News and analysis
June 08, 2010

Youth Organizations See Fund-Raising Declines

Bill Wood/Reading Is Fundamental

Reading Is Fundamental last year more than doubled the amount raised in a campaign with Macy’s.

Many youth organizations struggled last year with declining support from corporations, United Ways, and foundations, as well as individual donors. Since the recession began in 2007, donations to organizations that serve youth—as well as other human-services groups have dropped 13.5 percent, according to Giving USA.

“Both 2008 and 2009 were tough years,” says Vikki Morrow, chief executive of Girls Inc. of Greater Atlanta, where contributions declined by 7 percent to $800,000.

The local United Way reduced the amount it provided by 25 percent, “and we had a lot of foundations say they were caught between a rock and a hard place,” says Ms. Morrow. Corporate support was much harder to come by too, she adds, and many individuals reduced their gifts.

“There was no decrease in the number of donors, but they gave significantly less,” says Ms. Morrow. “Donors who gave $1,000 in a prior year would give $100 or $200. This happened a lot. And I haven’t seen any improvement in fund raising this year.”

At the Boys & Girls Clubs of Greater Washington, “we felt the reverberations of the economy,” says Leah Lamb, chief development officer.

Contributions declined by 10 percent last year, and the charity closed some facilities, laid off staff members, and froze the salaries of remaining employees, in addition to requiring them to take seven unpaid days. In another cost-cutting measure, senior-ranking officials took a 10-percent pay cut.

Ms. Lamb says that her organization is doing better this year. It will not raise what it did before the recession, she predicts, but is on track to meet its goal to raise nearly $11-million this year.

“It is still going to be a nail biter, but we are encouraged,” Ms. Lamb says. Some longtime donors have increased their gifts, she says, and the group has been able to recruit a few new donors.

Across the nation, Girl Scout councils raised $130-million last year, down from $150-million before the recession, according to Delphia York Duckens, senior vice president of fund development at Girl Scouts of the USA. She also says that the economic downturn has shrunk what Girl Scouts headquarters is able to raise annually from $10-million to about $8.5-million.

“I’m not overly optimistic that the fund-raising climate is going to improve until around 2011,” says Ms. Duckens. “People are still uncertain. There are not enough signs to indicate stability, and I think donors are going to be very cautious.”

Some youth groups were able to achieve increases last year, in some cases impressive ones. At Reading Is Fundamental, which provides free books to children, donations from foundations fell by 14 percent last year, to $410,000, but corporate support skyrocketed.

Since 2006, Macy’s has held events every year that allow shoppers to get $10 off a purchase of $50 or more by giving $3 to Reading Is Fundamental. Lynn Croneberger, the charity’s vice president of development, says the annual July campaign also gets a big boost from Reading Is Fundamental volunteers, who visit local Macy’s stores, get to know Macy’s sales staff, and help organize the campaign.

Last year proceeds from the fund-raising effort more than doubled, to $6.5-million. Ms. Croneberger says that the Macy’s campaign is especially effective in hard times, because it offers an affordable way for people to help children while saving a little money. It also appeals to Macy’s because the campaign attracts customers and costs very little to organize.

“Companies rely on us to help them in the recession,” Ms. Croneberger says. “And cause-related marketing is cheaper than advertising.”

The charity, however, is facing other financial challenges that could threaten its survival. It relies on federal funds for 75 to 80 percent of its $35-million budget, so Reading Is Fundamental officials were alarmed when the White House proposed a plan that could cause it to lose much of that money.