Nonprofits Scramble to Meet Need
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Nationwide, nonprofit organizations are fine-tuning annual drives for donations. But this year slim corporate handouts, shrinking government support, and a burgeoning list of people in need are forcing them to sell hard.
"In the last two years it's been like an explosion," says Katie Burnham, executive director of the Society of Nonprofit Organizations in Madison, Wis. "There's been a real increase in demand for services from nonprofit organizations, which is way out of proportion to the amount of money available ... and [nonprofits] really don't know where to turn."
Nor is any slackening in sight.
The growing public spotlight on critical social issues - child abuse, AIDS, homelessness, and drug addiction, to name a few - has brought floods of new cases into the system.
But the mechanism and money to deal with the tide is not yet in place. Ms. Burnham cites two recent examples: a local foster-care system that is overwhelmed with children removed from abusive families; a literacy program turning applicants away because it cannot pay for enough teachers.
Nonprofits, including religious institutions, health-care, education, social-welfare, arts, and environmental groups, are being challenged.
The weak economy has aggravated social ills. Cash-strapped federal, state, and local governments have slashed funding and programs and left nonprofits to string together an alternative welfare net.
It's not an unfamiliar pattern, suggests Robert Boswell, executive director of the National Committee for Responsive Philanthropy in Washington. He makes an unlikely comparison between the United States and Russia. Hard times in the newly independent republic, he says, have spawned a phenomenal number of grass-roots organizations to meet needs the government cannot. Likewise, the US slump is pushing nonprofits to the forefront of social welfare, health, and community development projects.
Despite the struggles of existing nonprofits, new ones are springing up almost daily.
"We get 20 to 30 calls a month from people wanting assistance and guidance in setting up a nonprofit," says Elaine Coolbrith of the Support Center of Massachusetts, which gives training and legal assistance to nonprofits. Once they realize the scarcity of funds, many start voluntary organizations instead, Ms. Coolbrith adds.
Corporate donations to nonprofits declined in 1990 and 1991 in constant dollars. Private donations, which account for at least one-third of nonprofit revenues, did better. Though slipping by 1.3 percent in 1990, they have consistently outstripped inflation and in most years have outpaced the rise in per capita income as well.
"Even in tough times, it seems those who have a record of giving are continuing to do so very close to the levels that they always have," says John Thomas, head of public affairs for the Washington-based Independent Sector, a nonprofit coalition.
Even so, public generosity can't keep pace with growing demands. So nonprofits are trying to make up money shortfalls through leaner management, pooling of resources, jointly sponsored programs, and merging when the going gets rough.
Many organizations are not keeping positions open as staff turns over, says Coolbrith, who has seen a sharp decrease in the number of nonprofits paying for staff training at the Boston support center.
CARE moved from New York to Atlanta to cut overhead costs. The National Audubon Society cut back on staff and administration.
The United Way scandal earlier this year sent out warning ripples. Many charities took a fresh look at their governing boards and accountability systems. United Way of America head William Aramony resigned in March after disclosures about lavish perquisites and a $390,000 salary caused a public uproar.
Public trust appears to be unscathed, however. United Way's Rochester, N.Y., drive - the only one so far complete this year in the nation - missed its $38 million goal by just 5 percent.
That is the same shortfall as last year. Charity executives say donors are insisting on more "bang for the buck" this time around.