News and analysis
October 05, 2014

Changing Demographics Help Pull Las Vegas Out of a Charity Slump

Alex Daniels, for The Chronicle

Brian Burton, who runs a food bank, says Las Vegas groups collaborated more after the recession: “As long as there was cash, nonprofits did their thing separately. Now we’re all in the same room.”

This article was updated on January 13, 2015. See our editor’s note.

Las Vegas nonprofits have always acted a bit like casinos courting gambling whales, the high rollers who are flown into the city and given royal treatment as they spend hundreds of thousands of dollars at the baccarat and blackjack tables.

But when the recession hit in 2007, the big money dried up for casinos and nonprofits alike. Wealthy donors, like high-end gamblers, often provide nonprofits a big windfall, but they can’t be counted on as a steady source of revenue.

Yet despite a staggering housing foreclosure rate and blows to employment that the desert gambling mecca still hasn’t recovered from, giving relative to income in Las Vegas grew faster coming out of the recession than in any other city. In 2012, according to a Chronicle study of tax data, residents in the metropolitan area gave 2.7 percent of their income to charity, a 15-percent increase over their giving rate in 2006, before the recession.

A big reason for the increase is that smaller donors began writing checks as they saw their neighbors in the entertainment and construction industries lose their homes and their jobs. The housing crisis, according to Jessica Word, a professor at University of Nevada Las Vegas, caused many to put down roots in the city. Rather than swinging through town for a few years to enjoy the gambling and night life, many Las Vegas residents found themselves deeply in debt, holding underwater mortgages and unable to sell their homes.

"They bought houses here and got trapped," she says. "As a result, people began to commit to this place in a different way."

In response, charities placed an emphasis on attracting smaller donors.

"Hitting the same people up all the time wasn’t working," Ms. Word says.

Dealing With Crisis

To be sure, megadonors remained important. Sheldon Adelson, the chief executive officer of Las Vegas Sands, and his wife, Miriam, have given more than $110-million to charitable causes since 2007.

But many charities saw a decrease in large donations given locally, and longstanding local causes withered on the vine. The Nevada Cancer Institute opened with great fanfare in 2005 with the backing of $65-million from private contributions. But it was unable to sustain that giving level and declared bankruptcy in 2011.

Donors fled from the Jewish Federation of Las Vegas. The collapse of the federation’s annual campaign, which drew $4-million in 2007 and only $1.2-million the following year, came largely because large donors held back.

In 2007, the federation received 14 gifts of $100,000 or more. "In 2008, that went to zero," says Elliot Karp, the federation’s president.

Mr. Karp began meeting monthly with other local nonprofit leaders to discuss strategies for revitalizing local giving, and it has shown results. The federation expects to bring in $5-million this year—well above its pre-recession peak.

"As long as there was cash, nonprofits did their thing separately," says Brian Burton, president of Three Square, the city’s largest food bank. "Now we’re all in the same room, talking and playing nice."

Far From the Action

The glowing neon buildings full of drinking and gambling vacationers are barely visible through the desert haze 10 miles up the road, where volunteers at Three Square’s warehouse answer phones, sort through donated food, and pack red boxes with lunches.

Those lunches will be eaten that day by the sons and daughters of the workers who fuel the good times on the strip. And those same workers, Mr. Burton hopes, will raise money to keep the food bank afloat.

That’s because he can’t rely on all his major benefactors, the Donald W. Reynolds, Conrad N. Hilton, and Lincy foundations, in the future. In 2011 the Lincy Foundation, founded by casino mogul Kirk Kerkorian, closed shop. In 2017, the Reynolds Family Foundation will finish winding down its assets.

But before the Lincy Foundation gave its last grant, it provided $1-million to Three Square to build a direct-mail operation from scratch.

Thanks to the grant and efforts to get some of the food bank’s nearly 15,000 annual volunteers to give, Mr. Burton now has a donor base of 30,000 people.

But reaching out to individual donors can be different in Las Vegas. Often, he says, people will live in the city for just over a half year to take advantage of the fact that Nevada doesn’t have an income tax. These people often prefer to be left alone.

This summer, the food bank sent out its first donor survey to get an idea of how people might want to get involved.

"Some people were furious we were asking for this information," Mr. Burton says. "You would have thought that I had slept with their grandmas."

But the efforts seem to be paying off.

In 2008, foundations accounted for more than 80 percent of Three Square’s revenue, while gifts from individuals were a meager 2 percent. This year, Mr. Burton says, foundation revenue is expected to come in at 13 percent and gifts from individuals at 37 percent, during a period when total income more than tripled to $63-million.

In the city’s infancy, local philanthropy leaders say, a charity that wanted help would go directly to a place like Circus Circus or Caesars Palace, make a pitch, and, if every thing went right, the manager would send someone to the vault on the spot for a cash gift.

Modern corporate giving in the city is far more structured. Cirque du Soleil, for example, puts on a special show each year with the proceeds earmarked to One Drop, a charity that works for safe water in the developing world. MGM, which runs casinos like the Mirage and Bellagio, donated $2.6-million in cash to charities in 2012. Plus, more than half of the company’s workers donated to its employee foundation, chipping in a total of $4.7-million.

Charity at the Las Vegas Sands, which has 7,000 hotel rooms in the city, has focused on the University of Nevada at Las Vegas’s professional-development center for the hospitality industry, including $7-million given in the last five years. Sands also has made a $1-million commitment to Clean the World, a charity that packages hygiene kits from the company’s unused soap and shampoo. On a late September Saturday, volunteers from the casino company put together 100,000 of the kits, which will be distributed to the homeless and to disaster victims by the Red Cross.

The Red Cross of Southern Nevada has gotten "onesies and twosies" from the Las Vegas Sands, but Scott Emerson, the charity’s chief executive, hopes the casino’s role putting together the kits is the start of something deeper.

Mr. Emerson says the Red Cross’s donations fared pretty well during the recession, largely because it’s a well-known charity that wasn’t among the first scratched off donors’ lists when the economy faltered. But demand increased dramatically.

In a young city with a relatively untested cadre of fundraisers and nonprofit officials, "it doesn’t take much to put yourself ahead of the pack," he says. Many donors are really impressed by a phone call or a handwritten thank-you note.

To build even closer ties, Mr. Emerson got donors to hand out rations during floods and other disasters.

During a fundraising drive for relief efforts in Haiti after the 2010 earthquake, he showed them photos of solar and crank radios the Red Cross distributed in remote sections of the country. He also brought one of the radios to meetings so donors could try it out.

"We’re trying to go beyond just a pen-pal relationship with our donors," he says.

Donations from foundations and individuals dipped for three years starting in 2007, but in 2013 they surpassed $1.3-million, more than three times their pre-recession level.

Diana Bennett and Kris Engelstad are part of a group of second-generation Las Vegas residents whose parents were lured to the city by its riches and who have stayed simply because it is home. The two women’s families came from humble beginnings. Ms. Bennett’s father ran a furniture merchandiser into bankruptcy before taking on low-level jobs at Lake Tahoe and Las Vegas casinos and moving up the rungs until he ran the Circus Circus casino. Ms. Engelstad’s father, a Minnesota native who grew up to run an independent casino, the Imperial Palace, couldn’t afford hockey pads as a kid, so he stuffed newspapers in his pants.

Now, both women run family foundations that are poised to donate hundreds of millions of dollars. And both are convinced there’s a lot more money waiting to be put to use.

Ms. Bennett said when the Lincy and Reynolds foundations announced they were closing operations, local philanthropists realized they would need to shoulder a greater responsibility. In 2011, several charity leaders organized a giving circle that picks a charity and provides it with $500,000.

One of the group’s beneficiaries is Casa de Luz, a church that runs antipoverty programs. Three years after the giving circle chipped in, the church was still having trouble making ends meet. Ms. Bennett gave another $100,0000, but this time she enlisted the help of Anna Auerbach, a consultant at Moonridge Group Philanthropy Advisors, and Mr. Burton, the food-bank operator, to develop a plan for the church to operate long into the future.

It remains to be seen whether the nonprofit will get back on its feet, but Ms. Bennett is encouraged by help the church is getting from other nonprofit leaders.

"They can’t come to me every time they’re in trouble," she says.

 

Editor’s Note: In this and other stories on How America Gives, we used ZIP-code data from the IRS to make comparisons between 2006 and 2012, the only years for which income and charitable donation data were available broken out by income and geography. However, to protect privacy, the IRS suppresses some ZIP-code data when there are fewer than 20 filers in a given income group. As a result, some figures are lower than what they’d otherwise be.

Since our original report, we’ve updated our interactive with county-level data for 2012, which do not have any data suppressed. Unfortunately, such data are not available for 2006.

Many of the figures used in this and other How America Gives stories are based on the original 2006 and 2012 ZIP-code data to make those year-over-year comparisons.

For the latest and most accurate 2012 data, see our interactive.

Send an e-mail to Alex Daniels.