August 19, 2012 | Read Time: 8 minutes
Providence, R.I.
For 125 years, Federal Hill House Association played a key role in the lives of local immigrants striving to become Americans.
In a neighborhood where Italian families crammed into sagging wood-frame triple-decker houses, the charity helped them land jobs and learn English and whisked their children to Boston Red Sox games.
Last year the nonprofit signed a lease to transform a vacant former Catholic parochial school into an education center. The nonprofit now finds that it’s struggling along with its clientele of mostly Latino and African immigrants. Foreclosures and unemployment gutted Rhode Island’s capital, leaving many Federal Hill houses boarded up.
The group’s signature fundraising events—a charity walk and a restaurant festival—pulled in a fraction of the donations collected in years past. Federal Hill House just decided to scuttle a planned $1.8-million capital campaign to renovate the school building after interviews with donors showed that giving would be sluggish.
Such fundraising challenges have long faced many nonprofits in the city.
Federal tax data analyzed by The Chronicle of Philanthropy showed that taxpayers in the Providence metropolitan area gave less to charity in 2008 than residents of any of the other 50 largest metropolitan areas. A similar Chronicle study using 1997 data yielded comparable results.
‘It’s Shameful’
Each year, that has meant limited money and greater challenges for homeless shelters, Catholic schools, food banks, hospital programs, after-school classes, job-retraining sessions, and small theater groups, some of which have been forced to close their doors.
The situation is deeply frustrating for committed donors.
“It’s shameful,” says John Tarantino, a city trial lawyer who grew up in Federal Hill and whose family benefited from the charity. “I know there are people here who do extremely well, and to rank dead last is a black eye.”
Few Big Companies
While it may be surprising to see so little giving in a city that is home to an Ivy League institution (Brown University) and known as a summer haven for the Vanderbilts and Astors, with Gilded Age mansions and sailboat races, nonprofit leaders say fundraising is tough because few big companies operate in the state.
What’s more, state and local governments have been so strapped for money they are imposing taxes and adopting other fiscal policies that leave the middle- and upper-income residents with less disposable income.
Fundraisers here say it takes extraordinary effort to meet each year’s budget goal.
“You have to turn over every seat cushion. You can’t take for granted that one kind of fundraising is going to do it for you,” says Anne Nolan, president of Crossroads Rhode Island, a charity that provides housing services. “You have to do direct mail and phenomenal special events. You have to cultivate major donors and you have to look for people you haven’t found. And you have to repeat it over and over.”
Ms. Nolan and other nonprofit veterans wonder if the problem with fundraising in Providence runs deeper than mere economics and finance, saying the reluctance to part with money dates back to the culture of Yankee frugality.
“There is a New England hangover with that,” she says. “Part of it is privacy—’you mind your business and I’ll mind mine.’” It’s also a strong sense of independence, she says, that dampens giving. Local residents don’t feel “the sense of obligation to the community you live in.”
No More Glory Days
Nonetheless, the economy is clearly the biggest obstacle to improving giving.
Providence never fully recovered from the end of its glory days when it was a hive of industry.
After textile and jewelry businesses that fueled the region closed, Rhode Island charities could count on businesses like Fleet Bank, Citizens Bank, and locally owned gas and insurance companies.
In the last decade, though, financial giants, such as Bank of America and Royal Bank of Scotland Group swallowed the local entities. The drugstore chain Eckerd Corporation, headquartered in nearby Warwick, was split and sold off to rivals.
Charity executives say that if they approach a corporate entity for a donation, the request is shuttled to some distant headquarters where nobody knows the difference between Federal Hill and Fox Point (a bustling neighborhood that borders the Brown campus).
Fleet Bank supported education and social-service programs of the Roman Catholic Diocese of Providence. It’s now Bank of America, a national entity that “has to spread its charitable dollars amid a much larger area,” says Anthony Gwiazdowski, the diocese’s chief development officer. “You’re not necessarily dealing with people who know the blood and guts of what the state is about.”
The steady stream of mergers and closings strangled hiring. Rhode Island’s unemployment rate persists at 11 percent, just 0.9 percent less than the high in early 2010 and nearly three points above the national numbers this May. The metropolitan area—which includes Providence, nearby Warwick, and Fall River, Mass.—has limped along for some time.
The recession prompted the City of Central Falls to declare bankruptcy, and Providence Mayor Angel Taveras has said the capital is “on the brink” of filing. A year after the state overhauled its pension system and suspended cost-of-living increases for government retirees, the city of Providence is seeking contract concessions from its workers.
Leonard Lardaro, an economics professor at the University of Rhode Island, describes the situation as “carnage” that will hurt wage earning, and therefore charity fundraising, for years to come.
High Cost of Living
Many other regions of the country are distressed economically, but charities in Providence suffer from a New England phenomenon: Middle-income earners give less than their peers elsewhere.
Paul Schervish, who directs the Center on Wealth and Philanthropy at Boston College, says the center found in a 2007 study that middle and low-income people in New England give less than other Americans because they are squeezed by high living costs, including taxes and private-school tuition. The center is conducting a similar study for the Rhode Island Foundation, due out later this year.
Such costs make it imperative that charities become more savvy about how they make their case for giving and demonstrate what problems they are seeking to solve, says Neil Steinberg, president of the Rhode Island Foundation, the state’s wealthiest grant maker.
The foundation has made progress on that front, and that’s a key reason its grants to local charities grew from $14-million in 1998 to $28-million in 2011.
He says that with so few large donors to woo, local charities must “educate and inspire the donor base,” says Mr. Steinberg. “You do it like you would educate and inspire about new products. Educating people on the needs—that it’s not just the heartstrings.”
With fewer businesses to solicit, the United Way of Rhode Island has organized groups of people with mutual interests. For example, one for women has been raising money for education and collecting books, bringing in $70,000 in new gifts.
Today’s donors “are not like my generation,” says Anthony Maione, United Way’s president. “They want to be hands on. They don’t just want to mail it in.”
Low Visibility
Finding ways to reach a new generation of donors is easier said than done for Nina Pande, the executive director of Federal Hill House. Most upper- and middle-class Rhode Islanders have had no contact with Federal Hill House, with its emphasis on serving the poor and immigrants.
The charity has lost some government contracts and grant money in recent years and has had to cut its staff.
Then its two signature events—an annual walkathon and a food fair—raised far less than in previous years. The Taste of the Hill, featuring the food of Federal Hill’s mostly Italian restaurants, raised just $18,000 after expenses, less than half of what it earned before the recession.
“While our organization is 125 years old, the visibility is low,” she says. “We need to ramp up our PR and marketing.”
Meanwhile, the charity is focusing on helping itself by helping people who need work.
The former parochial school, pocked by graffiti, now houses a tiny nonprofit that repairs and salvages metals from old computers. She walks past rows of ancient Compaq and Dell terminals. A volunteer tosses a rescued motherboard into a plastic bin and says she’s been sending out letters to law firms seeking their old electronics.
Ms. Pande hopes to turn the enterprise into a small business that will one day bring in revenue. She’s also considering offering herself as a consultant to other nonprofits.
“We will get there,” she says. “It’s just going to take us longer than anticipated.”
Emily Gipple contributed to this article.
Fundraising Lessons: Providence
• Show the problems facing the city and how giving can solve them. Neil Steinberg, president of the Rhode Island Foundation, says the best way to spur more giving is to “educate and inspire the donor base.” Appealing to emotions is not enough, he says.
• Pay personal visits to the wealthy. Because New England’s middle-class earners face high living costs and are squeezed in other ways, they are not as generous as people in other regions. Says Anthony Gwiazdowski, chief development officer of the Roman Catholic Diocese of Providence: “When you don’t have as many people making $25 and $50 gifts, you have to identify people at the other end of the spectrum.”
• Unite like-minded donors to solve challenges. Rhode Island’s United Way organized groups of women to collect books and raise money for educational causes. It has also pulled together young leaders who attend special events, as a way to develop a culture of giving.
