By William Wan and Brigid Schulte
Washington Post Staff Writers
Tuesday, December 23, 2008
In the world of philanthropy, December is everything. It's the one month when people are at their most generous, when procrastinators rush to beat the year-end tax cutoff for donations, and when charities count on collecting as much as a third of their annual contributions.
This year, with rising unemployment and a tanking economy, donors have already informed at least one-quarter of nonprofits in the Washington that they will be giving less, according to the Center for Nonprofit Advancement. As a result, more than 40 percent of nonprofits plan to reduce programs or cut staff, and most are reevaluating the way they do business to weather the year ahead.
But before the calendar turns, they are also scrambling to use the final days of December to squeeze out every possible donation.
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"I'm calling to thank you for your gift," said Linda Dunphy, executive director of Doorways, which offers shelter to homeless or battered women and their families in Arlington. All night, she had been leaving messages, calling a long list of pledge donors to make sure they followed through with a check.
Her voice did not betray the anxiety she was feeling. In past years, December has been key for Doorways, which usually raises at least $60,000 in individual donations toward its $2.5 million annual budget in that month.
But by the middle of December, Doorways was way behind. Corporate sponsors including Morgan Stanley and Merrill Lynch had pulled out of Doorways' annual Walk-A-Thon, erasing $50,000 in expected funding. Another $20,000 was lost when a local investment banking firm decided to suspend all of its giving. Fewer people showed up for a major fundraiser, so another $12,000 was lost.
And most ominously, a $300,000 grant from the Freddie Mac Foundation was still in limbo.
Doorways serves 150 families every year, homeless parents, children and abused women with nowhere to go. Even as funding has declined, demand for services has shot up by one-fourth. Seven families have been turned away recently. . Thirty are on the waiting list. If funding for next year falls, the worst-case scenario would be closing some programs and leaving people on the street.
Still, Dunphy's voice remained calm. "We really appreciate your donation," she said, leaving the message on the donor's machine.
She was joined by four volunteers one evening last week. The calls had brought their own share of sad news: a loyal donor who had just lost a job and could no longer meet a pledge. Quick no's from people stretched too thin. But there was also a little hope.
"Charity begins in the home," answered one woman when volunteer Judith Stearns called. She doubled her pledge, saying she was cutting back on other causes to fill immediate needs such as food and shelter.
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In the name of one of those "other causes," the Rooftop Terrace of the Kennedy Center was transformed last week into a softly lighted winter wonderland. A silent auction was underway for the Choral Arts Society of Washington. In tough times, arts and cultural charities face a different kind of challenge: relevance. Many such organizations fear that donors will see them as luxuries and expendable.
Up for bids at the fundraiser were a $20,000 trip to the United Arab Emirates, a $4,000 Italian cashmere cape with black fox trim and a $500 shopping spree at Bloomingdale's.
Gala chairwoman Catherine Jones looked around the room, jammed with people in black ties and ball gowns, and noticed that several items lacked a single bid. With 30 percent of the Choral Arts Society's $2 million annual budget raised at this one gala every year, it was not a good sign.
A commercial real estate broker, Jones knew when she began planning the gala in February that the economy was headed for a recession. To cut costs, she arranged for the wine to be donated. She got rid of hors d'oeuvres and gift bags for guests, who pay upward of $600 to attend. Instead of the usual Washington investment banker crowd, she targeted more-robust defense contracting firms in Northern Virginia. She also made sure to emphasize that a quarter of the funds raised go to music education programs for underprivileged children.
Elizabeth Elser, who has attended the holiday concert and gala for 10 years, had been eyeing a $5,000 painting all night. "That, I probably would not buy because it's just so expensive," she said. "But in other years, I probably would."
The group had hoped to make $120,000 from the auction. In the end, it cleared $84,000.
But Jones was pleased. "I personally didn't expect to capture that many people nor that much money," she said.
As for next year, would Choral Arts cancel its gala, as so many other groups have already? "We may refocus what we do next year," Jones said, "depending on what happens in the next three months."
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Earlier that day, in Northwest Washington, organizers of another kind of event were suffering the opposite problem: overwhelming interest.
Washington's top nonprofit leaders had called an emergency meeting downtown to try to figure out how to survive the economic crisis. It was supposed to be an intimate gathering of a few dozen leaders, but so many nonprofits registered that organizers had to create a waiting list. The meeting was dubbed "Nonprofit 911."
At times, the 500-person town hall meeting resembled tent revivals of old. There were prophecies of doom, messages of hope and testimonies from people struggling in hard times.
"If you think it's a storm, you just batten down the hatches and wait for it to pass," another said. "But this is more like climate change . . . like the coming of the ice age."
After a particularly heavy round of hand-wringing, the moderator, radio host Kojo Nnamdi, instructed attendees, "Deep breaths, everybody."
Michael F. Curtin Jr. stepped out to the lobby for a break from the meeting. The chief executive of D.C. Central Kitchen, which feeds the homeless and trains unemployed men and women to work in food service, gave a heavy sigh. So far, what he had gleaned was this: "Even the most pessimistic outlook out there is not pessimistic enough," he said.
This year, his organization has lost about 40 percent of its corporate donations. Some companies told him flat-out last month they couldn't sponsor the signature fundraiser, an "Iron Chef"-style cooking contest. So he has begun focusing on social entrepreneurship -- programs that generate revenue while simultaneously giving jobs to the homeless. The organization has bought food carts from which clients can sell po' boy sandwiches and gumbo and launched a frozen dinner line to sell in grocery stores.
"We knew the charity model wouldn't be sustainable forever," he said.
Throughout the summit, leaders discussed other responses to the crisis: sharing accountants, health plans and even office supplies.
As the meeting wound down and the auditorium emptied, many were already plotting strategy for next year. As bad as this year has been, experts say, 2009 might be worse.
"No one knows what's going to happen, the kind of choices we're going to have to face," said Adam Tenner, director of Metro TeenAIDS. For weeks, anxiety over his group's finances has gnawed at him so much that his stomach started hurting.
"When the choice becomes which service we're going to cut, who we're going to stop helping," he said, "any choice is going to be a bad one."