Non-profit groups are feeling pinched as charitable giving lags in 2002, according to several recent articles.
A downturned market has individuals and companies minimizing, delaying or even canceling donations altogether, forcing many non-profits to reassess and regroup financially.
“Just as the market reshaped philanthropy on the way up by pumping new billions into non-profit organizations, now it is doing the same on the way down by dictating how much and when donations flow in,” wrote John Boudreau in San Jose’s Mercury News.
Boudreau cited BEA Systems co-founder Bill Coleman’s gift to the University of Colorado as an example. Coleman announced a $250 million stock gift in January 2001. At the time, BEA stock was trading at $63.13 per share. On July 26, 2002, it closed at $5.82, constituting “a half-billion-dollar plunge,” according to Boudreau.
Ashoka, a non-profit developing social service agencies, has seen its major donors take significant hits, according to the New York Times.
“Three of our top seven donors lost 90 percent of their wealth last year,” read an Ashoka letter to potential donors, according to the Times.
Only 10 percent of Ashoka’s endowment, however, is based on stocks, putting it in a better position than other charities, the Times reported. The Lilly Endowment is down more than 40 percent, while the Ford Foundation has declined 30 percent.
“I think every charity today is hoping life will get better but uncomfortably preparing to adjust if it doesn’t,” Daniel J. Rose, New York real estate developer and philanthropist, told the Times. “Which means eating into reserves, deferring programs you wanted to start and retrenching.”
The Chronicle of Philanthropy recently surveyed 99 U.S. companies, among the 150 biggest based on annual revenue. The survey found that after five years of “double-digit growth in business gifts,” donations will tighten.
“Two-thirds of the companies in the Chronicle survey said they plan to donate about the same amount or less this year than they did in 2001,” according to The Chronicle, which noted that Sept. 11 relief contributions buoyed 2001 figures.
Dwight F. Burlingame, associate executive director of IndianaUniversity’s Center on Philanthropy, hardly expressed optimism for 2002.
“With some notable exceptions, it looks like a bad year in terms of corporate charitable giving,” he told The Chronicle.