Signs of Optimism Seen as Non-Profit Groups Eye 2004
By DARRELL SATZMAN
Staff Reporter
In the midst of the most critical giving period of the year, many local non-profits say they will be hard-pressed to meet their goals for 2003, although an improving economy and a more buoyant stock market are raising expectations for an increase in donations next year.
“November to November, people are definitely feeling better,” said Stacy Palmer, editor of the Chronicle of Philanthropy. “What we are seeing now is economic growth is slowly making a difference.”
Still, there is always a lag time before charities start to share the benefits of an improving economic picture, and that means 2003 continues to be a struggle.
“Despite our best efforts to show a gain, the economy hasn’t cooperated,” said Judith Lewis, president and chief executive of Make a Wish of Greater Los Angeles, which through November of this year had raised a little more than $2.5 million, about flat from 2002. “We thought 5 percent would be a reasonable increase. It had been in years past.”
According to GuideStar, a clearinghouse for information on non-profits, fundraising in California has lagged other parts of the country.
Through the first nine months of 2003, 44 percent of California charities surveyed reported receiving fewer donations than for the like period last year, while 35 percent said their donations had increased. That compares unfavorably to the national results, in which 35 percent said donations were down and 39 percent reported that they had gone up. (The GuideStar survey polled 660 non-profit organizations nationwide, including 75 in California.)
H.T. Linke, a spokesman for the Red Cross of Greater Los Angeles, said that donations were off roughly 30 percent at the agency during the first five months of the fiscal year ending June 30, 2004, compared with a year earlier. Like many charities, the Red Cross relies on a mix of government and foundation grants and individual and corporate giving to fill out its annual $15 million budget.
With government grants and corporate giving both declining in recent years, individual donations have become increasingly important.
“At one time you had large Fortune 500 companies here and they had generous giving programs, but that’s not the case anymore,” Linke said. “The bulk of our donations come from individuals.”
Mixed results
“It’s been a rough period,” said James Ferris, director of the Center for Philanthropy and Public Policy at USC. “The economy is coming back but changes don’t happen overnight. There is still a lot of uncertainty, and when there is uncertainty people hold back.”
Palmer agreed that the outlook for 2004 was promising, but she said most organizations are focused on this month, by far the biggest giving period of the year. “Six months ago everybody you talked to was gloom and doom, but now you see more optimism,” Palmer said. “The question is will we see that optimism reflected in year-end giving.”
The slow economy does not only have an impact on donations. Until the rebound earlier this year, organizations that rely on endowments had seen their portfolios squeezed by diminishing stock values.
One such group is the Amateur Athletic Foundation of Los Angeles, which was established after the 1984 Olympics and operates with what is now a $130 million endowment. The organization must give away an average of 5 percent of the principal each year.
“The long-range goal is to get an 8 percent return,” said Patrick Escobar, vice president of grants and programs for the foundation. “In the last couple of years there hasn’t been a return and that’s definitely impacted our giving.”
Catholic Charities and the United Way of Greater Los Angeles, two of the biggest local charities, reported that donations would either remain flat or increase marginally in 2003.
The United Way expects to raise $70 million in 2003, compared with $68 million last year, according to Joe Haggerty, president of the local chapter.
“Most of the giving now is done by employees at work and what we are seeing is that it is up slightly over last year,” he said. “The strongest area has been financial banking, credit and mortgage companies. Grocery, hotels and commercial aircraft, or anything having to do with travel, has been down.”
Monsignor Gregory Cox, executive director of Catholic Charities of Los Angeles, the social services arm of the Diocese of Los Angeles, said the agency anticipates a small bump in donations this year. He also noted that there has been little impact by the sexual abuse scandal that has roiled the Church.
“I’m sure there are people who no longer fund us, but people realize we provide services to the poor,” he said. “The demand is still greater than the supply.”
One institution having its best fundraising year ever in 2003 is Childrens Hospital Los Angeles, thanks in large part to entertainment mogul Haim Saban’s $100 million gift that went primarily to the hospital.
Childrens Hospital launched its Living Proof campaign in April, with the goal of raising $500 million by 2008. So far, the hospital has raised $340 million.
“The Saban gift energized everybody and our longtime friends came forward,” said Claudia Looney, senior vice president of Childrens Hospital. “But it hasn’t been easy. It’s not like people are just throwing money at us.”
