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Giving deficit

By   /   Thursday, October 23rd, 2008  /   Comments Off on Giving deficit

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For nonprofits, 2008 has not been a good year. Unfortunately, it’s probably going to get even worse.

Heading into the holiday season – the donation primetime – individuals and businesses are shoving their wallets back into their pockets, worried that they may need to put money toward food and living expenses rather than toward charities. This comes at a time when some nonprofits say they are slammed with more need from the community than ever before.

Foodshare, a hunger relief nonprofit in Oxnard, is encouraging families to begin the holiday season donations now rather than waiting until the actual holidays. “People are hungry today,” said Ann Sobel, interim executive director. “The holidays are a focus for America to give and that’s terrific but hunger doesn’t go away with one trip to a food pantry or one basket for Thanksgiving.”

Last winter, Foodshare collected about 190,000 pounds of food, but Sobel said the organization needs to raise about 250,000 pounds this year to not only feed families this holiday season but through next spring. Because so many people are strapped for cash this fall, Sobel said Foodshare has seen a significant increase in demand from its 150 distributing partners.

“Some people may not be in the hunger category, meaning they have that rumbly-tumbly kind of stomach. But they have to choose between paying for food or paying rent or putting gas in their car,” she said.

While Foodshare relies almost exclusively on private donations to survive, Santa Barbara-based Sojourn Services, which provides services to children, families and disabled adults, looks to the state and county government for support.

Executive Director Rebecca Robertson said the state and Santa Barbara County budget crises have taken a serious toll on the nonprofit, which gets about 90 percent of its funding from government agencies.

“They’re behind in making the payments. They’re three months behind which makes our cash flow a problem,” Robertson said of state funding, which comes through the county to Sojourn. “After three months, it’s hard to keep cash flow going. We keep our fingers crossed that it’s not going to get any worse than that.”

She said unless government funding starts coming through and the community responds to a holiday season donation drive, Sojourn will have trouble giving holiday gifts to the 350 children it helps.

Path Point, also based in Santa Barbara, is faced with a similar situation. It has also seen a delay in government payments and is just starting to see funds come through in recent weeks. The nonprofit, which provides work-training programs for the disabled, also is having additional problems accessing money from area foundations.

Path Point President and Chief Executive Officer Cindy Burton said the widespread funding shortage among nonprofits hinges on foundations, whose portfolios have dropped with the stock market.

Lois Mitchell, president of the Orfalea Foundations, said its investments haven’t taken as huge a drop thanks to a solid investment strategy with West Coast Asset Management. The organization doesn’t expect to cut back grants this year or next, “but that’s not what I’ve heard from other foundations,” Mitchell said. “I’ve heard of other ones that are making cutbacks. So I would say we might be an exception.”

With government and private foundation help falling off, Path Point is about to kick off its holiday season appeal for donations, which tends to draw in about $15,000. However, if the community pinches its pennies too, Path Point may, like Sojourn, have to slice back its offerings.

“We just know it’ll be a less of a response this year and we rely on those responses to do things like help us buy vehicles to transport people to their jobs or to the grocery store,” Burton said.

United Way of Ventura County already has begun cutbacks in anticipation of a bleak fundraising season.

“For example, we have two staff positions that are open at the present time and we’re not filling those positions; we’ve put a freeze on salary increases for 2008 and 2009; we’ve put a freeze on the majority of our travel and educational training and conference expenses,” said David M. Smith, president and CEO of United Way of Ventura County.

Smith said it’s too early to tell how the holiday season will turn out donation-wise but the United Way is actively seeking ways to improve its funding haul.

“We are, just this week, launching a very aggressive direct mail end-of-the-year letter appeal, which will go out to initially more than 1,500 leadership donors and perspective leadership donors, and we think that’s going to be a really important gauge for us in terms of what kind of response we see before the end of the year,” he said.

Fran McNeill, Foodshare’s program director, said her organization is remaining optimistic despite the economy’s volatility. She said the magazine “Advancing Philanthropy” published an article earlier this year noting that in the last 30 years, fundraising has gone up in economic downturns. “It’s data that shows proof the American people give more during times of difficulty than they do other times,” McNeill said.

Burton echoed McNeill’s hope that the economy won’t damper nonprofits’ holiday fundraising efforts as much as anticipated.

“We all hope for some bright thing to happen to cause this all to shift,” Burton said. “You can’t be in the nonprofit world and not be an optimist.”

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