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Sept. 11 and a recession leave mixed results for nonprofits

By John Geluardi Daily Planet staff
Saturday January 12, 2002

Berkeley nonprofits, which rely heavily on end-of-the-year donations, were fearful that a combination of the Sept. 11 attacks and the economic recession would create the dreaded “perfect storm” scenario. 

But a quick look at four local nonprofits showed mixed results, with two agencies‘ contributions in decline and others discovering they received as much as – or more than – last year’s totals.  

“Last year we received about $86,000 in donations, once this year’s count is finished, we will be over $100,000,” said boona cheema, executive director of Building Opportunities for Self Sufficiency, which provides a variety of homeless services. “Part of the reason is a statewide public awareness campaign that reminded people not to forget their local charities, and the other reason is people in Berkeley are very compassionate. That’s just who we are.” 

After predictions of huge shortfalls and concerns about a state budget shortfall (Gov. Gray Davis proposed a $2.7 billion cut to state programs on Thursday), strong end-of-the-year donations were good news, especially to nonprofits that provide safety-net services, such as emergency shelter, food banks and medical services.  

Last November a statewide survey of 413 nonprofits, many which provide safety-net services, showed a drop off of $25 million in donations during the year – an average of $62,000 per agency. 

California Cares, a coalition of philanthropic foundations, commissioned the survey, which determined the drop off in donations was related to the recession and aftermath of the Sept. 11 terrorist attacks, which intensified the recession and diverted donation streams to East Coast charities primarily in New York City. 

The survey also reported that as donations were dropping off, safety net or critical need nonprofits were seeing a large increase in demand for their services caused by a spike in recession-related unemployment.  

Critical need nonprofits, which typically provide their services on thin budgets, refer to this scenario as the “perfect storm.” 

“A perfect storm is a worry for safety net providers,” said Steve LaFrance of San Francisco-based LaFrance Associates, which conducted the survey. “It occurs when a sharp decrease in funding is matched by a sharp increase in need.” 

LaFrance and Associates is conducting a follow-up survey that will gage how the state’s nonprofits fared during the final months of the year. “We won’t have any hard data until the survey is completed sometime around the end of February.” he said. 

But a sampling of four nonprofits in Berkeley showed that predictions were only partially correct. 

Berkeley results mixed 

According to Berkeley Emergency Food and Housing Project Executive Director Marci Jordan, her organization has collected nearly $100,000 more than last year’s donations. BEFHP, which serves meals five days a week and runs one emergency homeless shelter and two transitional housing facilities, counts on charitable donations for about 30 percent of its $1.7 million annual budget. 

“We’ve made some extraordinary efforts this year,” Jordan said. “We started our newsletter again, increased membership on our board of directors and we had two successful fund-raisers this year.” 

Jordan added that the local spirit of giving is strong. “People are a little different in Berkeley,” she said. “They are very compassionate here, they are aware of the city’s charitable organizations and they support them.” 

Cheema said the $2 million statewide ad campaign, launched by California Cares, also had a positive effect on the local community. 

According to LaFrance, California Cares kicked off the month-long campaign on Dec. 4 and the ads ran on television, radio and in newspapers throughout the state. The campaign’s message simply asked state residents to remember their local charities. 

But not all local nonprofits did so well. At least two medical providers saw a decline in donations. The Berkeley Free Clinic, which relies on individual donations to cover about 35 percent of its annual funding, is still collecting funds from an end-of-the-year appeal, but its 2001 numbers are off. 

“We normally collect about $60,000 from individual donors over the course of the year,” said BFC bookkeeper Sairah Husain. “And about half of that comes in during the holiday season.” Donations were down about one-third, she said. 

Husain said it is too early to say how the final donation numbers will look but she expects to see a decline. She added that the clinic has not made plans to cut services as a result of the shortfall. 

The LifeLong Medical Care also saw a drop in donations. According to Planning and Development Director Henry Lucero, they’re down about $17,000 for the year.  

“Charitable donations count for a small part of our annual funding but as with most nonprofits a loss of more than $10,000 makes a big difference.” 

For information about donating to the Berkeley Free Clinic call 548-2570. LifeLong Medical Care can be reached at 704-6010. 

Building Opportunities for Self Sufficiency can be reached at 649-1931 and the Berkeley Emergency Food and Housing Program at 649-4965.