Nonprofits edgy about downturn

November 15, 2008

By JOSH O'GORMAN Rutland Herald Staff Writer - Published: November 16, 2008

Many nonprofit groups raise a significant amount of their annual funding in November and December. But this holiday season, Vermont organizations are bracing for a decline in charitable giving as the economic downturn worsens.

So far though, officials from Vermont charities, nonprofit services and advocacy groups say they haven't seen a big drop in donations. Still, slowing consumer spending, the credit crunch and stock market woes have put many organizations on edge.

"I can say we're concerned, but I wouldn't say donations are down," said Judy Stermer, director of communications and public relations for the Vermont Foodbank.

Stermer said the food bank, based in Barre Town, hopes to raise $2.8 million this fiscal year, which began Oct 1. So far, the group, which serves 66,000 Vermonters through 270 local agencies, has raised about $115,000, out of the $1.4 million it needs to raise by the end of January. The Vermont Foodbank's annual budget is $5.3 million. The organization depends on grants, state and federal funding and corporate donations for a large portion of the rest of its budget.

"Typically, what we see is half of our fundraising is done over the next couple of months," Stermer said.

Despite the economic downturn, or perhaps because of it, the food bank is looking to raise almost a $1 million more than it did last year through donations. Stermer said demand has increased between 25 percent and 30 percent compared to last fall.

"Usually, we see a spike in need at the end of the year, with seasonal jobs ending, but we saw the spike much earlier this year," she said.

Stermer said the food bank recently sent out a direct mailing appeal for donations to about 35,000 donors, and it is promoting fundraising campaigns at supermarket checkouts and a food drive at 47 Chittenden Bank branches through the end of the year.

"We're cognizant of the economy slowing and that it might affect fundraising," Stermer said.

Like the food bank, the Committee on Temporary Shelter in Burlington is facing an increase in demand for its services.

"This summer the shelters were full and they're usually not, so we're expecting a real demand this winter," said director of development Kim Borsavage.

COTS is hoping to raise $250,000 – or 10 percent of its $2.5 million operating budget – between now and the end of the year.

In Rutland, the Salvation Army is facing the daunting task of raising half of its operating budget over the next few months even though it doesn't have enough volunteers to ring bells and man its 12 stations outside supermarkets and department stores in Rutland and Bennington.

Through Dec. 24, bell ringers will hopefully raise $70,000, about half the Salvation Army's budget, said Capt. Chuck Balcom, but because there aren't enough volunteers, it may have to hire bell ringers at $8 an hour.

"The problem is, that eats into the money we collect, plus they spend their time in the store keeping warm instead of outside ringing the bell," Balcom said of the seasonal employees.

Despite the economy and the shortfall in volunteers, though, Balcom was optimistic people would give this holiday season.

"We feel the need is great in this community, and people living here know what that need is and usually give generously," he said. "The main thing we want people to know is that the money raised in the community stays in the community."

The Brattleboro Area Drop In Center is also facing pressure to raise more money this holiday season, said executive director Melinda Bussino. This year funding decreased 14 percent while demand for the services grew 17 percent, Bussino said.

Nov. 21, the center will begin Project Feed the Thousands, which Bussino hopes will collect $125,000 and 21 truckloads of food for the center's food shelf. They will also mail out a fundraising appeal to more than 250 people, Bussino said.

Bussino said she is trying to be realistic about the center's fundraising goals.

"Many people make end-of-year donations based on the profit from their investments, and right now investments aren't too good," she said.

The American Lung Association, too, is seeing a decline in revenues from its Christmas Seals campaign, said spokeswoman Margaret LaCroix. Now in its 100th year, the association sends out Christmas Seals to 101,080 households and businesses in the state, which netted $111,019 in donations last year, LaCroix said.

"So far, we know the donations we've received are lower than last year," LaCroix said.

Conservation, media and advocacy

"It's early for us to have a sense of how it will turn out," said Gil Livingston, president of the Vermont Land Trust. "Definitely during this period of market volatility, people are waiting to see if the market will stabilize."

The Vermont Land Trust relies on funds from the Vermont Housing and Conservation Board for land protection projects. Last fiscal year it received $6 million from VHCB.

In addition, the Vermont Land Trust receives about $1.2 million annually from approximately 5,000 members. Donors contribute three-quarters of that money in the weeks between November and January, Livingston said. The land trust solicits money through a combination of direct mailing, phone calls and personal visits.

Despite the downturn in the economy, Livingston was optimistic Vermonters would continue to give generously.

"We have all kinds of confidence in the importance of conservation to Vermonters, and we have faith they will continue to be generous," Livingston said.

The Vermont Land Trust has a $4 million operating budget this fiscal year, which began July 1. In addition to donations, the land conservation group also receives funding from the Freeman Foundation, which gave the trust $3 million last year. The Freeman Foundation was heavily invested in American Insurance Group, which took a hit during the recent economic crisis. Livingston said the Freeman Foundation's support had begun to taper off prior to the economic crisis.

"Over the last four years, the Freeman Foundation has been slowly reducing its funding in the Northeast and investing in the Far East," Livingston said, noting his organization previously received between $4 and $5 million annually. "But Vermont is at the core of their mission, and I expect they will continue to support us, even if that support does diminish."

Like the land trust, the Preservation Trust of Vermont receives support from the Freeman Foundation, which gave the historic building preservation group $600,000 last year. While the Stowe-based foundation has not told the Preservation Trust it will reduce its support, Paul Bruhn, executive director of the Burlington-based organization, said he is anticipating less funding this year.

Bruhn said the Preservation Trust is funded by a patchwork of individuals, foundations, businesses and an endowment. They also hold an annual raffle and silent auction.

The Trust's end-of-year fundraising drive makes up a smaller percentage of its operating budget than other nonprofits in the state. Of its approximately $2.2 million budget, the trust is looking to raise $20,000 during its annual fund request during November and December.

"I'm not sure how this will play out," said Bruhn. "Clearly it will affect nonprofits and we will have to be careful with how we spend our money."

Vermont's nonprofit media outlets also engage in large fundraising efforts during the fall. Vermont Public Television hopes to raise $2.8 million in this fiscal year, which began July 1. Of that amount, they are looking to solicit $800,000 from donors in November and December, said Ann Curran, community relations director for Vermont Public Television.

VPT's projected annual budget for this fiscal year which began July 1 is $6 million, and Curran said the TV station hopes to raise nearly half that amount from donations. VPT also receives support from the state and federal governments, program underwriters, an auction and money generated from leasing real estate.

The organization's biggest single fundraiser will be its on-air pledge drive beginning Thanksgiving weekend and concluding in mid-December, as well as direct mailing appeals to members, Curran said. Fundraising this year will be even more import since VPT has lost about $100,000 in support from state and federal governments, Curran said.

"We've been very cautious about spending because we know we could be feeling the effects of the recession," Curran said. "But, we've had recessions in the past and we're optimistic Vermonters will support us they way they have for 41 years."

If Vermont Public Radio's recent pledge drive is any indication, Vermonters' willingness to give hasn't necessarily been hampered by the recession.

"Our recent pledge drive was a great success beyond our expectations," said Robin Turnau, vice-president for development for VPR.

The fall pledge drive was VPR's most successful ever and drew more than 7,200 donors. But while more people are donating, the average pledge of $82 was lower than the previous average of $90, Turnau said.

Turnau noted, in what she called "a sign of the times," more people became sustaining members than before. Rather than donate $120, they will donate $10 a month for the year, and 1,100 people chose to become sustaining members this year, Turnau said.

Turnau said another sign of the economic downturn is a decline in corporate underwriting. For the first time in a decade, she said, revenue from local businesses declined about 4 percent, from $2.1 million to $2 million.

"Some businesses can't commit to the same size contract. Others don't have the cash flow to underwrite at all," Turnau said.

The Vermont Public Interest Research Group is looking to raise about $200,000 between now and the end of the year, about one-fifth of its annual donations, said executive director Paul Burns. While VPIRG has not seen a drop in support, Burns said the economic downturn is making people reconsider which organizations they support and how much they can give.

"I think individuals are having to make some hard decisions about having to reduce their contributions across the board, while others are having to make choices about who they are giving to," Burns said. "People say they have two different wallets for giving. One might be for political advocacy while the other will be for food shelves and other organizations that help people with food and heat."

Contact Josh O'Gorman at josh.ogorman@rutlandherald.com.

November 15, 2008

Press Room