After the outpouring

America's charitable institutions are struggling to see past a lingering cloud of smoke.

More Americans than in recent years are now among the needy. Many have lost jobs or suffered other financial setbacks with the onset of a serious economic slump.

True, the Sept. 11 terrorist attacks triggered a wave of charitable giving. But its range of recipients has been somewhat limited, its distribution controversial, and perhaps most important, its continued duration is in question.

Last year, corporations, foundations, and individual donors contributed some $203 billion to charities (see chart, page 12). That represents a roughly 7 percent rise from 1999.

Whether charities post an increase in income this year won't be known until final figures are tallied many months from now, says Patrick Rooney, chief operating officer and research director of the Center on Philanthropy at Indiana University in Indianapolis. His estimate: While 2001 will not be a "spectacular year," donations should again be somewhere around the $203 billion level, probably slightly higher. In more normal years, where there is no political or military crisis and no recession, charitable giving tends to rise about 7 percent, he says. But even in years of recession, the amount goes up in unadjusted dollar terms, usually about 5 percent.

"The economy is faltering, and giving closely mirrors the economy," says Daniel Borochoff, president of the American Institute of Philanthropy.

Still, as Americans spend more time with their families and think more deeply about their long-range priorities, as they now appear to be doing, Mr. Borochoff says, "that should hearten the philanthropic impulse."

One problem affecting many charities this holiday season - the most important time for contributions - is that much of the recent giving (about $1.4 billion) has gone to New York-linked charities collecting money for families of Sept. 11 victims. As a result, nonprofits not related to the tragedy may have difficulty raising money the rest of the year (story, page 15).

New York contributions have clearly presented other special challenges. Money is only now starting to reach recipients. In part, the current outflow follows criticism directed at one of the largest philanthropic agencies: the American Red Cross.

The agency reportedly was not disbursing all of the more than $500 million in contributions made to victims of Sept. 11. Instead, it decided to hold onto more than $200 million in case of future attacks or for preparedness programs.

Now, the Red Cross has replaced its top officer, and officials say they have opened the tap on all of the funds. The organization has reportedly paid out about $50 million to some 2,600 families. But many families have not yet been contacted by the agency.

Page: 1 | 2