In the Giving Season, US Charities Are Feeling the Economic Squeeze

Cuts in government services, uncertainties in the Middle East, and inflation are biting into America's deep-rooted tradition of generosity

AMERICAN charities need a handout. Looming recession and uncertainty over the Persian Gulf crisis are undermining charitable giving this holiday season, just as the needs of the poor are rising.

It's not that Americans aren't generous. Many of them are. Look no farther than the Pentagon's mail room, where 350 tons of letters and keepsakes - everything from barbells to bubble gum - are coming in daily for the troops overseas.

Some charities, too, are seeing a growth in donations for the needy here at home. But the growth isn't what many of them had expected, and others are experiencing a decline at a time when the demand for food, clothing, and other services is rising:

Giving to the American Lung Association's Christmas Seal campaign is down 6.5 percent over a year ago.

The Federation of Protestant Welfare Agencies, representing 254 charities, reports no growth in contributions so far this year.

Salvation Army kettles are taking in 7 percent more than last year, but requests for assistance are up 22 percent.

Although the United Way is seeing a slight increase in contributions, the extra dollars are expected to be eaten up by inflation.

``More people seem to be giving this year,'' says Tara Patty of the Salvation Army of Southern California. ``But they are giving slightly less.''

Overall, philanthropic giving in the United States this year will probably top the 1989 tally of $115 billion. The volume has increased every year since 1955.

Seventy-five percent of US households now give to charities. The average annual contribution per household, according to the Independent Sector, a group that tracks and encourages giving, has increased in the past two years from $562 to $734. Churches are the No. 1 recipients.

The one caveat in all of this is that in times of recession - 1982 and the early 1970s - the rate of giving did not keep pace with inflation, meaning there was no ``real'' growth in contributions. The same could happen this year.

``There may be some historical parallels with other periods of economic decline,'' says Nathan Weber, editor of Giving USA, a yearbook on US philanthropy.

How Americans will react to hard times, though, is difficult to predict. Sacrificing to help others, a tradition with deep roots in American culture, plays on a complex set of emotions.

Some individuals, corporations, and foundations will find it more difficult to contribute - or at least to contribute as much as they have in the past. Others - particularly individuals - reach deeper into their pockets when they see the need is greater.

``Sometimes in recessions people give more to those who are hurting the most,'' says Virginia Hodgkinson, research vice president for the Independent Sector. She says that individuals - the largest source of charity - tend to be ``fairly steady in their giving,'' even in a recession.

Adding to uncertainty this year is the Persian Gulf crisis. The possibility of war has kept some Americans from being as generous, charities say.

More worrisome to these groups is the growing demand for services and cutbacks in government funding, which they believe will widen the ``needy gap.''

``The nonprofit field gets a double whammy,'' says Bob Kardon, executive director of the National Council of Nonprofit Associations.

On the positive side, there are causes today that Americans are more aware of - such as the homeless and environmental concerns - which increases the volume of giving. Charity groups, too, are more sophisticated in their fund raising.

The level of giving this year varies widely from region to region and even city to city. While contributions to the United Way are up 4.6 percent nationwide, they are down in Boston. They Salvation Army is doing better in Chicago - 25 percent better this year - but is 11 percent behind in collections in New York.

``The Northeast is basically down,'' says Col. Leon Ferraez of the Salvation Army's national office. ``The Sunbelt has done extremely well.''