By PHIL LEMOS
The Hartford Courant
March 10, 2001
The current economic chill is beginning to be felt by those whose business it is to spread warmth.
President Bush made faith-based giving and charitable contributions an early focus of his administration. But leaders of area nonprofits, from the United Way to the Greater Hartford Foundation for Public Giving to the Multiple Sclerosis Society, say a continuation of the current economic slump could lead to a drop-off in donations.
There is some evidence it may already be occurring. Directors of the National Kidney Foundation of Connecticut recently had to cancel a fund-raiser in Stamford because of slow ticket sales.
A recent survey by The Chronicle of Philanthropy, a newspaper covering nonprofits, indicates that more than half the nation's private foundations expect giving to drop or plateau this year.
The trend could continue into 2002 if the economy slips into a recession, according to the report.
Also, 65 foundations (slightly more than half of those that responded to the survey) lost a total of $9.03 billion in assets, largely because of the stock market's downturn, the Chronicle report states.
Kim Hathaway, the kidney foundation's executive director, said she planned on doing seven fund-raisers this year. But as signs of a recession continue to loom and the Stamford fund-raiser was canceled, she said, the foundation has been forced to scale back to four.
"A lot of our money in the past has been raised through special events - golf tournaments, dinner dances and bowl-athons. They donate money, but they get something in return," Hathaway said. "They're more hesitant to spend that money now."
"I think you can look at the end of this past calendar year and see there was a leveling off. People were stepping back to see how the economy will move," said Karen Putnam, director of philanthropy for the Bessemer Trust, a wealth management firm.
Small-scale donors decide they can't make one-time donations of $100, while those who donate a portion of their stock market profits won't have that net gain to give, Putnam said.
She said that if the U.S. Senate follows the House's lead and backs Bush's tax cut, it might encourage people to open their wallets again.
Still, people who are increasingly likely to switch or lose jobs may not be able to fulfill their donation promises, said BillyeSimmers, executive director of the Brain Injury Association of Connecticut. Knowing that stagnant coffers could be waiting, the association is attempting a full-court press to educate the public on traumatic brain injury, she said.
"It's a Catch-22 across the board," said George Bahamonde, president of the United Way of the Capital Area. "When the economy is good, people contribute, but when it isn't, human service agencies are always being affected. We've had individuals make pledges and have to back out because of finances."
The concern also is felt in schools and churches.
Richard Sherlock, pastor at Center Church in Hartford, said churches will see their donations drop off if the unemployment rate rises. Unemployment affects the poor first, he said, and churches with memberships in the lower income brackets will be the first to feel the effects.
Xavier High School in Middletown is hoping that an enrollment increase will offset a possible recession-caused drop-off in donations for scholarships and capital improvements, said Joseph Lane, assistant director of development.
Even without the tax cut, however, there is a select group of fund-raisers that appear better able to cope with a recession. In lean times, people tend to rediscover television and radio instead of taking in long trips or fancy dinners. Connecticut Public Television and National Public Radio are beneficiaries.
"We're aware of it [the possible recession], and we don't want to be cavalier about it, but we think in down times maybe people feel a little guilty because they don't contribute," said Mary Hobart, CPTV and WNPR vice president of development.
And at the University of Hartford WWUH-FM (91.3), which runs one of two annual fund-raisers in the winter, the listeners have been good to the station in bad times.
"We haven't figured out exactly why, but it might be because when there's a recession, people appreciate the little things even more," said John Ramsey, the station's general manager. "When things were really bad here in the late '80s and early '90s, we'd have fewer people donating, but they'd give 10 to 15 percent more."