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Charities: Giving is down; need is up

©Associated Press
February 5, 2003

As economic troubles swell the ranks of needy Americans, many charities are contracting rather than expanding, the result of a distinctively daunting year for fundraisers.

Charity officials say their task in 2002 was complicated by multiple challenges: not only the waves of layoffs and stock market plunges, but also eroded trust in some institutions, anxiety over a possible war and donor fatigue after the generous response to the Sept. 11 terrorist attacks.

Comprehensive nationwide donation statistics for 2002 won't be available for several months, but interviews with officials of national charities, and an Associated Press survey of 126 charities in 44 states and the District of Columbia made clear the breadth of the problem.

Of the surveyed charities -- contacted from Jan. 11-20 by AP reporters around the country -- 66 said donations were down from 2001, 38 said donations were up, and 22 said their financial picture was stable or not yet determined. Some hard-hit charities are laying off employees or leaving vacant posts open; others are considering possible service cutbacks.

Many local chapters of the American Red Cross were among those suffering declines. National vice president Michael Farley said direct-mail donations for most chapters were down more than 20 percent at a time when needs were increasing.

"At the end of the calendar year, you usually see a spike in giving in the holiday season, but this year that spike wasn't as dramatic," Farley said.

United Way donations also were down in La Crosse, Wis., and Tampa.

"We rely on people's generosity but that's one of the things people can eliminate or reduce when they face increased costs in other areas," said the Tampa agency's president, Doug Weber. "The future is not so certain. We might go to war. People are not sure if they'll have a job."

It also was a tough year for several Roman Catholic-affiliated charities, including Baltimore-based Catholic Relief Services and Associated Catholic Charities of Memphis, where the $250,000 intake was about $100,000 below normal.

Catholic Charities in Cleveland, after five years of gains, suffered a 7 percent drop in 2002. Its chief executive, Tom Mullen, blamed the church's sex abuse scandal as well as the troubled economy.

"I certainly believe there are some folks whose trust was eroded with the church," Mullen said.

Donor wariness extended beyond Catholic charities, however. David Gillig, executive director of the San Diego Children's Hospital Foundation, said donors in 2002 were more likely to stipulate how their gift should be used and to request a charity's financial reports.

Said Megan Hansen of the Red Cross of Greater Indianapolis: "There's a decline in the public trust of a lot of institutions, including the nonprofit sectors."

Allegations of mismanagement plagued the Washington-based United Way of the National Capital Area, which has laid off 28 of its 76 full-time employees. It expects donations to drop by a third this year.

There were some clear-cut success stories: United Way of Central Alabama raised $31-million, up 4 percent from 2001; CARE USA's Chicago office, which serves 12 states, raised $2-million, compared with $1.9-million in 2001.

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