Nonprofits strained by decrease in donations, increase in demand

Nonprofits strained by decrease in donations, increase in demand

By Mary Tuma Friday, 13 November 2009

AUSTIN — The poor economic climate has stretched Austin’s charitable organizations, which must cope with increased demand for services with even leaner budgets than usual.

Area nonprofits have experienced a significant increase in demand for services while working with fewer resources, according to a recent survey commissioned by United Way Capital Area and Greenlights for Nonprofit Success, a local organization that assists nonprofits.

In the past year, two-thirds of organizations saw a jump in demand, while more than half reported undergoing a drop in contributions.

“We’ve seen a huge increase in people asking for basic necessities like utilities and medical care and a decline in giving,” said Debbie Bresette, interim president of United Way.

The nonprofit’s 2-1-1 helpline received a 40-percent rise in callers—the vast majority from Austin and many first-timers, she said.

Grocery relief program Angel Food Ministries is also serving more and more new clients.

“We’ve definitely been getting a lot of new customers that really need our service to make their money go further,” said Krista Payne, coordinator of Angel Food Ministries’ branch at Northwest Hills United Methodist Church.

The survey indicated more than 40 percent of those surveyed intend to dedicate more staff to fundraising in the next year, and 33 percent plan to review or reallocate assets. Nearly 20 percent laid off staff, and another 10 percent plan on doing so next year.

“It’s not just a matter of money, but a staffing issue,” said Beth Atherton, executive director of Caritas Austin, which provides food and life skills to impoverished people.

Staff shortages made Caritas unable to accommodate the 300 percent increase in people now eligible for its services.

“We’ve run out of appointments for people [who] need to be assessed,” she said.

The Capital Area Food Bank has experienced tremendous increases in demand during the past year. The organization distributed a record-high 22.2 million pounds of food in 21 counties, a 40 percent jump in distribution from 2008. At the same time, it saw a 60 percent growth in need for services.

“This has been by far and away the largest increase in demand we’ve seen to date,” Food Bank CEO David Davenport said.

The figures even surpass the response to devastation from recent hurricanes.

“We have a disaster of a different kind now,” he said.

While corporate funding dips, Davenport is grateful for the surge in private donors.

“People just recognize that their neighbor may be in the hunger line and understand they should help,” he said.

Long-term projects take hits

In October, the Austin Children’s Shelter opened its new location, a 130-acre campus to house 78 children. After two years of planning and construction, staffing shortages have left the large facility operating at less than half of its capacity.

A 42 percent drop in shelter fundraising in 2009 caused budget cuts and staff layoffs.

“We’ve opened an incredible new facility, but are now struggling to get the funds to expand as quickly as we hoped,” Executive Director Gena VanOsselaer said.

Lighting the way

To help navigate the murky financial waters, a growing number of agencies are soliciting advice from Greenlights, which provides training and services to nonprofits.

“Nonprofits are trying to work more closely together to leverage each other’s resources and share services,” Executive Director Matt Kouri said. “There has also been an uptick in organizations pursuing mergers.”

Austin is home to more nonprofits per capita than any other city in the Southwest, meaning heightened competition for limited funds during economic instability, Kouri said. He encourages groups to focus on efficient management practices.

“People are really craving education to do more with less,” he said.

Keep Austin giving

Studies consistently demonstrate Austinites’ willingness to volunteer their time for charity. However, Austin has fared poorly in philanthropic giving compared to peers, ranking 48th out of 50 U.S. cities in a May 2003 Chronicle of Philanthropy survey.

The results inspired Patsy Woods Martin to found nonprofit I Live Here, I Give Here.

“It was a wake up call for this community,” she said.

The mission of Martin’s organization is to raise awareness of the needs of local nonprofits and encourage a culture of philanthropy—in addition to volunteerism—in Central Texas. Martin said residents are changing their behavior in response to current economic realities.

The shift is highlighted by a report released in October by the University of Texas RGK Center for Philanthropy and Community Service, revealing that 73 percent of Central Texans have become more involved in giving in the last two years.

“There will not be an immediate resolve. It’s going to take time, but I think people are stepping up,” Martin said.