Hard times at nonprofits
Groups from child care to disease research struggle as donations drop
Greg Dohler/The Gazette
As the holiday season approaches, Maryland nonprofits remain thankful for whatever support they can find in an environment of rapidly falling contributions, rising expenses and swelling numbers among the needy.
With annual budgets averaging $1 million to $2 million — though with most Prince George's organizations at less than $25,000 — nonprofits may experience at least a 30 percent revenue reduction from charitable sources, said Glen O'Gilvie, CEO of the Center for Nonprofit Advancement. The center supports more than 13,000 nonprofits in the Washington region.
The government buyout of the financially ailing Fannie Mae and Freddie Mac could mean a tremendous loss for area nonprofits, as the two mortgage companies together contributed more than $45 million to nonprofits in 2007.
The Prince George's Child Resource Center in Largo, which provides family support services to more than 7,000 families, and training to more than 4,500 child-care providers, still does not know whether it will receive its $100,000 annual grant from the mortgage companies, said executive director Marti Worshtil. This represents one-sixth of the center's budget and goes toward the Healthy Families Prince George's program for young first-time mothers.
Prince George's County Council members have signed a resolution urging Fannie Mae and Freddie Mac to maintain their funding to the county.
"The resource center is holding our breath," Worshtil said. "Our program officer has no idea what's going to happen."
She said the seasonal donations of Thanksgiving dinner gift baskets, usually around two dozen by now, are also down.
Although levels of financial impact vary depending on a nonprofit's diversity of revenue sources, almost all organizations are preparing to tighten their belts as they head into one of the most demanding times of the year for services.
The U.S. Humane Society in Gaithersburg appears to be holding up well because it relies on numerous small donations instead of large lump sums, said CFO Thomas Waite. Supplied by countless $16 contributions, he said, the nonprofit has an annual budget of $130 million.
Waite said that despite the society's present stability, it is still taking precautions through hiring freezes, plans to cut its 2009 budget by 10 percent and additional contingency plans.
a worst-case scenario'
C. Richard Mattingly, executive vice president and COO of the national Cystic Fibrosis Foundation in Bethesda, said his organization is especially concerned about its fundraising events, which have drawn fewer donors and cost more because of inflation. The foundation gives 700 grants annually to clinical research, training, care centers and basic research related to the lung and digestive disease, plus 20 annual contracts to for-profit organizations focused on drug development and discovery.
About $150 million of the foundation's $250 million budget comes from public contributions.
"Corporate America has begun to show that it's no longer in the position to give as philanthropically as it has in the past," Mattingly said.
For some nonprofits, reduced funding from the public is not the only problem, as all levels of government face their own deficits and continue to slash programs to make ends meet. Maryland has already announced $300 million in cuts across the board.
Lorene Lake, executive director of Chrysalis House in Crownsville, said any reduction in state money will hurt her organization, which provides drug addiction treatment to mothers, including inmates.
"We can't cut our staff and deliver the services these women need," she said, adding that increased heating, transportation and electrical costs have been devastating the nonprofit's $2.4 million budget. "What I'm most scared of is next year. We're planning for a worst-case scenario."
Rising expenses, especially those in the areas of food, are constantly on the mind of Jean Guiffre, founder and executive director of Top Banana Home Delivered Groceries in Brandywine, which receives 52 percent of its $500,000 budget from the delivery fees and prices paid by recipients — seniors and people with disabilities.
"We're seeing some of our clients on low incomes cutting back on quantities of groceries," she said, adding that Top Banana has started lowering its prices to ensure everyone gets the food they need. "At the same time, we're growing substantially, so we need more staff and more funding."
Guiffre said Top Banana is fortunate to at least have its service charges from recipients to provide funding.
"I don't know what the nonprofits who are reliant on the government are going to do," she said.
Maryland's decision to lower the promised cost-of-living increase for service providers to the developmentally disabled is also taking a toll on organizations such as The Arc of Prince George's, which serves 2,000 people annually on a budget of $21 million. About 90 percent of its budget comes from government grants, said executive director Mac Ramsey.
Scott Birdsong and his Guide Program in Laurel for people with mental health disabilities said the state also chopped funding for residential child care services. The Guide Program has already closed down a $185,000 juvenile justice program in Montgomery County and may be consolidating more programs to balance its $7 million budget.
Ramsey said it is a particularly tough situation for The Arc, because it struggles to hold onto its current service population while trying to make room for the 18,000 people on its waiting list.
"Just because we're in a recession doesn't mean the need goes down," Ramsey said. "In fact, it's more in the opposite direction."
Saleem Gauhar of Manna House in Baltimore could speak to this need, saying his breakfast house has gone from serving 150 people daily at this time last year to 200.
He said that while he anticipates some funding obstacles in the future, "If you're doing the right thing for the right reason, the money will come."
At Shepherd's Table in Silver Spring, there was a packed house for an event last month that featured the 1 millionth meal served by the nonprofit provider of meals for the homeless. It was, unfortunately, a common sight in recent months, said Jacki Coyle, Shepherd's Table executive director. She said the roughly 150 people served at the celebration is the average for the past few months as many families are hitting particularly hard times.
Shepherd's Table has seen an increase of 25 percent in meals served over the summer, which is typically a slower time of the year, and now has about 900 volunteers a year, Coyle said. In 2007, an average 116 meals were served each night, according to Shepherd's Table's 25th anniversary booklet.
"In this bad economy we need the contributions to increase," she said. "As those of us with sufficient finances see things tighten, we hope people don't stop giving to Shepherd's Table."
Tips for nonprofits
-Take a real look at expenses and reduce wherever it's possible to do so without cutting services, focusing on equipment and vacant positions.
-Form partnerships and share expenses such as accounting and fundraising.
-Consider sharing building space if organizations are close to one another.
-Consider consolidating programs and even organizations if it becomes necessary and where it makes sense.
-Diversify revenue streams if possible.
Source: Center for Nonprofit Advancement, Washington, D.C.
Staff Writer Jason Tomassini contributed to this report.