A year ago as stock markets plunged south, unemployment accelerated and Americans tightened their belts, the nation’s nonprofit organizations realized that they would have to cut costs and devise strategies to deal with reduced donations and battered endowments. From soup kitchens and homeless shelters to august institutions like the Metropolitan Museum of Art, which by the end of its fiscal year last June had cut staff by 14 percent because of a 30 percent loss in its endowment and substantial reductions in income, the economy’s meltdown has had a serious impact on charitable institutions. The Giving USA Foundation, which tracks American philanthropy, reports that charitable giving to human service charities dropped 15.9 percent in inflation-adjusted dollars last year.
Here in Fairfield County, nonprofits are coping with reduced donations while trying to meet increased demands from people facing hard times. We talked with six local charities about these challenges.
As president of an organization that makes grants to more than twenty-five human service agencies, Greenwich United Way’s Stuart Adelberg is a good source for learning how nonprofits are faring in today’s economy. “It’s very clear that there’s not an agency out there that’s not developing contingency budgets, not holding off filling jobs, not lowering salaries or not reducing expenses,” he says. “They are cutting back on everything they possibly can.”
Individual giving, corporate funding and foundation grants are down everywhere, he says, adding that agencies that rely heavily on government funding and endowments for operating expenses are in a particularly tough position.
United Way set a fundraising goal of $1.3 million for fiscal 2009 but fell 2 percent short when the year ended on June 30. “We thought that we were going to blow it out of the water because of our seventy-fifth anniversary gala,” Stuart recalls. “It was going to be a very fancy black-tie event.” But as the economy soured, plans for the April fundraiser changed. “We kept shifting. It was more low key, less expensive, not black tie,” he says. “We thought we’d have 450 people, we had 300 people. In the end, it was a wonderful celebration, and people appreciated that it was the right kind of atmosphere considering the period we are in.”
Along with cutting expenses, freezing salaries and reducing employee benefits, United Way has become more sensitive to its donors’ financial situations, Stuart says. “We don’t know who’s in danger of losing a job or seen their investments go down. We need to be clear why we need their dollars, but we also need to say that we understand that not everybody can now give. We need to be welcoming about any contribution of any size.
“I haven’t had a conversation with anybody [running a nonprofit] who doesn’t come right out and say, ‘This is the toughest time we’ve ever been through, but we’re not going to fail. We will do what we need to do.’ It’s pretty inspiring.”
GIVING IN ANY WAY
Kids in Crisis (KIC) operates two emergency residential shelters for children, twenty-four-hour crisis counseling for families and children and a range of community programs serving Greenwich, Stamford, Darien, New Canaan, Norwalk, Weston, Westport, Wilton and Ridgefield. Sixty-five percent of KIC’s income is raised from private sources and the rest comes from government and United Way funding. Like most nonprofits, says the agency’s executive director Shari Shapiro, “This past year has been extremely tough on us.”
Last December after the recession had arrived, the agency looked over its $5.2 million budget for fiscal 2009 and cut it by $300,000. In the spring, “when we saw that donations were not picking up at a level that could sustain the organization,” Shari says, “we made further reductions for a total of $900,000.” KIC has set its budget for fiscal 2010 at $4.3 million.
In making cuts, she says that the theme at every staff meeting was how do we do this without impacting the kids that need us? The agency combined trips to schools and doctors’ appointments and shopping, saving fuel, consolidated staffing where possible, and increased the use of volunteers. Managers volunteered to cut their salaries, which Shari describes as “one of the things I’m most proud of and touched by.”
The agency’s signature fundraiser is an annual hoedown in the spring. This past year’s benefit, called Hoedown Goes Back to Basics, drew half the number of people and raised half the revenue of the year before, according to Mary Vinton, the agency’s development director, even though it was a “bare, basic kind of event.”
“We’ve really reached out to donors who say, ‘I can’t write that check, but I can make dinner for the kids,’ ” Shari says. “We have dinner donated by families in the community probably four or five times a week. And it’s not an easy undertaking. You are generally cooking for about fifteen people.”
While KIC’s income has fallen, “Our outreach program and our in-house program have seen a 35 percent increase in calls to the agency as well as kids that need to come here,” Shari reports. Foreclosures and stress levels have risen not only in poorer parts of Fairfield County but even in Darien and New Canaan, she says.
To reduce development costs, Mary has cut back on expensive mail campaigns and made greater use of e-mail solicitations. An e-mail relating a KIC staff member’s poignant experience with an eight-year-old boy who had been in multiple foster homes and was finally placed with a loving family raised $30,000. In another example of how Kids in Crisis helps its young clients, Sheri described a four-year-old boy at the shelter who was soaking all his food. It turned out, she says, “that there wasn’t a tooth in his mouth that wasn’t decayed. He couldn’t chew but had figured out how to eat by soaking the food.” A volunteer dentist at KIC’s medical clinic took out all of his teeth and fitted him with baby dentures.
“You hear these stories,” Mary observes, “and it’s easy to go to a donor and express the need we have.”
Near & Far Aid is an all-volunteer organization in Southport whose twenty-eight-member board makes grants to 100 nonprofit agencies operating programs from Greenwich to Danbury to Stratford. This past year, the grants ranged from $2,500 to the Children’s Community Development Center, a nursery school for low income families in Westport, to $35,000 to a Teach For America program in Bridgeport schools.
Like other nonprofits, Near & Far Aid’s fundraising has been hit hard by the recession. Its net revenue for fiscal year 2009 totaled $850,000, down about 30 percent from 2008, according to board president Patsy Devine. “All the agencies we support say that their fundraising is down at least 30 to 40 percent,” she adds.
Because more people were seeking help for basic needs, the group’s board decided last November to make food and shelter the focus of its funding priorities. “One agency, Healing Tree Economic Development in Bridgeport, told me that they could no longer house everyone in their dining room at mealtime so their staff was serving people on the sidewalks,” Patsy says. “That was very powerful.”
Near & Far Aid holds three annual fundraisers, a spring gala at Mitchells of Westport, a designer house tour in May and a golf classic in September. In planning last March’s benefit at Mitchells, Patsy says, “We were very creative in saving money to get the same lavish effect as before.” Desserts and drinks were donated, e-mails lowered paper and printing expenses and decorations were elegant but economical. Attendance was the same as in 2008, “but we struggled to get to $500,000 in the very high-end auction that usually nets $900,000,” she says.
At September’s golf classic, Near & Far Aid eliminated the large goody bags with sponsors’ logos that players received in the past. Instead, sponsors selected a charitable cause, and the money that would have been spent on goody bags was redirected there.
“We are looking for creative ways to be more responsible on the event side and have that impact the agencies in a positive way,” Patsy says. “The community needs to understand that in times like this, the need is even more amplified than they can possibly imagine.”
FAMILIES IN NEED
Bob Arnold, president of Family Centers, oversees thirty different programs in Greenwich, Stamford, Darien and New Canaan that run preschools, job-search training, school-based health centers and general and bereavement counseling. About 40 percent of the organization’s $11 million budget comes from government grants, 30 percent from private and corporate gifts, foundations and special events, and the rest from fees and endowment income.
In mid-2008, he says, the agency made about half a million dollars in cuts—eliminating three staff positions, cutting pension contributions and freezing salaries as of October 1—that enabled it to finish the fiscal year ending in June without a deficit. In the current fiscal year, Bob says, the recession has caused a substantial drop in corporate funding and foundation grants. “One foundation told us to apply for half of what we got last year,” he says. And fee-based programs are hurting because of people who’ve lost jobs and can’t pay the full fee.
Family Centers’ main fundraiser is a themed party held at a private home each year. In 2008 it netted $725,000, but this year’s college-reunion-theme party only raised $575,000 because of fewer high-end sponsors and lower ticket sales. To raise more money and increase its donor base, Family Centers has tried several new kinds of events, including a breakfast with CNBC anchor Maria Bartiromo on June 9. “We went after the finance industry and businessmen and businesswomen,” Bob says. “We got many new names, and we think we can repeat this.”
The recession has caused more people to seek counseling at Family Centers, even in Darien and New Canaan where, he says, “the bulk of people are middle and upper-middle income. We’ve seen a lot of families in distress because the main breadwinner lost his job, and they are taking their children out of private schools and putting them into public schools. It’s not a hardship to be in the public schools there, but it’s a crisis in a family if you are having to scale back very quickly.” At the Center for Hope in Darien where people with a life-threatening illness go for counseling, the agency is seeing more people who can’t pay for help, not only for counseling but for their medical care.
“It’s important for people in lower Fairfield County to know that their generosity is really having an impact,” Bob says. “Some people feel: ‘I can only give a hundred dollars, but my neighbor gives ten thousand.’ But one hundred dollars makes a difference.”
GETTING THE WORD OUT
The Family & Children’s Agency in Norwalk provides programs for youths and families and homecare help for seniors, runs a drop-in center for homeless adults, and operates foster care and adoption services. State contracts and fees account for about 80 percent of the revenue in its $11 million budget. An annual appeal, two benefits, major donor solicitations and foundation grants provide the rest.
Last fall, says FCA’s president and CEO Rob Cashel, “we began to have real concerns about the economy and our revenue streams.” The agency consolidated some positions, trimmed its pension plan and froze salary increases for the year. FCA’s services are at full capacity, he reports, adding that he expects more demand as unemployment figures go up.
In addition to cost cutting, Rob says, “it was important to solidify and maintain our funding streams. We became very, very aggressive in fundraising. There have been two theories out there: One is, how can you ask people for money when money is so tight? We did not go down that road. We decided to ask even more but in an appropriate way recognizing that people were going to give to the degree they could.” As a result, FCA’s last annual appeal brought in many new donors and raised more money than in 2008, he says.
Their major fundraiser in 2009 was a luxurious dinner dance on May 30 at a home in Wilton. It netted $280,000, similar to the amount raised the previous year, although it was attended by 250 people, compared with 185 at last year’s party. Sponsorships remained at the same level, but the auction raised less money. “I’m hearing that all over the place,” Rob says. “People are not bidding the way they have in the past.”
Agency visibility is critical in these times, he concludes. “The days that nonprofits can float under the radar and survive simply with their state contracts and their closest friends and maybe with support from United Way are over.”
PLANNING IN TOUCH TIMES
The Boys & Girls Club of Greenwich serves 2,300 kids ages six to eighteen and charges $12 a year for its after-school program and a nominal fee for summer camp. “You do the math,” says the club’s executive director Bob DeAngelo. “It doesn’t get you close to a four-million-dollar annual budget. So we depend on the generosity of others.”
When he and the board of directors first saw the economy in trouble, they projected a shortfall of close to $600,000 for fiscal 2009. “We immediately thinned out our part-time staff, didn’t fill empty jobs and let go several full-time staff,” he says. “We cut some benefits and had a procurement freeze where you had to get approval even to buy a pencil, basically.” In place of buying gifts for the annual holiday party, the club set up a gigantic craft room where the children made their gifts themselves, “Something the kids were really jazzed about,” Bob says. Decisions like this, combined with a successful annual appeal, helped the club break even on June 30 despite a 25 percent drop in its endowment.
To balance the budget, the club has sought donors for activities that it funded in the past. Instead of hiring an ice cream truck to visit the summer camp program, they got donors to fund it and visit the camp when the truck arrived. “You get the support, and the donor gets to see the kids enjoying the ice cream cones instead of just writing a check,” Bob observes. The club has also held more community-oriented events, such as a swim-a-thon and a basketball tournament. “You may not make as much money as with the high-profile things, but donors see where the money is going,” he says.
“If the economic wind is at your back, you look for new initiatives that can be funded without a whole lot of effort,” says Tom Ortwein, president of the club’s board of directors. “The challenge was to get more out of our existing people and tap the incredible pool of volunteer
talent to augment our staff. We found ways to cut costs but still deliver programming so the kids didn’t have to suffer,” despite having forty to fifty more children a day in its after-school program because of the economic downturn.
“We think that 2010 is going to be a big challenge for all the not-for-profits,” Tom predicts. “I think people are going to be very careful about what agencies they choose to fund. You’ve got to articulate your mission, and people have got to understand its importance in order
to sign on for meaningful support.”