From today’s USA Today:

It’s a hard time to be a charity

By Kevin McCoy and Oren Dorell, USA TODAY
Every year for the last decade, the Child and Family Network Centers, a small, Virginia-based non-profit, submitted a fundraising request to the Freddie Mac Foundation.
And every year, the charitable arm of the mortgage-finance giant contributed thousands of dollars that helped the non-profit provide education and support to hundreds of needy children.

But this year’s $350,000 request went to the foundation in early September – days before the federal government took over Freddie Mac and mortgage sibling Fannie Mae amid rising losses. Now, both firms’ charitable grants, questioned by some as politically motivated, are on hold pending a Federal Housing Finance Agency review.

“We are in deep trouble if we don’t hear something soon,” says Barbara Fox Mason, the non-profit’s executive director. “That’s the money we count on to carry us through to the holidays,” when other contributions arrive.

FHFA Director James Lockhart wrote on Oct. 2 “it is envisioned” that Fannie and Freddie “will continue to make charitable contributions.” Corinne Russell, an FHFA spokeswoman, said Friday no final funding decisions have been made.

“If it doesn’t come through at all, we’ll have to cut families,” says Mason.

The economic crisis threatening the nation with the worst recession in decades has set off tremors among non-profits and charities large and small that rely on donations from Wall Street, industry and average Americans.

Continue reading ‘USA Today: “It’s a hard time to be a charity”’

The Tennessean has a story today on how the nonprofit community is preparing for a possible drop in donations. CNM’s Lewis Lavine, Meg Nugent of Nashville Adult Literacy Council, and Hal Cato of Oasis Center, among others, are cited:

Charities expect drop in donations next year

By Bob Smietana
THE TENNESSEAN

Lewis Lavine has some good news and some bad news for local charities.

The good news is that most of them will make it through the end of the year without much trouble. The bad news? Next year is going to be a bear.

“We believe 2009 will be a very difficult year,” said Lavine, director of the Center for Nonprofit Management in Nashville.

Despite the economic turmoil, local charities say they are holding their own right now. While demand for their services is up, donations have yet to drop dramatically. But some charities fear that donations may fall next year while the need for help grows.

Jaynee Day, of Second Harvest Food Bank of Middle Tennessee, says requests for food boxes are up almost 10 percent over last year, and most of those requests have come from people who have not needed help until now.

“It’s a tough time for families, who are having to decide between putting food on the table or paying the light bills or the health insurance,” Day said.

Second Harvest, which distributes food in 46 counties, is in the middle of its biggest fundraising campaign of the year.

Now’s the time to prepare for the gathering storm of need, experts say.

Continue reading ‘Tennessean Examines Area Nonprofit Challenges’

So says a wealth researcher at Boston College. The Chronicle of Philanthropy reports on the findings:

Charitable Giving Might Not Melt Down, Philanthropy Scholar Predicts

Even with the steep stock-market drops of the past week, a prominent wealth researcher at Boston College says philanthropy may not suffer a financial meltdown as dire as some fund raisers fear.

Extrapolating from data on charitable giving in the last recession, John J. Havens, a researcher at Boston College’s Center on Wealth and Philanthropy, told a conference of fund raisers that it may be a year before the troubled economy begins to take a toll on the sums charities collect.

More important, he said, unless national incomes drop sharply, the decline in giving may not last long or be significant.

The current crisis is similar to the conditions nearly a decade ago, said Mr. Havens, at a conference on “The Supply and Demand of Philanthropy in the 21st Century,” sponsored Boston College’s Center on Wealth and Philanthropy, the Association of Fundraising Professionals, and the Eaton Vance Investment Council.

Continue reading ‘“Charitable Giving Might Not Meltdown”’

The Tennessean reports today on organizations like Alive Hospice, and what they are facing due to the challenging economic times:

While Congress debated passage of a $700 billion financial-market rescue plan last week, a 1.1 percent adjustment in pay for the nation’s hospices was phased out.

For Jan Jones, chief executive of Nashville-based Alive Hospice, the cut, which equates to $1 million over three years, was bad news. Smaller hospices with fewer resources could be hurt even more, Jones said, leading to cutbacks in end-of-life care for many patients and fewer services in rural areas.

Separately, Tennessee hospices already were bracing for an average 2.5 percent decrease this year in Medicare reimbursements related to wages of their nurses and therapists not rising as much as in other urban areas nationwide, said Mike Dietrich, executive director for the Tennessee Hospice Organization, a trade group.

“It could potentially create an access problem,” he said.

Continue reading ‘Tennessean Reports on Nonprofits Facing Cuts’

Lewis Lavine, President of the Center for Nonprofit Management sent out the following email to our members this morning:

To our CEO Network members:

This is a challenging economic period. Corporations, foundations, and governments find their assets are much lower than they were months or even weeks ago. This will result in the reduction of philanthropic donations, inevitably causing the nonprofit sector to bear the burden. In my discussions with local donors, I learn that they are very concerned about the health of our nonprofit community, particularly during the next year.

We want to get ahead of this curve. At the Center for Nonprofit Management, we are taking three immediate steps to help you prepare for a difficult time:

1. We are creating a CNM SWAT Team made up of our experienced consultants. The team will be available to assist you in evaluating your financial picture, determining whether growth or restriction makes sense, meet with your board, or consider collaborations you might begin with other agencies. Although we must charge for our services, we will make our Nonprofit Excellence Funds available so that it will be more affordable. Lisa Pote, our Director of Consulting, will provide additional information about this opportunity in the days ahead.

Continue reading ‘A Message from CNM President, Lewis Lavine’

Every Tuesday, The Chronicle of Philanthropy has a great online discussion on various topics impacting the nonprofit sector. Today’s topic was on compensation.  Here is a portion of the transcript that features Susan Egmont,  president of an executive search firm in Boston. You can read the full discussion by clicking here:

Question from Peter Panepento:
How do you see the current economic picture affecting executive compensation in the nonprofit world? Do recessions tend to have much of an impact on salaries in this sector?

Susan Egmont:
Nonprofit organizations are nervous right now (as are we all!). For organizations funded by government, tax collections are less than projected, and State budgets are being revised downward. Some of those cutbacks will be made in funding to human services, environment, arts and education and healthcare nonprofits. At the same time, employees may be seeing increases in food, housing, child care and other necessities. I expect most organizations will try to keep up with the cost of living, but larger merit increases may wait until there is a sense of more predictability. On the flip side, an executive who is “rainmaker” and can assure the board of the ability to meet the budget will be highly valued and may be able to ask for a salary that will insure s/he isn’t looking elsewhere.

The Chronicle of Philanthropy addresses how the Wall Street crisis will impact the nonprofit workforce:

The crisis on Wall Street – and the likelihood that billions in federal money will be spent soothing it – portend an era when government will need to turn more eagerly than ever to nonprofit organizations to serve social needs, said experts speaking Monday at a conference here on the state of the nonprofit work force.

The federal government is “going to have to find more efficient ways to do more,” said Paul Schmitz, president of Public Allies, a group with headquarters in Milwaukee that prepares young people for nonprofit jobs.

Lawmakers need to be educated about the role the nonprofit world can play in furthering their goals for society, he said. “This is a place when they can move things quickly, get them on the ground working.”

Continue reading ‘Nonprofit Conference Discusses Implications of Financial Crisis on the Nonprofit Community’

The Tennessean has a story today on the funding issues facing nonprofits:

Financial services firms and their well-paid executives have historically been generous givers to museums, colleges, hospitals and social service organizations, both in New York and around the globe.

Now, nonprofit administrators are watching the crisis on Wall Street with queasy stomachs as reliable donors like Lehman Brothers, American International Group, Merrill Lynch and Bear Stearns change hands or go belly up.

For now, the firms that have taken over struggling companies aren’t saying what they’ll do, and it may be months before charities learn whether pledges are being honored.

“We’ve got a big question mark hanging over our heads,” said Marsha Stein, executive director of Citymeals-on-Wheels, a group that relies heavily on private donations to deliver food to 18,000 homebound New Yorkers.

Bear Stearns employees, alone, she said, were good for about $500,000 in donations to Citymeals each year – generosity due partly to the firm’s requirement that its 1,000 senior directors contribute 4 percent of their annual compensation to charity.

That support came into question overnight when the firm disintegrated in March and was purchased by JPMorgan Chase.

The crisis is likely to hit nonprofits on several fronts, said Gordon J. Campbell, president and chief executive of the United Way of New York City.

Troubled firms may slash corporate giving while they focus on their own problems. Wealthy individuals may scale back as well as their stock portfolios lose value and their pay bonuses vanish.

And with tens of thousands of layoffs expected, local income tax revenues are expected to slide, meaning that there will be less government money for social service organizations, even as the number of needy people rises.

“We could see an exponential increase in need and potentially fewer dollars coming in the door,” Campbell said.

Even now, some past beneficiaries of Wall Street largesse are trying to determine whether major pledges made by struggling firms will be paid.