Amid Recession, Nonprofits Feel The Pain

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Americans gave $300 billion to charity last year. While it's a big number, it's less than Americans gave the year before. Charitable contributions are expected to be down for the next few years.

MELISSA BLOCK, host:

Three hundred seven billion dollars, that's how much Americans gave to charity last year. This year's number is expected to be smaller, and 2010 isn't looking so great for non-profits, either.

From Seattle, NPR's Wendy Kaufman reports.

WENDY KAUFMAN: The downtown YWCA is a safe haven for women and their children. They can make meals, sit at a comfy kitchen table and talk about regular stuff, like Halloween costumes.

(Soundbite of YWCA)

KAUFMAN: Scary isn't the word the YWCA's chief executive uses to describe her budget crunch. But Sue Sherbrooke comes close to it.

Ms. SUE SHERBROOKE (Chief Executive, YWCA): Concerned about how we're going to end the year. We have $633,000 to raise. And there are women and families in our two counties who are really depending on us to do it, and we're worried.

KAUFMAN: And the YWCA isn't alone. Overall, charitable giving fell roughly six percent last year after adjusting for inflation. That's the steepest drop in decades. And this year, giving will likely be down again. So far there have been just two marquee gifts of $100 million or more. Last year there were 20.

Donations by the rest of us are also down. Some people who used to give at the office no longer have jobs. Others, like Carol Pankey(ph), saw their retirement funds take a hit and they scaled back.

Ms. CAROL PANKEY: I have regularly charities I support. I always try to add something new every year and last year I just didn't.

KAUFMAN: In fact, Pankey actually cut the number of charities she supported and gave her money only to those who had earned her loyalty and trust. That response has been fairly typical, suggests Stacy Palmer, editor of The Chronicle of Philanthropy. She says now more than ever, organizations have to court their contributors and show them how the money will be spent.

Ms. STACY PALMER (Editor, The Chronicle of Philanthropy): One of the things charities are trying to do is make it more concrete. They might say, if you spend $25, you can buy five minutes, 10 minutes, a half hour of a scientist's time instead of just saying it'd be nice to cure cancer.

KAUFMAN: Or feed the hungry or provide job training. Donors also want to see tangible results from the groups they're supporting. Increasingly, charitable organizations are using tools such as Facebook and Twitter to convey their messages and solicit funds. But most requests for money are still done the old-fashioned way. Asking for money has never been easy. And right now many charities are nervous about offending people by making a request.

Ms. LEANNE MOSS (Executive Director, Women's Funding Alliance): There's a lot of fear out there. There has been for a year.

KAUFMAN: But LeAnne Moss, executive director of the Women's Funding Alliance, knows the only way she could meet the needs of women and girls was to ask for money, sometimes boldly.

Ms. MOSS: It's about being focused on that mission. And I've been in situations in the past where, yes, I have made too large of an ask and had to do a little repair. But in the end, people have respected me and us more for doing that.

KAUFMAN: Looking ahead to an improving economy, experts believe that individual donations will pick up first, foundation dollars will follow. Overall, says Stacy Palmer of The Chronicle of Philanthropy, the outlook isn't very pretty.

Ms. PALMER: It's going to be very, very hard for groups to be able to raise money. They'll be in a squeeze. So I think it's going to be quite a long time until most non-profit groups can come out of this.

KAUFMAN: How long will it take? History suggests two or three years before charitable giving returns to pre-recession levels.

Wendy Kaufman, NPR News, Seattle.

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