October 29, 2009 | Read Time: 4 minutes
Donations to the 400 American charities that raise the most from private sources grew by 1 percent last year when adjusted for inflation, to $76.2-billion, according to a Chronicle survey. But that figure is expected to drop significantly in 2009.
The country’s biggest and most sophisticated fund-raising operations were not as badly hit by the recession as smaller charities. Giving USA’s annual survey, which tracks gifts to groups of all sizes, found that overall charitable giving dropped by 5.7 percent in 2008.
But the picture for big groups was still grim. For only the third year in the survey’s 19-year history, the minimum amount to qualify for The Chronicle‘s list dropped, to $47.6-million from $51.5-million in 2007, adjusted for inflation.
The recession years of 2001 and 2002 were the only other times in which the cutoff fell since The Chronicle started the survey. It took three years — until 2005 — for the minimum amount needed to make the list climbed above its pre-2001 level again.
Tumbling Fortunes
Not surprisingly, most of the groups that did well in 2008 completed their fiscal years in June. Two-thirds of the groups in the survey ended their fiscal year before September 2008’s financial panic. Many have seen their fortunes tumble since.
The Nature Conservancy (No. 14) raised $758.3-million in 2008, a record for the group. But in fiscal year 2009, over all giving declined by an estimated 26 percent, or nearly $200-million. The environmental group cut its staff by 10 percent in February.
Oral Roberts University (No. 260) raised about $83-million in 2008, thanks to a $70-million donation from a family who wanted to help the Tulsa institution turn its fortunes around after a scandal. But this year, the institution raised less than $5-million.
Just how little a charity could rely on past fund-raising success was driven home by the case of International Aid (No. 296), in Spring Lake, Mich.
The relief group raised nearly $74-million last year, much of it in donations of medical supplies and other products. That was 65 percent more than it brought in the previous year. But the group suspended its operations this summer, the victim of rapid expansion and the particularly dismal economy in Western Michigan, according to its acting chief executive.
For many nonprofit organizations whose fiscal year ended in December, 2008 showed donation declines. Giving to the Foundation for the Carolinas fell by 70 percent, to $78.5-million.
The community foundation (No. 277) was hit particularly hard because of its location in Charlotte, N.C., a banking center that was hit by the global financial crisis in late 2008.
Holly Welch Stubbing, senior vice president of client services and legislative affairs, recalls the moment when she learned that Wachovia would merge with another bank: “It was a very bleak time for us.”
Typically, the organization brings in the majority of its gifts in the last two months of the year, but giving slowed considerably at the end of 2008.
This year, the foundation expects to raise $80-million, slightly more than in 2008.
The Foundation for the Carolinas was hardly alone in its decline.
Declines were found at 138 of the 370 groups for which The Chronicle collected two years of data, with 19 of those seeing private support drop by at least one-third.
One-Time Gains
Over all, groups in the survey raised a median of $105-million in 2008, meaning that half brought in more and half raised less. That number was roughly the same as in 2007.
Some of the losses were offset by one-time gains at other groups.
Donations to the Texas Children’s Hospital, for example, nearly doubled last year to $103-million — in large part due to a $50-million gift from Jan and Dan Duncan, chairman of Enterprise Products, an energy company. The Houston hospital (No. 207) raised $50.3-million in 2009.
And the Los Angeles County Museum of Art (No. 167) raised $126-million last year, an increase of 57 percent over 2007, thanks mainly to the completion of the first phase of a big campaign that brought in, among other large gifts, a $25-million donation from the energy company British Petroleum.
But the tumultuous year ahead was underscored by the scene at a news conference announcing those big gifts. Museum staff members gathered under a sunlit tent with reporters and the philanthropists Eli and Edith Broad and Linda and Stewart Resnick.
That same day — September 29 — the Dow fell by 777 points. What was supposed to be a celebration of the museum’s new building was transformed instead into Blackberry-fueled hysteria, with reporters hounding the philanthropists for their take on the deepest stock-market drop on record.
“I was standing next to people, saying, ‘Let us tell you about the museum,’” recalls Terry Morello, the institution’s vice president of development. “What about the museum?”
Candie Jones contributed to this article.
