January 24, 2011

Strong Year-End Donations Helped Many Charities Rebound From Bad Economy

Rich Reid/Trust for Public Land

The Trust for Public Land raised $11.7-million to save Cahuenga Peak, in Los Angeles, the home of the famous Hollywood sign. It took just eight months to raise the money, far less time than a typical drive, and a good omen for 2011 donations, the group says.

Strong holiday-season contributions have made many charities optimistic that their fund-raising returns will improve sharply in 2011.

Sixty-two percent of 245 nonprofit organizations surveyed by The Chronicle reported that they raised more in November and December 2010 than at the same time in 2009. But even as some groups are rebounding quickly from the recession, others continue to struggle. Twenty-four percent of organizations reported year-end gains of more than 20 percent, while 28 percent reported drops in giving. One in 10 said giving was flat during the holidays.

Organizations of all sizes and missions responded to The Chronicle’s poll, which was conducted online in the first two weeks of January.

The year-end boost was one reason nearly two-thirds of those surveyed said they would close the books in 2010 with an overall gain in donations, with 24 percent of charities saying donations for the entire year grew by more than 20 percent.

A few of the groups with those big gains were international charities that did work in Haiti and received an outpouring of gifts; excluding them, only 22 percent had gains that exceeded 20 percent.

Perhaps an even healthier sign is that the 38 percent of groups said they had raised more in 2010 than they had before the recession started. Excluding Haiti charities, that number is 35 percent. But far more are still not reaching that milestone. Forty-seven percent of charities said cumulative 2010 giving was less than the amount they had raised before the recession.

More Appeals

Charities that did well during the last few months of 2010 stepped up their efforts to reach potential donors and tried to show donors how much of a difference their giving made at a time when demand for services was rising and contributions were hard to come by.

Sending more-frequent—but shorter—appeals worked for the Foundation for Jewish Culture, a New York group that raised $27,000 in November and December, more than double its 2009 year-end total of $12,000. Total giving, though, was flat in 2010, at $1.9-million, although the foundation expects to raise $2.5-million in 2011.

In the past three years the organization has abandoned fund-raising galas but plans to host at least one in 2011. “It’s time to honor people and toot our horn a little louder,” says Elise Bernhardt, the foundation’s chief executive.

The Volunteer Center, South Bay-Harbor-Long Beach, in Torrance, Calif., expanded options for donors to support in its holiday appeals. In the past, it used to promote just one—Operation Teddy Bear, which sends backpacks to kids all over the world with school supplies and a teddy bear.

This year, it also encouraged donors to earmark money either for “Food for Kids,” a program that provides elementary-school children from needy families with nonperishable items to eat on weekends, or for the organization’s endowment. It saw year-end solicitations garner $19,000 in 2010, a 27-percent jump from 2009.

Tedford Housing, a Brunswick, Me., social-services group for the homeless, raised $95,000 during the 2010 holidays, a 20-percent jump from the same time in 2009. Kristin Melville, director of development, says more people are willing to give because others are in a bind.

“It’s the economy,” she says. “People are reading about the high unemployment levels in this country. You can’t walk down the street and not see somebody who is really needy, who is homeless.”

Ramapo for Children, a Rhinebeck, N.Y., camp and retreat for children with special needs, says year-end fund raising in 2010, at $332,000, was up from 2009’s $302,000.

Jennie Stokum, the organization’s director of annual giving, says she had studied what other groups were doing to be successful online and noticed that charities said people who received more than one e-mail appeal a year were more likely to give than those who got just one. So she sent three messages to supporters in November and December instead of only one, as she had done during the last months of 2009.

As a result, the organization almost doubled the number of online gifts during the last week of the year from 28 in 2009 to 46 in 2010.

Gifts From IRAs

Even though 2010 has ended, some organizations are still urging their donors to make gifts that will help them on their 2010 taxes. The Heritage Foundation, a conservative think tank in Washington, is aggressively pushing its older donors to take advantage of the last-minute extension by Congress of a break that allows donors to channel up to $100,000 from their individual retirement accounts to charity tax-free. People who make such gifts through January 31 can count them as part of their 2010 taxes.

“That’s something we have marketed since the tax bill passed,” says John Fogarty, vice president for development.

Heritage says its year-end giving was weak in part because it had pushed donors to support campaigns earlier in the year; giving in November and December decreased 13 percent, to $16.2-million. But its overall returns for the year were strong, and the foundation expects an 8-percent gain over 2009, to $73.8-million.

Cuts in government funds drove some organizations to redouble efforts to seek private donations, while others are raising money for the first time. Elizabethtown Public Library, a nonprofit in Elizabethtown, Pa., said that over the past three years, the state has cut its funds by a total of 36 percent. So the library complained to the press about the reductions, garnering plenty of news-media attention throughout the year. And by the time people received a holiday appeal, they understood the library’s budgetary strains, says Deborah Drury Beisell, the library’s executive director.

Four percent of the 16,000 households that were sent mailings responded, including 255 new donors. As a result, year-end donations from the mailings increased from $5,550 in 2009 to about $23,100. Although the average gift in 2010 decreased from $51 in 2009 to $39.75, the number of donors increased fivefold, said Ms. Beisell. “The appeal was very, very clear, and it was very, very clearly stated, that [state funding] just wasn’t enough. We needed the community support as well.”

For 2011 she plans to run an online appeal at year-end to complement the mailings.

The New York Council for the Humanities began to focus more on its year-end annual appeal campaign as a supplementary way to get money as the state cut funds it had pledged to provide for 2010 and 2011. As a result, it surpassed its $15,000 holiday goal, raising $24,000, which was $17,000 more than it had raised in a year-end appeal in 2009. The number of donors more than doubled, from 50 to 109. Plus, the group secured a total of nearly $3,500 from more than half of the 120 members on its list of distinguished lecturers for a new giving circle, helping to increase the year’s take by $80,000, a 60-percent increase over 2009’s $50,000. “We won’t be able to fill the gap entirely,” says Sara Ogger, executive director of the New York Council. “There is a learning curve, as we learned to make our case to individual donors.”

Rebuilding Efforts

Charities say that now that the economy is rebounding, they hope to rebuild some of the efforts they had cut back during the recession.

The Trust for Public Land, a San Francisco group that preserves land nationwide, plans to hire about a dozen more fund raisers in the next two years.

It had hired 14 in 2010, including a new director of annual giving, and raised $66.9-million, a big increase from the from $44.9-million it had raised in 2009. During the recession, the group had two waves of layoffs throughout the organization, reducing the staff from 475 in 2008 to 320 today, says Margie Kim Bermeo, chief philanthropy officer. Three years ago, the organization’s fund-raising staff had 71 employees; now it has 56.

Among the reasons the organization is more optimistic about the power of adding fund raisers: Last year it went into overdrive to raise money to save the 138-acre Cahuenga Peak, whose land houses the Hollywood sign in Los Angeles.

In only eight months, it secured $11.7-million to save it, $6.5-million from private money and the rest from government sources.

Ms. Bermeo says it typically takes 12 to 18 months to raise that amount from major donors.

Other efforts are also showing signs of progress. It made a new effort to ensure that online and direct-mail efforts complemented each other and was able to increase the number of donations received from such appeals from 5,600 in 2009 to 7,200 in 2010. For 2011 the foundation hopes to expand its pool of donors by 44.6 percent, or about 10,000 donors. Ms. Bermeo says, “I’m very sanguine about 2011.”

About the Survey:

The Chronicle survey collected information from a wide range of organizations. Education groups (27 percent), social-service organizations (14 percent), and health-related charities (13 percent) made up the biggest share of groups.

Of the charities that participated in the survey:

14 percent had budgets of less than $1-million;

27 percent had budgets of $1-million to $4.9-million;

15 percent had budgets of $5-million $9.9-million;

12 percent had budgets of $10-million $24.9-million;

8 percent had budgets of $25-million to $49.9-million;

7 percent had budgets of $50-million to $99.9-million.

18 percent had budgets of $100-million or more;