Editorials

Nonprofits face uncertain future after Sept. 11 attacks

By Kimberlee Bortfeld, Special to the Daily Planet
Monday October 15, 2001

Local organizations losing funds to national groups 

 

Before the Sept. 11 terrorist attack, Peggy Bush worried about raising enough funds for the Center for AIDS Services, the only day center for people with AIDS in Alameda County. Now, her concerns have deepened.  

“I know that people have given to New York and Washington and to the firefighters and police,” said Bush, who serves as the nonprofit’s executive director. “And I think it’s great because they need the help. But for us, it’s aggravated an already dwindling of resources. Somehow, we have to get people interested in us as well.” 

Days after the Twin Towers fell and the nation awoke to the horrors of terrorism, people from all over the United States rallied together to lend whatever support they could to those affected by the tragedy. They lined up at blood banks, dug out their checkbooks and raised nearly $1 billion for relief efforts and victims’ families.  

One month later, the dust has settled and Bay Area nonprofits are wondering if the spirit of giving will last. Some, like Bush, believe the outpouring to victims’ families coupled with the floundering economy could spell trouble for small nonprofits.  

Bush said her agency has already experienced a drop in donations. And she said that a prolonged war in Afghanistan might exacerbate the problem.  

“There’s not the confidence out there. People are afraid and holding on to their money. They’re waiting. And we’re holding our breath,” she said. 

Every January, Bush holds an opera concert featuring New York singers to raise funds for the center. This year, the show will go on but Bush said she may have to rely on local singers.  

Tony Leong, Executive Director of the Berkeley-based Asians for Job Opportunities in the Bay Area, which provides employment, training and bilingual social services to 1,000 unemployed and underemployed individuals a year, is concerned about the attack’s impact on administrative funds. He suspects that the $200 to $300 a month his agency receives through United Way donor designations will be significantly less for September, though he has not yet received the figure. Such a drop, he said, would result in fewer Safeway coupons for clients and less money to cover everyday expenses like phones and stamps.  

Other local nonprofits, however, were unwilling to speculate about the impact of the attack.  

Boona cheema, executive director of Building Opportunities for Self Sufficiency, which provides housing, economic development and social services to 3,500 individuals annually, cautioned that it is difficult to tell what the response of donors at the local level will be.  

“It’s not as rosy as it was a year or two ago,” cheema said. “But I think enough time will have passed between September and December, when [donors] are doing their year-round giving, that I’m optimistic the effect won’t be as great as people think.” 

Rick Spittler, executive director of Bay Area Outreach and Recreation Program, which serves 1,200 physically disabled individuals a year, said he won’t know the extent of the impact until fall appeal letters are sent out in November. He also suggested that the effect might not be negative.  

“Maybe it will wake people up to how important it is to take care of everything and everyone, especially those in the community who are less fortunate,” he said.  

Ian McCuaig of 3Fund LLC, a San Francisco-based philanthropy consulting firm, agreed that the outcome could be positive. Although he said corporate and foundation philanthropy will probably decline, government funding will likely increase.  

“Early philanthropic response to the tragedy of Sept. 11 has been encouraging,” he said. “I am convinced that Americans will respond in a manner described 250 years ago as the ‘associative impulse,’ the coming together in a common effort for a common good.”  

McCuaig said that the onus will be on individuals to “pump up their giving and dig deeper than ever before.” He also said that the more a nonprofit can “equate its mission with the recovery effort” the better, and he was confident that “well-managed” nonprofits would ride the wave of uncertainty with little trouble. 

However, Pete Mountanos of Charitableway.com, which helps corporations integrate charity in their business models, was not as optimistic.  

“National surveys have recorded a substantial shift in priorities amongst the public with things like education suddenly declining behind security,” he said. “Overall there are certainly many more reasons to be concerned on a local basis than optimistic.” Among the reasons Mountanos mentioned was rising unemployment rates, a declining stock market and a struggling economy.  

Last year, charitable contributions from individuals totaled $152 billion, up 4.9 percent from 1999, and comprised 75 percent of the $203 billion total giving in the United States, according to the Giving USA 2001 report. Approximately nine percent was given to human service organizations and six percent to public interest organizations, which included federal giving programs such as United Way, community action agencies and community economic development programs. 

The Center on Philanthropy at Indiana University recently examined giving levels in the years surrounding 13 major events of terrorism, war, and political or economic crises, including Pearl Harbor, the Korean War, the Cuban Missile Crisis, the Gulf War and the 1993 bombings of the World Trade Center and Oklahoma City. They found several trends. 

Some of its findings include: 

• The total amount of giving in the United States has increased every year but one (1987) for the past 40 years, including through wars, recessions and other crises. However during recessions, growth in giving averages about 5 percent instead of the average annual rate of 7.6 percent . 

• In the two acts of terrorism examined, in the year in which the event occurred the rate of growth in giving increased over the prior year. 

• The rate of growth in giving slowed in the year after the 1993 World Trade Center Bombing, and increased in the year after the Oklahoma City Bombing.  

Eugene R. Tempel, executive director of the Center on Philanthropy, said that the findings show that giving and the stock market are resilient. “While this (the Sept. 11 terrorist attack) is a unique situation, in the past Americans have shown a remarkable capacity to recover from adversity, both economically and spiritually, as measured by the stock market and giving,” he said. 

Regardless of the outlook, most nonprofits have decided not to leave giving levels to fate. Bush said that her agency is redoing its brochure and making it more alive and colorful, in the hope of attracting more donors.  

“You’ve got to do what you can do now,” she said. “You can’t just wait until it’s all dried up.”