Tough times for stepping up
Americans struggle to flex their charitable muscle in today's lean economy. But giving still rises, slowly.
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Corporations, facing difficult economic circumstances of their own, are struggling to meet prior-year commitments. Finally, giving by foundations is expected to be flat this year, and perhaps even in decline, according to the Chronicle of Philanthropy.Skip to next paragraph
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In part, that stems from shrinking assets held by foundations, which in many cases were invested in the stock market.
Charities most hurt by more stringent giving tend to be smaller organizations, many of them lesser known, or more community-based than national charities such as the Salvation Army or CARE.
Arts-based groups have been particularly hard hit, experts say, because of a decline in state tax revenues, which are often funneled to arts groups. Private donations, which appear to be rising, aren't enough to make up the shortfall.
Museums are also struggling to raise revenues. In many cases, attendance is down, as some people remain wary about venturing back into cities, where terrorist incidents might occur.
Still, those engaged in giving remain optimistic about Americans' generosity, while recognizing how financially strapped many are this year.
"More of the joy - and burden - of giving will need to be shared by individuals, perhaps more so than in more 'normal' times," says Arnoult.
"If you are in a position to donate, there is a great opportunity for doing so now," says Daniel Borochoff, president of the American Institute of Philanthropy, in Chicago. And don't forget international charities, Mr. Borochoff says, where need is also great.
Care should be taken over where a donor aims his or her gifts. Early problems with the distribution of Sept. 11 funds, Borochoff says, have made many Americans more skeptical about claims made by philanthropic organizations. Public pressure on charities to open their books has increased, he says.
Also, charities' accounting standards are being looked at far more zealously post-Enron. Questions have been raised, for example, about how United Way organizations count contributions. Some outside analysts believe that some count donations more than once to make their inflows appear more substantial than they actually are, perhaps seeking to encourage others to contribute.
When giving to a charity, you should always start by ensuring it is registered as a nonprofit organization by the appropriate state and federal authorities, according to the Better Business Bureau in Arlington, Va.
To do that, go to the GuideStar website (www.guidestar.org). Its database has information on more than 850,000 nonprofits.
Then, determine the percentage of total receipts used for program purposes compared with money spent toward fundraising or administrative costs. Most national organizations devote 70 to 80 percent or more of revenue for programs.
The BBB also counsels givers to beware of unknown charities that send "runners" to you in person, soliciting money. Most reputable nonprofit groups accept contributions through the mail, knowing that the donation will be just as important a week from today as now.