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JACKI LYDEN, host: Political rhetoric isn't sitting well with investors these days. The turmoil on Wall Street threatens to wreck financial havoc on a lot of people and institutions, including the country's 1.2 million non-profits. Charities of all sizes are only beginning to recover from the recession, now many are wondering how they'll survive another market plunge. NPR's Jim Zarroli reports.

JIM ZARROLI: At Camp Henry on Manhattan's lower east side, a few dozen children are getting ready to rehearse a dance number for a video they plan to make.

UNKNOWN WOMAN: Kayla, come here. Serene, come here. Uh, Shawn.

ZARROLI: The camp is run by the venerable Henry Street Settlement which provides a range of social services for low-income New Yorkers. Executive director, David Garza, says after the 2008 financial crisis, corporate donations to the agency fell off.

DAVID GARZA: It was really a — kind of a vice grip on the supply side and the demand side where there's more demand for our services and less resources to provide the services.

ZARROLI: For a while federal stimulus money helped keep the agency going, but now that's dried up, so Garza has been watching the recent Wall Street meltdown with some trepidation.

GARZA: It starts actually in the stomach, and then it goes through the mind. And it's a here-we-go-again feeling.

ZARROLI: A big drop in stock prices tends to hurt charities in two ways. First, many own stocks directly through their endowments and their holdings lose value, or at least they no longer pay the kinds of dividends they once did. Second, individuals and companies can no longer afford to donate as much as they used to, says nonprofit consultant Bob Evans.

BOB EVANS: We know that this will impose some significant challenges as donors try to fund pledges that they've made or non-profits try to keep attracting the charitable dollars that they do need.

ZARROLI: Evans says after the 2008 financial crisis, donations to all kinds of charities dropped, including those involved in the arts, social services and medicine. Evans says donations finally began to increase again last year, but the downturn in the economy could set them back again.

Elizabeth Egbert, president and CEO of the Staten Island Museum in New York. She says the museum has been writing to donors lately and fewer of them seem willing to make gifts.

ELIZABETH EGBERT: The negative letters seem to be more candid about the limited resources and the many voices asking for support, and so the competition for money is much greater.

ZARROLI: The troubles are aggravated by the fact that the museum gets much of its operating budget from New York City. When there's a downturn on Wall Street city tax revenues tend to fall, and New York has a lot less money to hand out. So the museum has to make do with less.

EGBERT: I can't add staff so we're looking to volunteers more, we're asking more of our board. We're just trying to be better at everything we do.

ZARROLI: That has helped the museum survive and even grow at a very difficult time. But like a lot of non-profits, it faces big challenges right now, and the recent vagaries of the stock market only make the future a lot less certain. Jim Zarroli, NPR News, New York.

(SOUNDBITE OF MUSIC)

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