Charity Donations Down, Demands Up

By DAVID HALDANE

Dec. 17, 2001 12 AM PT

TIMES STAFF WRITER

Volunteers at an Orange County food bank always feared that one day the unthinkable would happen.

In November, it did.

For the first time in its 23-year history, the Episcopal Service Alliance’s Anaheim facility ran out of food.

“The warehouse was simply empty,” said the Rev. Karl Ullrich, alliance director. “We may sometimes be out of money to help with the rent, but we always have food.”

The shortage reflects the extraordinary dilemma faced by charities in California and across the nation. It’s been well-documented that donations to many charities have slumped, even though the Sept. 11 terrorist attacks have prompted an unprecedented outpouring of contributions to some causes.

“It’s like fishing in a pond,” Ullrich said. “There are only so many fish, and people have only so much money. We are in the giving business, but when you just don’t have it to give, you begin to question what you are doing.”

The problem is more complicated than the simple equation that donations for Sept. 11 victims mean fewer donations for others, however.

Part of the difficulty stems from how and where Americans often send their charity dollars. The anthrax scare and stock market slump have also played a role, as has what some social service providers call an anti-immigrant backlash.

When combined with the timing of the attacks--just before year-end fund-raising drives--these and other factors have created special challenges for nonprofit organizations all over California and the country.

Still, some experts suggest that the crisis may give way--as have other post-disaster periods--to a mushrooming of generosity, maybe even a new Golden Era for local charities.

But that might not happen any time soon, according to a statewide survey released this month that documents the depth of the problem.

Together, 413 nonprofit agencies providing “safety net” services throughout California reported an estimated $25-million drop in donations--a 5% to 10% decline--since Sept. 11.

“For nonprofits, this is pretty dramatic,” said Steven LaFrance, a San Francisco-based consultant who conducted the survey for California Cares, a coalition of major philanthropies. “We’ve never seen this happen in such a short time frame.”

The group, formed last month to address the problem, includes United Way, the Southern California Assn. for Philanthropy and the California Endowment.

LaFrance attributed the decline in contributions to two factors: the huge amounts of money and goods sent east for Sept. 11 relief efforts, and a general backlash against immigrants because the terrorists were foreigners.

“There’s a fear around,” he said. “We have a sense that the nonprofits serving low-income communities, which are often immigrant communities, are not being helped by the anti-immigrant sentiment.”

That concern was echoed by some human relations officials.

“There’s no question that what we’ve seen is an increased level of hostility and discrimination against the immigrant population,” including those of non-Middle Eastern descent, said Robin Toma, executive director of the Los Angeles County Human Relations Commission.

But that is only part of the equation, experts say.

Americans gave about $204 billion to philanthropic causes last year--an amount dwarfing the $1.3 billion in Sept. 11 gifts. At least half of last year’s sum, however, went to religious and educational institutions, leaving many smaller interests, such as social services and the arts, to fend more for themselves.

Large nonprofit groups with reserves can weather dry spells, but for smaller charities, “a small decrease in their annual giving could make a big difference as to whether they live or die,” said Paul Light, a Brookings Institution expert on nonprofit organizations.

“I think you could make the case that we’re on the precipice of what I would call a great winnowing in the [charitable] sector,” Light said.

The plight of smaller charities has been exacerbated, LaFrance said, by another problem: increasing demands for services--demands prompted by business losses since Sept. 11, often in the travel and recreation industries.

In the survey of California nonprofit groups, for example, 60% of the agencies said demand for their services had increased 20% to 40%.

Catholic Charities, which estimates a 50% to 60% decline in contributions for the Los Angeles metropolitan area, has seen a 22% increase in demand for services since September. A job program the group runs in Orange County used to place about 30 people a month, some in the tourism industry. Now it places about eight.

“So many companies have closed that requests from employers are down,” said Lupe Savastano, outreach program director.

The kind of client served by Catholic Charities is changing too. Some people accustomed to being donors now find themselves uncomfortably at charity’s receiving end.

A new client in Los Angeles was a case in point, said Jackie Lazarus, director of Catholic Charities’ metropolitan Los Angeles region, which had to turn people away from its annual Thanksgiving dinner because demand was too great.

“Until Sept. 11,” she said of the new client, “he had an international tourism business and made between $90,000 and $100,000 a year. Now he doesn’t have a single contract left and he and his family are facing homelessness.

“They have two young children and came in asking for a month’s rent, food, diapers and a car payment. We gave them half of their rent [about $600] and 10 bags of food.”

Other agencies have been hit in different ways. Concerned Women for America, a Washington-based organization pushing pro-family public policy positions, had the misfortune of receiving its mail through the same post office that unwittingly delivered anthrax-laced letters to two U.S. senators.

When the post office was closed for decontamination, board Chairwoman Beverly LaHaye said, “We went for two weeks without any mail.”

The result: a 75% decrease in income for the critical month of October.

“The money has finally started trickling in,” she said. “But I don’t know that we’ve recovered even half of it.”

Proyecto Pastoral, a social service agency primarily serving low-income Latinos in Boyle Heights, experienced a 20% loss of income from charitable foundations forced to withdraw their support because of major stock market losses after the attacks.

“We’ve had to lay people off in order to keep afloat,” said Executive Director Leonor Lozano-Ramirez, whose agency has seen its weekly food lines double--to about 300 people--over the last three months.

Some nonprofit groups are tackling the situation in innovative ways.

The Orange County Community Development Council, which operates food banks and child care centers, is negotiating with agencies in New York to return donated food to California, possibly by rail.

“New York was buried in millions of pounds of food that it didn’t need,” said director Mark Lowry, whose agency has seen a 10% decline in donations and a 20% increase in demand.

The situation is so bad, he said, that he had to delay ordering food he had hoped to deliver to his clients by Christmas.

“I don’t think it’s ever been quite this desperate,” he said. “I’m already in a panic.”

California Cares kicked off a statewide media campaign this month encouraging people to remember local charities.

“It’s the giving season,” said Dr. Robert K. Ross, president of California Endowment. The Los Angeles-based health care agency gave $13 million to help the cause.

“December is critical for nonprofits,” Ross said. “We’re asking people to please keep giving to their local charities if they can.”

Orange County’s United Way--working with 20 other chapters nationwide--has launched an Internet-driven campaign called “One Day’s Pay” that encourages people to give all or part of a day’s wages to local charities.

And Lutheran Social Services, which has seen a 40% drop in monetary gifts coupled with a 200% increase in demand in Southern California, has been forced to cut costs, said President John Clawson.

Among the savings measures: shutting down a counseling service, laying off 40 part-time staffers, eliminating the purchase of new “sticky notes” and hand-delivering 50,000 fund-raising letters in bundles to local churches instead of paying the postage.

A handful of area companies has stepped forward to help turn the tide.

Pacific Park, which operates an amusement park on the Santa Monica Pier, kicked off a 14-day campaign this week rewarding customers with discounts for donating food to the Los Angeles Regional Food Bank.

And Mattel, the toy manufacturer headquartered in El Segundo, has boosted its toy donations this holiday season by 52%.

“We believe that special times require special efforts,” said Bryan Stockton, the company’s executive vice president for business planning and development.

Some experts believe that such sentiments represent the wave of the future.

According to studies conducted by the Center on Philanthropy at Indiana University, generosity tends to accelerate after a major crisis, such as President John F. Kennedy’s assassination, the Persian Gulf War and the Oklahoma City bombing.

In fact, the center’s studies show, American giving has increased every year for the last 40, with one exception--1987, when major changes in the tax law were seen as detrimental to donors.

More recent studies suggest that the historic pattern of generosity is likely to continue.

In a survey by the Indiana center of fund-raisers for nonprofit groups, 56% of the fund-raisers said they didn’t expect Sept. 11 giving to still be hurting local charities six months from now.

And a study conducted by Wirthlin Worldwide for the Independent Sector, a coalition of nonprofit groups, found that 59% of the people who contributed to Sept. 11 relief efforts said they expected to give as much as they usually do to other charities this year. And 14% said they planned to contribute more.

All of which is seen as a positive sign by fund-raising experts.

“My hunch is that there will be sort of a rise in philanthropy, community involvement, volunteering and giving over the next couple of years,” said King McGlaughon, director of the New Jersey-based Center for Philanthropy and Nonprofit Management. “Nonprofit organizations simply need to get themselves well-positioned to engage that.”

Eugene Temple, executive director of the Indiana center, agrees. “We may be creating a more civic generation,” he said.

Peter Shiras, a senior vice president for Independent Sector, brings it all down to the basic human level. The terrorist attacks, he said, appear to have mobilized numerous first-time donors “who were moved to give by this first event, and realize that . . . it doesn’t hurt. In fact, it feels good.”

Wise giving: Is the group you’re helping really helping out? C2

Times staff writer Myron Levin contributed to this report.