Nonprofits take hit from recession, too

By: Times-Dispatch Staff | Richmond Times Dispatch
Published: January 25, 2009

The troubled economy has pushed many people close to the edge.

For those who lose their footing, area charities help soften a rocky landing with an array of free programs and services.

But what happens if the lifeline becomes overextended?

At a time when unemployment, foreclosures, food prices and bank collapses are on the rise, will donations to nonprofits dry up?

During recessions, giving has slowed slightly, according to a report by the Giving USA Foundation. Since 1969, total giving in the U.S. has risen every year except 1987, when a tax-law change the previous year prompted some people to give early.

In 2007, charitable giving hit a record $306 billion. Robert L. Thalhimer of the Community Foundation Serving Richmond & Central Virginia sees some hard times ahead for charities.

"Big sponsorships from major companies are getting tougher to find, but the real effect will be felt in 2009," he said during an interview late last year.

This year will be tighter, he said.

"I would expect this to particularly affect arts organizations. Human-service organizations probably are getting smaller grants from corporations that will be prioritized.

"Private foundations are required to give away 5 percent of assets, based on the prior year's asset value," he said.

"So they are still making grants based on values that were much higher than they are today. Foundation support will be diminished in 2009, since it will be based on year-end 2008, and that's looking to be a lot lower."

Nonprofit organizations depending on significant state support or generated revenues may be hit hard, Thalhimer said.

"Individual donors are likely to be the strongest segment of donors," he said. "They have a history of maintaining charitable giving as a priority in recessions."

Already, there are signs that the safety nets for Virginians are straining at the seams.

At the shelter program at Richmond's Salvation Army, the agency has doubled its 30-day limit on stays to 60 days because people can't find jobs.

At the Children's Home Society of Virginia, a statewide child-welfare agency, pregnancy counseling has increased by nearly 50 percent, and financial stress is cited as a major factor.

More women coming to the agency are considering adoption because of economic hardships, said Nadine Marsh, the agency's executive director.

"It's not the sole reason . . . but clients in a fragile set of circumstances find this additional pressure an added burden," she said.

With money tight in many households, Marsh is troubled by those who erroneously believe adoption is unaffordable.

"That's not the case. Adoption agencies like ours only charge based on your ability to pay," she said.

"If they adopt a child from the foster-care system, there are no fees at all."

Contact Robin Farmer at (804) 649-6312 or rfarmer@timesdispatch.com.