Sharing the Pain

Bruised by the deepest recession in decades, the nation’s largest charities anticipate that giving will decline this year by a median of 9 percent. That would mean that half of the nation’s most successful fund-raising groups expect an even steeper drop — one that signals continued pain for charities and the people who rely on them.

The fund-raising outlook for 2010 is not much better. Nonprofit officials say they are hopeful that the stock market’s climb will prompt donors to give more, but they fear that foundations and corporations might cut back further. For the most part, they are setting their budgets conservatively, often hoping to raise just 1 or 2 percent more than they did in 2009.

In response, the push to be more aggressive in seeking donations continues. The biggest charities are stepping up their efforts to solicit individuals, trying to explain more clearly why they need money, focusing on donors who have stopped giving, experimenting with new methods of online fund raising, and putting more time and effort into securing planned gifts.

Charities are also reorganizing their fund-raising departments, sometimes because they have been forced to lay off employees. They are encouraging fund raisers to share responsibilities and work more closely with people in different departments.

Brian Lee, vice president of university advancement at Tufts University (No. 93), describes last fall’s stock-market plunge as an “Apollo 13″ experience. In November, gifts to the annual fund were nearly 20 percent below expectations.

“We had to on the spot recalibrate and recalculate,” he says.

The university, which was in the midst of a $1.2-billion campaign, shifted its focus from raising money for endowment and buildings to student scholarships, starting a program called Students First. The results have been positive: The university raised nearly $40-million in support this year for student scholarships, $11-million more than in 2008. Gifts to the annual fund increased by 6 percent.

The Metropolitan Museum of Art (No. 190) has also retooled its message to fit the Great Recession. Fund raisers at the New York institution, which received $115-million last year compared with $128-million in 2007, have been spending twice as much time as they usually do raising money to keep the museum running and less time on capital gifts and the endowment.

“The operating gifts are what we need right now,” says Nina Diefenbach, vice president for development and membership.

Running Lean

Charities on the Philanthropy 400 that are trying to raise as much as they did in the past year are oftentimes doing so while spending less money and relying on fewer staff members.

Of 186 groups in The Chronicle‘s survey that said they had made cuts in response to the recession, 84 said they had laid off fund raisers. Nearly 100 had frozen hiring of fund raisers, and 111 had eliminated pay raises.

Some groups are reorganizing and consolidating. They say the recession may be spurring them to do that sort of streamlining, but that the steps they are taking will help them even when the economy recovers.

Planned Parenthood Federation of America (No. 307), which cut some fund-raising positions in January, is encouraging employees who work with wealthy people, foundations, and direct mail to share ideas and communications they prepare.

World Vision (No. 11), the international aid group, merged its communications, advocacy, and fund-raising departments under one leader this summer as a way to cut costs and improve effectiveness. The organization also combined all the people who work on Internet strategy, be it on producing content, marketing, or technology.

Some national nonprofit groups are also working more closely with their local chapters to raise money. Volunteers of America (No. 221) recently held a fund-raising conference to train people who work for its local organizations. Boys & Girls Clubs of America (No. 17) is helping its chapters raise bigger gifts from individuals.

‘Do We Invest in Growth?’

While most big groups say they have no immediate plans to fill vacant fund-raising jobs, a few organizations are contemplating expanding their development departments to take advantage of the economic recovery.

Officials at National Public Radio (No. 302) say they are seeing more interest from foundations now, many of which are concerned about the demise of newspapers and other news outlets. The Washington nonprofit group is developing plans to hire more fund raisers.

The Rotary Foundation, of Rotary International (No. 133), has hired four regional fund raisers to focus on raising money from wealthy individuals.

The Foundation for the Carolinas (No. 277), which suffered a 70-percent drop in giving in 2008 as its donors in Charlotte were hit hard by the banking-industry chaos, is now debating whether it might add back some of the 15 percent of staff jobs it eliminated this year.

“We’re trying to figure out how conservative we want to be,” says Holly Welch Stubbing, senior vice president of client services and legislative affairs, who says donors are slightly more comfortable giving now than a year ago. “Do we invest in growth, or do we hang back and see?”

While some fund raisers temporarily stepped back from asking for big gifts when the economy crumbled, many say their approach has been to be more assertive. They are trying to avoid sounding desperate for cash, while reminding donors that the recession has made their work even more important.

Chapters of the Salvation Army (No. 2), for example, are noting the surge in people asking for assistance. The group’s Golden State Division, in California, recently sent out an appeal featuring the story of a former donor who had turned to the charity for help after losing his job and home.

Jeffrey Korbman, campaign director at United Jewish Communities of MetroWest (No. 276), in Whippany, N.J., says that, for much of this year, calling up supporters felt a little like “being a deli man in a town full of vegetarians.”

But he kept making those calls, and secured matching dollars from loyal donors that would provide incentives for others to give.

“You have to be understanding, obviously,” agrees Ronald Vanden Dorpel, senior vice president of university advancement at Brown University (No. 112). “But I just don’t think you can have a diminution in effort.”

Giving from individuals remains a much rosier prospect than foundation giving, because foundations use a rolling three-year average to calculate their grant-making budgets. Thus the decline in foundation endowments in 2008 will only start to really hit grants next year.

Perhaps because online fund raising and social media often cost relatively little, more charities are trying to find new ways to bring in big dollars online. The Salvation Army plans to unveil several campaigns with corporations this fall that will be based on social networks such as Facebook and Twitter.

World Vision started a Web site that takes the one-on-one connection it creates with donors who agree to support a child overseas and applies it to microfinance programs.

The aid group will unveil shortly a Web site, developed with help from Opportunity International, which also worked with the nonprofit group Kiva, that enables its donors to give more directly to small-business owners that benefit from World Vision’s poverty-fighting programs.

The aid group has raised $10,000 already, even before announcing the program.

Such bright spots are giving fund raisers at the country’s largest charities hope that the worst of the recession is over.

Mr. Korbman of United Jewish Communities of MetroWest jokes that at this time last year, he would shut his office door and cry when he opened mail, because every letter came back with a donation smaller than it had been in the past.

But he says he’s not seeing those declines anymore. “I’ve put away the box of tissues,” he says.

Candie Jones and Nicole Wallace contributed to this story.

HOW MUCH CHARITIES IN THE PHILANTHROPY 400 RAISED, 1990-2008 In billions 1990 $28.0 1995 $33.2 2000 $54.0 2005* $69.0 2008* $76.2 NOTE: Figures are in 2008 dollars, adjusted for inflation. * Figures include all United Way affiliates. In previous years, United Ways were ranked by individual city.