Year-End Donations Show Healthy Increases at Many Charities

By Holly Hall and Elizabeth Schwinn

As the end of the year approaches — and donors rush to make their contributions before the 2006 tax year ends — many charities say fund raising is booming.

The strong economy and soaring stock market have lifted results at many groups. But some are struggling to raise as much as they did last year and many social-service organizations say demand for aid is rising so fast they are not able to meet the needs.

For many of the nearly three dozen charities interviewed in a Chronicle spot check, contributions in the final quarter of the year have already surpassed fund-raising totals in the last quarter of 2005 — sometimes by substantial margins.

For example, Shriners Hospital for Children, in Tampa, Fla., says donations from October through mid-December are 10 to 20 percent higher than the amount raised in the same period last year.

Most of the increase has been in gifts made via the organization's Web site, where the hospital chain now offers donors choices about which programs and services their gift will support, says Edgar R. McGonigal, Shriners' chief fund raiser.

Among the other groups with big gains:

• Donations to the Fidelity Charitable Gift Fund rose by 21 percent from January through November 30, compared with the same period last year. Seventy percent of donations to the gift fund are traditionally made in stock, so the fund does better when the stock market is doing well.

• Responses to year-end mail solicitations at Food for the Poor, an international relief organization, increased by 20 percent from appeals sent in the last part of 2005, says Zachary Hinton, director of development. Cash donations grew by nearly $500,000 in October and November, a 7-percent increase compared with the same months last year, he says.

• At the United Negro College Fund, contributions from individuals have increased by nearly 12 percent from the start of the charity's fiscal year in April through November 30, says John Donohue, executive vice president for development.

He attributes the rise to his organization's move to step up solicitations of government and corporate employees who give through on-the-job campaigns. Such employees had contributed $7.2-million by November 30 of this year, up from $5.9-million over the same period in 2005.

• At Share Our Strength, a national hunger-relief organization, "most of our 20-percent increase this year is due to the holiday campaign period" in November and December, says Chuck Scofield, director of development.

The charity, which raises $2.5-million annually, has seen a spike in holiday giving from individuals and companies. They are responding, he says, to better marketing efforts by the charity to promote cash donations to Share Our Strength — and sales of cookbooks and other food-related products that raise money for the charity — as holiday presents that people can use to fulfill their gift-giving obligations while also helping to ease hunger.

But other charities are facing a tough time.

America's Second Harvest, which supplies food and other supplies to many of the nation's food banks, says that unless donations pick up, the group will end up raising 9 percent less than it did last year. September and October were far more sluggish than in 2005, says Alice Archabal, the charity's vice president of philanthropy.

A big reason, she suspects, is that Hurricane Katrina called attention to the charity's work last year.

"There was a buzz about our work in response to Katrina, we had a lot of media presence then," says Ms. Archabal. The "halo effect" that the group had last year, she says, no longer exists.

The Salvation Army, which raises 40 percent of its total contributions in the last quarter of the year, says that donations to its holiday Red Kettle drive are lagging in some regions, after two years of record-breaking results.

The kettle drive raised a nationwide all-time high of $111-million last year, but "many areas are reporting that kettle donations are down," says Melissa Temme, public-relations director for the charity's Alexandria, Va., headquarters. "Many areas are finding it difficult to find volunteer bell ringers, which means you cannot put as many kettles out. From what we are hearing, it sounds like this year we may not reach $111-million."

Tax Law

A new tax law passed in August has triggered many contributions to charitable organizations.

One provision allows people older than 70 1/2 to give charities up to $100,000 a year tax-free from their individual retirements accounts.

The National Committee on Planned Giving, which is making an effort to track IRA donations through an online survey, reported that $13.3-million has been received by organizations around the country.

Smith College has received more than 20 IRA donations and expects to see more before December 31, says Trish Jackson, vice president for advancement.

The Nature Conservancy has received 46 retirement-account gifts totaling $915,000; in addition, the charity has 34 more retirement-account gifts in the works, valued at another $400,000.

Another new provision has helped conservation groups — and the association that successfully persuaded members of Congress to pass new tax benefits for people who donate their land rights to preservation charities.

The Land Trust Alliance, which represents more than 1,100 local land trusts, has received a $1-million from Forrest Berkley, a retired investment manager in Boston, and his wife, Marcie Tyre — a far bigger gift than the organization had previously received from an individual.

Half of the money is being used to fulfill the organization's promise to lawmakers that it would set up an accreditation system to provide training to officials of local land trusts and helping to ensure that conservation agreements are honored.

The rest of the money will match donations of $5,000 or more from new donors and encourage previous donors to give at least $5,000 more than they have in the past.

"I am a big believer in land conservation, and I have never given a gift this big," says Mr. Berkley of his $1-million contribution. "But what the Land Trust Alliance did is to help Congress understand that there is strong support for conservation. If it were not for the Land Trust Alliance, we might have a very different legislative climate."

Largely because of Mr. Berkley's donation, the alliance had raised $8.2-million by October 31 this year, more than its total of $7.9-million for 2005, and fund raisers expect to close 2006 with an 8-percent increase in contributions.

Bouncing Back After Katrina

For some nonprofit organizations, this year has been a turning point, after contributions dropped — or were flat — in 2005 because Americans were helping victims of Hurricane Katrina and other recent natural disasters.

Beauchamp Carr, executive vice president of development for the Woodruff Arts Center in Atlanta, says that some corporate grants the organization hoped to receive last year went instead to support disaster-relief efforts for Hurricane Katrina. Corporate giving has improved this year, Mr. Carr says. "We continue to see more and more leading firms come up very strong," he says.

Not all arts groups are faring well, however.

Joe's Movement Emporium, a Mount Rainier, Md., performing-arts center located near Washington, is having a tough time raising the last $100,000 in the first phase of its capital campaign.

An October year-end appeal, a mail solicitation underwritten by board members and sent to the center's donors, has performed poorly, says Brooke Kidd, executive director.

"We were hoping for a 6 to 10 percent response and $10,000. At best, we have received $2,000."

Says Ms. Kidd: "The shrinking pocketbook of our donor base may be a factor, we are in a poor neighborhood. This is a struggling part of the Washington metropolitan area."

Some local social-service groups have been facing increased demands for help this winter. In areas such as southeast Michigan where unemployment is high, emergency-services groups such as food pantries and shelters are reporting record numbers of requests for assistance with food, mortgage payments, and other aid from needy families.

The Gleaners Community Food Bank of Southeastern Michigan, in Detroit, has seen a 35-percent increase in demand for groceries in two of the state's wealthy suburban counties after recent layoffs at Ford, General Motors, and other companies, says Gerry Brisson, vice president for development.

The Food Bank, which supplies 420 soup kitchens, shelters, and other organizations in six counties, is operating at capacity but cannot meet current demands, he says.

Many small religious organizations are also facing difficulties this year. "The anecdotal evidence is that 2006 has been a challenging year to maintain contribution levels, compared with 2005, especially for smaller organizations who have less than $5-million in annual revenue," says Dan Busby, vice president of the Evangelical Council of Fiscal Accountability.

The council represents more than 1,200 relief organizations, missionary groups, and other religious charities; more than 70 percent of them have budgets under $5-million. The decline in contributions, Mr. Busby says, may reflect donor fatigue after years of disaster-related appeals, including September 11, the tsunamis in Southeast Asia, and Hurricane Katrina.

"People have focused on these appeals that relate to human life and suffering," he says. "Routine charity needs kind of pale in comparison."

New Year-End Approaches

Many charities are using the holiday season to try out new fund-raising approaches.

With enthusiasm waning for special events in some quarters and the glut of competing events at year end, some charities have found ways to make their holiday events more cost effective and inject new life into dinners, auctions, and other gatherings.

In New York, the North Shore Animal League last month held a year-end black-tie event. The twist: Dog owners were encouraged to bring their pets. The event netted $100,000. It also brought in new donors, new corporate sponsors, and requests for more dog-friendly events.

Says Alesia Soltanpanah, vice president of development: "It was more successful than we could have imagined."

More and more charities, including Defenders of Wildlife and the National Arbor Day Foundation, have followed the lead of relief organizations such as Heifer International and World Vision by creating gift catalogs that allow donors to make charitable contributions in honor of friends and relatives instead of buying those people presents.

The Christian Appalachian Project, a Lancaster, Ky., social-service organization, for example, has already raised more than $150,000 from its new holiday catalog, which allows donors to pay for items such as a month's heating bill for a needy family.

Last year, when the charity's catalog made its debut, it raised $70,000, more than double the amount fund raisers had projected. The catalog is mailed to 50,000 donors and also posts an order form on the front page of the charity's Web site.

The relief organization Oxfam America is offering an online-only version of its new catalog called "Oxfam America Unwrapped" to support its mission of alleviating poverty overseas through gift purchases, such as water jugs and camels. (The money raised actually goes into the charity's general fund, but each gift offering is typical of the ways in which the charity helps poor people improve their lives.)

To publicize the catalog, the charity purchased advertisements online and in magazines, newspapers, and on local radio.

It also received free publicity that helped its cause: On a recent episode of The Ellen DeGeneres Show, for example, the actress Minnie Driver presented Ms. DeGeneres with a live camel to highlight the charity's fund-raising drive.

In its first eight weeks, the catalog has netted $550,000, more than double the amount the charity had raised at this time last year, says Stephanie Kurzina, vice president for resource development. In addition to the money, she says, "this will be a vehicle through which we educate the public about what we do."