Nonprofits struggling to provide services for those in need

The Charitable Challenge

The construction industry has faced more difficulties than any other in this recession. The industry lost 45,800 jobs year-over-year in September, the most of any sector in Arizona. Despite that grim number, many construction companies still are trying to give back to the community in any way they can. Hunt Construction is one of them.

When the Society of St. Vincent de Paul, a nonprofit organization dedicated to serving the poor, needed new vehicles to help with day-to-day operations, Hunt didn’t hesitate. The company essentially donated vehicles to the nonprofit by selling it two trucks for a mere $2.

“The construction industry, like so many industries in Arizona today, is facing a number of challenges. Having said that, I am just amazed at how generous they have been to us,” says Steve Zabilski, executive director of the Society of St. Vincent de Paul. “The vehicles are pickup trucks that are in great shape and we use them almost daily in our various operations”

Hunt wasn’t the only one to step up to the philanthropy plate and help the charity during these difficult economic times. Another contractor, Gilbane Building Company, made St. Vincent de Paul a beneficiary of its golf tournament this past year, resulting in a $10,000 gift.

This generosity is just one example of companies’ ongoing commitment to philanthropic efforts despite a recession that has left the world reeling from its impact.

Recession reductions
The Arizona Alliance of Nonprofits conducted a survey of member nonprofit organizations in February 2009 about the effects of the economy from the beginning of 2008. The survey also included projections for 2009. The results found that “one-half of nonprofits reported that their revenues declined in 2008, and two-thirds said they expect revenues to be down further in 2009.” This equates to about 75 percent of nonprofits working with reduced budgets this year.

“The largest decrease in donations was from foundations, which decreased an average of 26 percent. That was followed by corporate donations, which declined an average 24 percent,” says Patrick McWhortor, president of the Arizona Alliance of Nonprofits. Individual contributions decreased approximately 14 percent.

Elaine Fogel, communications chair of the Arizona chapter of fundraising professionals, echoes these sentiments.

“I think that based on both anecdotal (evidence) and statistics, we are definitely seeing a downturn in charitable giving across the board. Locally, regionally, nationally, absolutely,” Fogel says.

According to the survey, on average, revenues decreased 19 percent in 2008, and nonprofits expect that number to decrease another 18 percent this year.

Organizations such as the Sojourner Center that receive funding from the government also have seen revenues shrink.

“Our losses really came from receiving a severe cut in our government contracts,” says Connie Phillips, executive director of the Sojourner Center, which helps families in crisis. “I anticipate in the state of Arizona we will continue to see funding from the government decrease. … If we lose even more of our government funding and have to pick even more from the philanthropic community, how do we retool?”

The Piper Notebook, a magazine published three times a year by the Virginia G. Piper Charitable Trust states: “If life as a nonprofit has always been difficult in Arizona, the economic recession has further strained capacity. Nonprofits face lower revenues as government shrinks, fund endowments decline and individual contributions dip.”

Increased needs
With fewer resources but an amplified need for services, nonprofits are forced to make do with less. The recession has caused an increase in demand for a variety of services, with vital basic needs such as food and shelter high on the list.

“More than 80 percent of organizations saw demand for services grow in 2008 and 2009,” McWhortor says. “Of course, this issue is most concentrated with nonprofits who serve our most vulnerable populations — workers who have lost their jobs, homeowners facing foreclosure, homeless families and youth, people who are hungry. These issues will become more urgent in the coming months as further reductions in state funding for programs undercut the ability of nonprofits to serve the elderly, disabled and economically stressed populations.”

Merl Waschler, president and CEO of Valley of the Sun United Way (VSUW), says thousands of individuals and families are turning to VSUW and the nonprofit network for assistance. The organization’s partner agencies also are citing an increased demand in several areas, particularly food and shelter.
The nonprofits face a wrenching conundrum: Demand is higher than ever due to the poor economy, but since the economy is bad, philanthropic organizations can’t get additional funding to meet their goals and provide the community with the services it requires.

Philanthropic struggles
Just as different industries were affected by the recession in various ways, so too were philanthropic organizations. While basic-needs organizations struggle to keep up, arts organizations face their own set of challenges during this exceptionally tough year.

“We were hit as aggressively as anyone. A lot of what you see at the foundation level and/or the corporate level, some of the emergency social service needs are kind of the priority, and rightfully so,” says Seth Sulka, director of development at the Valley Youth Theatre.

Sulka says the Valley Youth Theatre saw significant drops in both ticket sales and contributions and stresses that it’s important to remember about all types of nonprofits.

“We can’t forget about the arts and expect every organization to have the resiliency to weather such a storm,” she says.

As a private nonprofit contracted by the city of Scottsdale to administer city arts and cultural projects, the Scottsdale Cultural Council also was hit by the realities of the recession. The council encompasses the Scottsdale Center for the Performing Arts, Scottsdale Museum of Contemporary Art and the Scottsdale Public Art Program. It saw an approximate 22 percent year-over-year decrease of contributed revenue (from individuals, corporations and foundations).

“Like almost every arts organization, we experienced a loss of contributed and earned revenue as a result of the recession, which also happened to coincide with the renovation of the Scottsdale Center for the Performing Arts. Because our main theater was closed for more than a year, we had already planned to operate on a reduced budget,” says William H. Banchs, president and CEO of the Scottsdale Cultural Council.

The center continues to move forward and is implementing necessary changes to weather the economic storm.

“Throughout the season, we tightened our belts and focused on our mission and programming,” he says. “We made very personal, one-on-one efforts to engage our donors, as well.”


Photos from left to right:
Intel employees serve as e-Mentors to students at Scales Technology Academy in Tempe. They help youngsters build computer and communication skills. Photo Intel Corp.

NASCAR legend Richard Petty auctioned off one of his cars for charity at last year’s Barrett-Jackson Auto Auction in Scottsdale. Photo: Barrett-Jackson Auction Company.