Donations are up, but so is the need: Nonprofits struggle with increasing demands
Charities and other nonprofits will need every resource in their philanthropic toolboxes to help them cope with a tough economic situation and a growing need for their services.
As conditions worsen for many of their clients, the organizations have had to boost their efficiency and become more goal-oriented as they respond to challenges, local experts say. That typically has meant beefing up their fund-raising activities and improving top-level management with training.
At the same time, short- and long-term donations from a well-regarded donor community are softening the economic effects on these organizations and their clients. But even with the help, there is no question that nonprofits still have their hands full.
Unemployment has been hovering around eight percent in northwest Lower Michigan, and foreclosures and fuel costs are putting more pressure on households. More and more people need help for such basics as food and utility expenses.
For example, the number of people tapping the Father Fred Foundation food pantry is up 24 percent over last year.
Human service and health needs were already at high levels at the organization in 2007, when 1,237 families who had never sought help from the organization asked for aid.
"We are giving out $2,000 in food every day," said Martie Manty, its executive director. "Even double income families have been affected by the economy."
Some nonprofits have turned to North Sky Nonprofit Network, a consulting firm, for help in mobilizing their resources. Their staffs are trained on how to improve their management performance, increase their fund raising and bolster their corps of volunteers.
Since January, the NorthSky Network has put on a series of seminars focusing on these issues, said Debra McKeon, its executive director.
"As the demand for nonprofit services increases – in many cases exponentially – due to the economy today, the organizations are looking at many different ways to meet that demand," she said. "What our organization does is really connect the nonprofits to the resources that are available."
Volunteers are chief among those resources. Better recruitment and management of volunteers increases the reach of the organizations with relatively few full-time employees.
Fund raising is at least as important.
"Some of the nonprofits may have been doing more informal or episodic fund-raising and now they are looking at something more systematic," McKeon said. "And the non-profits that were already engaged in systematized fund-raising are looking for ways to increase the return on their investment and to engage donors to help more."
NorthSky often promotes systems that nonprofits can use. For example, if a nonprofit puts on a special event, the organization might recommend capturing the names of the people attending and putting them on a newsletter list.
"You can set up a system that, first and foremost, those people get invitations to any other events," she said. "People who have already been touched by an organization are the most inclined to want to continue helping or increase their help."
The 15-year-old Grand Traverse Regional Community Foundation isn't exactly a new response to the growing needs today. But its approach seems especially suited to an era of cash-strapped state and local governments.
The foundation primarily builds endowments that generate grant funding to meet current needs. The initial money comes from donations, and grants come from the investment income that the funds earn.
Like a mutual fund, the endowments usually earn income in both good and bad times. Although returns can vary, they still provide a fairly steady funding source for agencies and programs. The endowment principal typically isn't touched, so it keeps generating income for years into the future.
Gift by gift, the foundation's assets have risen to $35 million, "and I expect it to be substantially more by the end of the year," said Jeanne Snow, executive director.
It received $7.7 million in gifts in 2007 alone, Snow said. The proceeds from all its endowments yield considerable sums for grant-making.
"We gave out $2.7 million last year, with 600 grants," she said.
At present, there are 160 funds supporting various agencies in the region, she said. Some of those funds are set up by families.
"These family funds are very oriented toward human services," she said. "They did a lot last year to provide energy assistance for the elderly.
"More families are setting up funds with us to do their charitable giving," Snow said, noting that the foundation has a strong investment record. "That stretches their philanthropic dollar."
In the current economic conditions, the nonprofits will no doubt appreciate that. BN