Small nonprofits left looking for crumbs

Paul Ash can't afford to miss a single meal. Granted, he prepares 33,000 a day, but losing one can leave a child hungry.

Mr. Ash directs the San Francisco Food Bank, and since Sept. 11 he's fed everyone who has come through his doors, despite a big increase in demand.

But he worries about being able to sustain his good work. Like his counterparts at many other small to mid-size nonprofits, Ash hails the estimated $1.3 billion the public poured out to disaster relief after this fall's terrorist attacks.

Yet he's concerned about being lost in the shadow of that effort. "'Will they donate?' is the question on everyone's mind," says Ash. "We're on pins and needles waiting on the answer."

A slump in giving is already evident at many nonprofits not involved with Sept. 11 relief. For example, donations at many New York-based human services and art and cultural programs have plunged, causing several to suspend services or close altogether.

Nonprofit experts won't know the full impact on charities for some time, but they confirm that donation patterns have fallen, especially in the Northeast.

The Gay Men's Health Crisis (GMHC), which assists people living with HIV and AIDS, confirms the downturn.

"Recent fundraising drives have only generated about 85 percent of normal giving," says GMHC spokesman Marty Algaze. "We're hoping for a strong holiday to pull our numbers back up."

Exacerbating the GMHC's problem, the New York-based organization is bracing for an expected 15 percent spending cut by local government agencies that could have dramatic implications for many area nonprofits. "With economic uncertainty, fewer donations, and changes in government funding, we are very concerned," Mr. Algaze says.

But experts are more optimistic about giving in other regions. Across the country, nonprofits - from animal shelters to zoos - report that donations fell by as little as 5 percent after the terror attacks.

But many are concerned about a further drop-off during the important holiday season. According to the American Association for Fundraising Consultants (AAFRC) of Indianapolis, many nonprofits amass more than 60 percent of their annual donations during the holidays.

Perhaps the most endangered nonprofits are art and cultural programs.

"People are quick to forget what a major role art and cultural activities play in providing solace ... when times are rough," says Denise Montgomery, executive director for Colorado Business Community for the Arts, an organization that helps executives donate their time and money.

In a survey by Philanthropic Research Inc., of Williamsburg, Va., 58 percent of small and mid-size nonprofits expect to raise fewer donations in the coming months - both from individuals and corporations.

One reason: Givers may be tapped out. An astounding 60 percent of Americans gave to Sept. 11 recovery organizations, leaving some nonprofits wondering whether individuals will fork over still more money to local charities as recession looms, the jobless rate rises, and consumer confidence wavers.

The current economic slide, however, won't pose too large a problem, if history is any indication.

A study by the Center of Philanthropy at Indiana University found that of 13 major events since 1940 involving terrorism, war, and political and economic crises, only the stock-market crash of 1987 triggered a decline in donations.

"Typically, donations slow immediately after a crisis, but within a year, the public responds," says Patrick Rooney, the institute's research director. "I'd expect to see a similar rebound, but [the current shortfall] does have people nervous."

A coming public-relations blitz by nonprofits that rely heavily on holiday giving may be aimed at countering the shortfall. Experts hope a renewed American spirit for giving will begin to extend to local causes.

Helping the situation, organizations such as the American Red Cross and the United Way have pulled back from their donation pleas for Sept. 11 relief. The Red Cross has closed its controversial Liberty Fund with more than $500 million in donations.

"Right now we are not actively seeking donations," says Red Cross spokeswoman Stacey Grisson. "We've also asked our partners and contributors to pull back on their outreach efforts, so that we can concentrate on helping those in need."

"We aren't expecting a major downturn in giving, but nonprofits need to be vigilant and keep asking donors," says AAFRC president and nonprofit consultant Leo Arnoult. "Americans will give when they're asked, and, although the risk is real for some nonprofits, Americans have always answered the call for help."

Small nonprofits are counting on that to happen again. For those that rely on the holiday drive to stay solvent for the year, even a 2 percent dip, coupled with increased demand, promises trouble for them and the communities they serve.

"People are hearing us," says Christopher Meza, a fundraiser for the Colorado Business Community for the Arts, "and are now realizing how important it is to spread out their giving."