Eugene Scott
The Arizona Republic
Feb. 23, 2008 08:21 AM

Non-profits fear shrinking donations

Local non-profit organizations expect individual giving to decrease more than 5 percent this year due to strains on the economy. Corporate giving is expected to shrink as well.

Some charitable groups say they've already experienced a hit in donations from corporations and individuals.

"The last time (about five years ago) there was a downturn, the individual giving went down 3 to 4 percent. The corporation giving leveled," said Patrick McWhortor, Alliance of Arizona Nonprofits president and chief executive officer.

Non-profits leaders said things aren't so bad that they can no longer provide their services, but realize that this trend may not improve soon and in fact could worsen.

Experts say that during economic downturns, organizations often merge or collaborate to stretch their dollars.

"One non-profit that is complementary to another could have some efficiency if they figured out ways to collaborate," said Robert Ashcraft, director of the Arizona State University Center for Nonprofit Leadership and Management.

"I think in some places we will see some just go out of business."

Chrysalis, a Phoenix organization that assists victims of domestic violence, said some corporations it usually depends on have rescinded their plans to give this year, citing the economy.

"Corporations and businesses represent about 61 percent of revenue. We're talking about a huge piece of the pie," said Lorie Simms, Chrysalis spokesowman.

The difficult part about companies cutting back when the economy toughens is that that the need for social services increases when times are hard.

"What concerns us is that when it trickles down for us, it's going to increase the stress in families, which increases the abuse, which increases the need for service," said Patricia Klahr, Chrysalis president and CEO.

Leaders at Florence Crittenton Services of Arizona, a Phoenix organization that assists girls and women, said they've also noticed some donors hesitating to continue financially supporting the organization.

"We are seeing a change in how corporations are looking at funding - specifically banks. I don't know if that's so much having to do with what's happening with real estate or if it's just a sign of the time," said Margaret Stephens-Reed, director of development for the organization.

The number of corporations and people giving hasn't decreased at some other organizations, but the amount they give has.

"People are giving smaller amounts than in the past and some have opted for in-kind gifts instead, donating items instead of money," said Irene Agustin, communication and marketing manager for Crisis Nursery, a Phoenix organization that helps children.

Some don't necessarily believe fewer companies and individuals are giving, just that they are giving elsewhere.

"Giving overall is really competitive in Arizona . A lot of giving is being directed to universities and art museums, the arts," Agustin said. "A lot of those organizations are seeing record breaking fundraising where as a lot of the social service entities are kind of suffering this year."

Some are focused on building new relationships with potential donors.

"There's a lot of wealth. A lot of caring, concerned individuals," Simms said. This is "an opportunity for individuals to know that their support can make a difference."

McWhorter said the non-profit community won't have a full understanding on how much giving has changed until year's end, but it is hoping things turn around before then.