and capital campaigns. They also need to show supporters why they are worthy of financial contributions, said Barry Silverberg, director of the Center for Community-Based and Nonprofit Organizations at Austin Community College.
"It really is incumbent upon all organizations to reflect on the way they're being perceived and what the perceived value of their services is to the public," he said. "It can't just be 'We're doing good stuff, and we're important, so give us money.' "
As the tanking economy hits everyone from financiers to cabdrivers, nonprofits and foundations across the country are feeling the pain of a tough fundraising environment.
Meanwhile, some Central Texas charities are having a tougher time than others.
The Round Rock Volunteer Center crumbled last month after its annual fundraiser fell apart and a direct mail campaign brought a poor response. The nonprofit terminated two employees and then scrambled to pull itself together. Board members and the City of Round Rock contributed enough money to hire a full-time employee, board President Lisa Richardson said.
Last week, the nonprofit rehired one employee. Now it's looking for ways to stay strong financially.
"It's a struggle," Richardson said.
The United Way has had its own problems. Earlier this year, a large foundation grant was reduced, Marketing Director John Turner said. Also, fewer companies participated in the annual workplace campaign because of corporate restructuring, he said.
Meanwhile, the National Council on Family Violence got fewer donations from corporations such as Target and Liz Claiborne, Cates said. The hot lines — which handle more than 200,000 calls a year — will stay open. But if there are layoffs, callers may have to hold up to 10 minutes, she said. And that might lead many to hang up, she said.
"When you're in crisis and standing on the corner with ... your children and feeling like you're losing everything, five minutes seems like forever," Cates said.
Bad times don't necessarily translate into financial instability.
Some nonprofits are doing as well as they did last year, and some are even expanding.
The Boys & Girls Clubs of the Capital Area has already raised 18 percent more money this year than it did in all of 2007, spokeswoman Julie Mayne said.
The agency plans to serve almost 10,500 youths this school year, 300 more than last year. But it's still keeping its eye on the shifting economy.
"We have not had to lay off any staff members, although we are watching our salaries very closely and being extra cautious about not overstaffing," Mayne said.