Cutting Back On Charity

As economic troubles swell the ranks of needy Americans, many charities are contracting rather than expanding - the result of a distinctively daunting year for fund-raisers.

Charity officials say their task in 2002 was complicated by multiple challenges - not only the waves of layoffs and stock-market plunges, but also eroded trust in some institutions, anxiety over a possible war and donor fatigue after the generous response to the Sept. 11 terrorist attacks.

Comprehensive nationwide donation statistics for 2002 won't be available for several months, but interviews with officials of national charities, and an Associated Press survey of 126 charities in 44 states and the District of Columbia made clear the breadth of the problem.

Of the surveyed charities - contacted from Jan. 11-20 by AP reporters around the country - 66 said donations were down from 2001, 38 said donations were up, and 22 said their financial picture was stable or not yet determined. Some hard-hit charities are laying off employees or leaving vacant posts open; others are considering possible service cutbacks.

Many local chapters of the American Red Cross were among those suffering declines. National vice president Michael Farley said direct-mail donations for most chapters were down more than 20 percent at a time when needs were increasing.

"At the end of the calendar year, you usually see a spike in giving in the holiday season, but this year that spike wasn't as dramatic," Farley said.

Red Cross chapters in Denver and the San Francisco area each reported 26 percent drops in donations. Montana's Red Cross chapter - formed just two years ago - cut its budget nearly 10 percent as donations fell 30 percent below expectations.

"Our major donors can't give as much," said Montana manager David Morikawa. "They tell us they wish they could give more, but with the uncertainty, they feel they cannot."

United Way donations also were down in La Crosse, Wis., and Tampa, Fla.

"We rely on people's generosity but that's one of the things people can eliminate or reduce when they face increased costs in other areas," said the Tampa agency's president, Doug Weber. "The future is not so certain. We might go to war. People are not sure if they'll have a job."

Contributions to the Salvation Army in Idaho's Canyon County dropped by $100,000. To keep services intact, full-time positions are becoming part-time, said Capt. John Stennett.

The Red Cross chapter in California's Riverside County expects to be down $400,000 from 2001-2002. "It's going to mean staff reductions, potential office closures," said chief executive Pamela Anderson.

Philadelphia's Red Cross chapter has already laid off 13 employees, with administrative posts being sacrificed to keep the disaster response division intact.

It also was a tough year for several Roman Catholic-affiliated charities - including Baltimore-based Catholic Relief Services and Associated Catholic Charities of Memphis, Tenn., where the $250,000 intake was about $100,000 below normal.

Catholic Charities in Cleveland, after five years of gains, suffered a 7 percent drop in 2002. Its chief executive, Tom Mullen, blamed the church's sex abuse scandal as well as the troubled economy.

"I certainly believe there are some folks whose trust was eroded with the church," Mullen said.

Donor wariness extended beyond Catholic charities, however. David Gillig, executive director of the San Diego Children's Hospital Foundation, said donors in 2002 were more likely to stipulate how their gift should be used and to request a charity's financial reports.

Said Megan Hansen of the Red Cross of Greater Indianapolis: "There's a decline in the public trust of a lot of institutions, including the nonprofit sectors."

Allegations of mismanagement plagued the Washington-based United Way of the National Capital Area, which has laid off 28 of its 76 full-time employees. It expects donations to drop by a third this year.

Some charities were able meet their 2002 goals because they set modest targets. For example, Aloha United Way, Hawaii's largest United Way chapter, raised $14.3 million in 2001, set a goal of $13.2 million for 2002 because of worries about the economy and barely met the target. A $240,000 gift from a foundation late in its campaign saved the day.

A $50,000 check dropped into a kettle on Christmas Eve allowed the Salvation Army in Salt Lake City to reach its goal.

There were some clear-cut success stories - United Way of Central Alabama raised $31 million, up 4 percent from 2001; CARE USA's Chicago office, which serves 12 states, raised $2 million, compared to $1.9 million in 2001.

And some relatively small charities fared well. Women's Way, which provides rape counseling and other services in greater Philadelphia, boosted donations more than 10 percent. Sistercare Inc. in South Carolina, seeking money for a new shelter for abused women, collected $299,091, up $55,000 from 2001.

In California, United Way of Silicon Valley expects to better is 2001-2002 fund-raising despite grave regional economic problems.

"Even in workplaces with substantially fewer employees, the overall contribution results are the same or greater," said Steve Heath, marketing director for the San Jose agency. "The employees in many cases are actually giving more per capita."

United Way of the Black Hills, based in Rapid City, S.D., squeezed past its 2002 goal of $1.7 million by just $25,000 on the last day of the year. "I've been here 10 years - this is the hardest year we've had," executive director Renee Parker said.

By David Crary