Charities Feeling The Pinch This Holiday

Retailers aren't the only ones vying for your holiday dollars, since it's also the season of giving to charity. But as CBS News correspondent Priya David found, the economic downturn has made it a tough time to be in the business of receiving.

Several charities say their donations are down, so while there are more people in need, resources to help them are thinner than in years past.

Come to New York during the holidays, and you'll find a city steeped in seasonal tradition. From the world famous window displays along Fifth Avenue, to the one and only Christmas tree at Rockefeller Center. But listen closely and you're certain to hear fewer bells.

That's because the Volunteers of America decided not to hire their sidewalk Santas. It's the first time in their 106-year history that Santa won't be collecting change.

"It's a colorful and festive tradition and we're a little sad about it," said Rachel Weinstein, of Volunteers of America.

Call it the year without a Sidewalk Santa. Volunteers of America says in these tight economic times, their Santas just wouldn't make the tens of thousands of dollars they need to fund their important food voucher program.

"Our real mission in this program is to feed the hungry," Weinstein said. "I mean that's our tradition. That tradition is not going away."

While the Santa suits will remain in storage, their bell-ringing brethren from the Salvation Army plan to place as many as 25,000 collection kettles throughout the country, each manned by a volunteer.

Nationally, last year's kettle program took in a record $118 million. Topping it will be a challenge -- so far donations this year remain flat.

But sales are up at their thrift stores -- big time.

"During this past year, the numbers have increased by $330,000," said Major Dennis Gensler of the Salvation Army. "That's a significant increase in the number of customers that are actually in our stores."

"I find all the bargains I can, second hand clothes, second hand anything," said thrift store shopper Maria Aiello.

Goodwill Industries has also seen an increase at their stores -- up by more than 7 percent compared to last year -- though more shoppers hasn't meant more donors.

"The donation flow becomes a barometer for tough economic times, and what we're experiencing now is sales are up, donations are down," said Jim Gibbons, CEO of Goodwill Industry International.

But the extra money coming in from sales doesn't make up for the drop in donations. Fewer people giving even less has forced some nonprofits to lay off staff in order to reach financial goals.

"We are obviously having the same concerns as I think everyone in this country and probably every non profit organization," said Susan Davis of the American Lung Association

The American Lung Association recently let go 14 full-time staffers, reducing its workforce by 15 percent.

"Those employees are with us for most of December and we are in the process of figuring out how we are moving forward," Davis said.

Part of that plan includes increased use of the Internet where, according to a recent study of online consumers, 89 million people are expected to donate during the holidays.

The Web is also where you'll find the Volunteers of America now using a "Virtual Santa" to accept credit cards instead of coins.

The American Red Cross is also strengthening their online efforts in order to reach a year end goal of $100 million, and to help they've hired the company behind Barack Obama's successful Internet fundraising efforts.