Thu March 5, 2009
Recession Deals Nonprofits A Double Blow
Kansas City, MO – At noon on a chilly February day the free lunch line outside the Grace and Holy Trinity cathedral downtown stretches the length of the parking lot and curves to span its width. Some in the line are the chronically unemployed, but these days more and more are people laid off due to the recession and looking for work.
A man volunteers to tell his story. His name is O'Connell, he says. Laid off from a warehouse he hasn't been able to find a job. Things are getting dire.
"I owe three years on a 20-year mortgage on my house. I foresee the bank's gonna foreclose on me... My wife's in the house right now, and I've been out looking for work."
"Life goes on," he adds.
Another man, who volunteers only his first name: "Steve." says he was doing automobile clean-up and detailing, but in the current economy, there are no openings. "They really don't want to talk to you," he says. "I mean they'll tell you, 'You can fill out an application, but, you know, we're not hiring... or won't be.'"
Times have changed for O'Connell and Steve. And they have changed at the free lunch program. Kitchen manager Dana Hull says she is seeing many new faces in the lunch line. Lunch crowds have increased about 30% from last year.
Every one of 38 food programs show increases in demand - from 12 percent 30 percent - according to Susan Engel at Catholic Charities. She says assistance programs in general are seeing many new clients and that an increasing number of them are from the middle class.
Non-profit health clinics are experiencing heavier caseloads. At the Duschesne Clinic in Kansas City, Kansas the surge in new patients started in November. Executive director Amy Falk in years past, 9 out of ten could afford to pay something toward their health care. Now less than half can. Falk worries that the clinic will have to stop seeing new patients, and that is not an option she is fond of.
The crisis has already arrived at some charities. For example at Newhouse, a shelter for victims of domestic violence. Susan Whitmore says it hit there before summer was over, partly because of a nearly 30 percent increase in demand. Not surprisingly, domestic violence rates increase during times of economic stress.
Combined with that, Newhouse experienced a sharp decrease in individual and faith based donations and corporate donations.
"We pretty much had a financial crisis in August," Whitmore admits, "and only came out of that after we received some significant donations that sort-of responded to our needs."
The larger and better known nonprofits and food programs have had the fewest problems. United Way made its fundraising goal. So didCatholic Charities, but state budget cuts could chip into that 15 percent of its funding. The organizations having the most problems are those lesser-known ones that serve a narrow niche and depend heavily on grants.
Doug Morgan of Friendship House, a residence for recovering female substance abusers and their children, says his facility has had word from a number of local foundations that they have to curtail donations because their investment portfolios have been adversely affected by the stock market downturn
I relates one example where we a foundation first asked Friendship House to revise its grant proposal downward. The organization complied, but were later told the grant was denied because the foundation was so hard hit that it had nothing to give.
Morgan tells a story like the one we heard from most of the charities. When any of their missions were threatened, new donors were found to meet the need. Many of those "angels" were smaller companies and ordinary individuals. Many of the contributions that made the difference were small ones.
Rosanne Pruitt of Catholic Charities says that is something that Catholic Charities has a lot of gratitude for. "Whatever we have to offer to help another is accepted with immense gratitude. I know that I speak on behalf of all the non-profits who help the vulnerable in our city"
The need for help is likely to continue. State budget cuts will reduce that portion of the agencies' funding. And the foundation grant situation is likely to get worse before it gets better. That's because many foundations base their giving on three-year earnings averages... which means the cuts in grants already experienced were based on averages that still included two good years.