Much has been given, much is still to be done
Americans have given generously in 2005, reaching into their pockets, purses - and even piggy banks - to respond to the Asian tsunami and the Gulf Coast hurricanes. Are people willing to do a little more?
That's what many nonprofit groups are wondering as the traditional charitable "giving season" gets under way. Fifty percent of all donations by individuals take place in the five weeks between Thanksgiving and New Year's.
But in this unprecedented year, many are concerned about "donor fatigue" - people feeling they've already given their limit. They see signs of that in the slower, smaller response to the Pakistan earthquake and in the depleted coffers of local charities. Some donors have redirected their usual giving from community groups to address the major emergencies.
Sue Stevens, who works at the University of Texas in Arlington, for instance, has always given to several local charities. But that won't happen this year, she says, because when hurricane Katrina hit Mississippi, it forced three of her elderly relatives to evacuate a severely damaged retirement home and destroyed another relative's house. "People who were once just on our Christmas card list suddenly needed money that would have gone to local charities," Ms. Stevens says. "I imagine this may be magnified many times across the nation."
Those who keep tabs on - and give ratings to - charitable organizations, agree that the concern is legitimate. "We do see evidence of donor fatigue at the local level, affecting food banks, homeless shelters, after-school programs," says Trent Stamp, executive director of Charity Navigator, which evaluates the financial health of 5,000 charities.
"We are developing a situation where you have a 'have' and 'have not' world of charities," he suggests. "The big charities did very well this year ... they're high-profile and doing work benefiting those you saw on your TV screen. But ... local charities are getting hammered."
In fact, Americans have given less to social service agencies in each of the past three years, says Daniel Borochoff, head of the American Institute for Philanthropy, another charity watchdog. "Now those groups are being asked to take care of more people."
Robert Smith, a small business owner in Rockford, Ill., says his giving flows locally from stories that "pull my heartstrings." His first commitment is to tithing at church, but he's also given to a homeless shelter, a youth group that teaches kids to play chess, and - after seeing the 2004 movie "Monster" - to a woman's shelter. He responded to Katrina by locating and helping an evacuee who moved to Rockford. "Last year, I gave $10,000, and this year will give more because I made more," says the young African-American.
American giving overall is still robust. According to the Giving USA Foundation, charitable contributions by individuals, corporations, and foundations reached about $250 billion in 2004. And donations to the 400 biggest charities grew by 11.6 percent last year, says the Chronicle of Philanthropy.
Religious organizations are historically the greatest beneficiaries. Last year they received $88 billion (35.5 percent of all donations), followed by educational institutions (13.6 percent) and health agencies (8.8 percent). Only human-services organizations and international aid groups saw a decline in 2004 (when adjusted for inflation).
This year, the outpouring for disaster relief has reached at least $1.6 billion for the Asian tsunami and $2.7 billion for the Gulf coast hurricanes, as tallied by Indiana University's Center for Philanthropy. So far, about $43 million has been raised for the earthquake in South Asia. The Internet played a huge role by spurring a quick response, a boon to donors and recipients alike.
"For Katrina, more than 50 percent of all giving by individuals was via the Internet," Mr. Stamp says. "And it allowed low-level donors to participate - people who were always reluctant and embarrassed to pick up a phone and say they'd like to give $10."
Nonprofits gained new donors and trimmed the time and cost of appeals.
"We've had more than 100,000 new contributors on the Internet in 2005, and it has cut fund-raising costs significantly," says Charles MacCormack, president of Save the Children. "That allows us to spend more of the contribution on the program."
Some see donor fatigue in the smaller response to the Pakistani earthquake, but others say the tsunami was an unusual case.
"The tsunami was an incredible thing that happened around the holidays, when people were in their homes full of good things, and saw it all on TV - children being orphaned; roads, bridges, and homes being wiped out," says Patrick Rooney, research director at the Center for Philanthropy.
Response to the earthquake has been more a return to normal patterns, he says, in which Americans typically donate $10 million to $25 million for a disaster.
Yet others say the earthquake is on a scale that deserves more support, and that the world situation demands it.
"I would encourage people to hold off on endowment campaigns and things that can wait, and address the human suffering of the 800,000 people without shelter in Pakistan," says Mr. Borochoff. "We are trying to build better relations with the Islamic world." Indonesians, he points out, had a much more favorable disposition toward the US after the help Americans gave for the tsunami.
Only 2 percent of US charitable giving typically goes to international aid. Yet some are encouraged by what has happened in 2005. The tsunami brought new attention to the vulnerability of children and families around the world, Dr. MacCormack says. People are now responding to needs for long-term development, and Save the Children has seen a significant boost in donations for child health, girls' education, and HIV/AIDS orphans.
Major US charities are also encouraged. At a recent meeting of the 30 largest YMCAs, it was noted that annual campaigns in early 2005 averaged a 7 percent increase over 2004, says Carol Schmidt, senior financial development consultant for YMCA of the USA. People have also contributed more than $2 million to a hurricane fund to help YMCAs on the Gulf Coast.
"Staff whose homes were blown away are still living in tents next to the Y, running programs to help those in need," says Ms. Schmidt.
There is no disputing the fact that charities face mounting competition at the same time they are feeling the pinch of rising costs. Small local groups don't have the resources of major charities for ambitious fundraising.
"Though people have given to disaster relief, it's important to remember that the nonprofit sector plays a key role in our local communities," Dr. Rooney says. "Donors need to keep giving; if these disasters show anything, it's the need to have a well-funded infrastructure and be prepared."
If funds are tight, it's important to do the research and find the best charities.
"If you have less money to buy kids presents, you shop around for exactly the right thing," Stamp says. "So be a smart shopper for your charity."
To encourage more giving, the US Congress passed a post-Katrina bill in September that raises the tax deduction for any charitable contribution this year to 100 percent of an individual's adjusted gross income.
Before you write a donation check, nonprofit watchers recommend you take these steps:
Have a plan. Decide which causes are most important to you, and how much to budget.
Identify charities. Develop a list of charities that address your priorities. To allow for a tax deduction, be sure a group is a 501(c)(3) registered by the IRS. A good source for this information: www.guidestar.org.
Research. Check ratings given by watchdog groups such as Charity Navigator (www.charitynavigator.org), the American Institute for Philanthropy (www.charitywatch.org), and the Better Business Bureau's Wise Giving Alliance (www.give.org) to learn which charities use money most effectively (at least 75 percent devoted to services). Check charity websites for program descriptions and progress reports. Call them with any questions.
Weigh short-term and long-term programs - While emergencies call for immediate aid to relief groups, rebuilding and ongoing support are carried out by other organizations.
Donate via the Internet. Charities can cut fundraising costs, devote more resources to services, and provide you updates on their efforts.