Economy's downturn causes nonprofits, including disability organizations, to struggle on with less funding

From the San Antonio Express-News in Texas:

Salvation Army volunteers ringing bells at red kettles usually signal Christmas is around the corner.

But for the first time out of the holiday season, the San Antonio Salvation Army, which turned 120 this year, is bringing out the red kettle to help augment a serious need.

The Salvation Army is dealing with the same challenges that most nonprofit groups here and across the country are facing in this struggling economy. Demand is up, donations are down.

A San Antonio Funders Group survey this month of more than 250 nonprofit groups in the Bexar County area found that most have been seriously or moderately affected by the economy.

Anne Connor, Methodist Healthcare Ministries grants and research manager and survey analyst, said the San Antonio Funders Group began meeting about a year ago.

“In this economy, we were all very concerned with our ability to give,” Connor said. “So we wanted to find out how the nonprofits were coping.”

The survey, in which respondents were anonymous, highlights major problems for nonprofit groups:

-- One third have had to lay off staff.
-- One quarter note a serious impact and two-thirds a moderate impact on their funding stream.
-- 60 percent are postponing expansion.
-- 84 percent have changed their fundraising strategies.
-- Most note a striking increase in demand for services, especially with health and human services organizations.

Examples of struggling San Antonio nonprofit groups are easy to find.

Much like Big Sal, the 7-foot, 3,000-pound red kettle that volunteers are taking around the city with a goal of raising $120,000 by Saturday, the San Antonio Salvation Army's need is massive. The number of people the agency served in March spiked 142 percent over how many it served in the same month last year, to 2,034 from 838. And the agency's donations in the first two quarters of 2009 yielded half of what was raised in the same period last year.

“The need is definitely there. This is a common thread among nonprofits. The need increases, but the financial support decreases,” said Lucy Lashover, spokeswoman for the San Antonio Salvation Army.

Jose Contreras, a senior vice president for United Way, said the 211 help line is the city's barometer for community conditions. Calls for information about rent assistance in the first quarter this year, compared with last year, increased 65 percent, food stamps 98 percent, and gas and electric 94 percent.

“While San Antonio as a whole is somewhat insulated from the wildest economic fluctuations, those living on the margin are most affected,” Contreras said. “We are receiving calls from first-time callers or the newly poor — people laid off or whose hours in full- or part-time jobs were reduced, who have never had to ask for help before.”

Sandi Carlyon, spokeswoman for the United Way of San Antonio and Bexar County, said the agency, which funds more than 60 area nonprofit groups — recently increased its basic safety net services budget by $455,778, for a total of $4.77 million. The agency is gearing up for its annual campaign in October.

“In a challenging economy, it will be imperative to increase participation to meet the myriad of community needs,” Carlyon said.

Eric S. Cooper, executive director of the San Antonio Food Bank, said a dramatic increase in the number of people seeking emergency food assistance has caused his organization to increase its goals in fiscal year 2010 by 20 percent to 40 million pounds of food. So far this year, the food bank has collected 12 percent more food donations compared with last year, but demand has increased 26 percent.

Traci B. Gomez, executive director of The Children's Bereavement Center of South Texas, said her agency is just trying to survive.

“We all have the same story. There's a need to enhance the continuum of services for families in crisis, and there are just more families in crisis now,” Gomez said. “There are more suicides, more violent behavior, more child abuse. In an economic downturn, all the numbers go up. Demand is up for all of us.”

Lynda Alston, CEO and executive director of Child Safe, a nonprofit group that works with sexually abused children, has seen a 13 percent increase in victims this year, compared with last year. The agency began this fiscal year at a loss of almost $250,000 in government grants.

Perhaps suffering the most are the small nonprofit groups that were already strapped before the economic downturn. Spina Bifida Texas, a local group, is working with only three months' worth of funds in its budget. Last year, the two-person staff raised $75,000. This year, the 9-year-old agency, funded privately only, has managed to raise $25,000.

Nora A. Oyler, Spina Bifida Texas executive director, said the agency's golf tournament fundraiser was canceled because of fear that it would lose money instead of make a profit.

“We are trying to find cheaper office or donated space just to run the business,” Oyler said.

Last week, the San Antonio Area Foundation announced $1.8 million in awards to 115 area nonprofit groups. The money was relief to the organizations that were awarded, but there were 336 applications requesting more than $10 million.

In January, Dini Partners, a national nonprofit consulting firm based in Houston, published a survey of 54 major philanthropists, some of them multimillionaires and billionaires, at least seven from San Antonio.

Nearly half predicted that the economy would begin to recover late this year. Most said they would focus their giving this year on agencies they already had relationships with, but that their giving would be reduced.

Still, Dini Partners managing partner David Jones said generous grants are still possible. “We've been surprised at the number of million-dollar-and-above gifts that organizations have received,” Jones said.

Some of those surprises exist in San Antonio.

Haven for Hope has raised nearly $50 million to build a new homeless transition center. And Sunshine Cottage School for Deaf Children has nearly funded its $22 million new school.

But the future doesn't look promising for other capital projects in the next couple of years.

Palmer Moe, managing director of San Antonio's Kronkosky Charitable Foundation, said that because of a decline in its investment values, its investment portfolio has fallen significantly. This year, the foundation expects to award more than $4 million less than last year's $14.7 million in grants.

Said Moe, “Reality is setting in.”