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Economic Crunch Hits Downtown Nonprofits
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| Gregory C. Scott, president and CEO of Skid Row's Weingart Center, which has had to cancel a major November fundraiser because of a lack of corporate support. Photo by Gary Leonard. |
Skid Row Organizations See Donation Drops of Up to 25%; Some Events Are Canceled
by Richard Guzman
DOWNTOWN LOS ANGELES - Andy Bales has seen a lot of hard times during his years as CEO of the Union Rescue Mission. But now, the organization that for more than a century has helped those down on their luck is in need of desperate help of its own.
"We're down about 25% over our normal donations, so we're barely hanging in there," Bales said. "I've never seen it this bad."
As the national economic crisis worsens, and as companies large and small lay off workers and individuals tighten their spending, a less obvious impact is that charitable donations are starting to slow. In Downtown Los Angeles some nonprofit agencies, and in particular organizations that work with the homeless, are already feeling a devastating decrease in donations. Others, including some nonprofits in the arts, are beginning to prepare for a tough road ahead.
The URM is the clearest example of the trouble facing charities. The Skid Row-based nonprofit, located at 545 S. San Pedro St., serves more than 700,000 meals a year and can house nearly 1,000 people a night. It relies mainly on support from individuals for its $15 million annual budget.
That support began to dwindle in July and continues to drop monthly, Bales said, while demand for services from people who have been left homeless has greatly increased in the same period.
"We're actually increasing our services because of the need, and that's compounding our challenge," Bales said. "We've opened a floor we used to use for volunteers that's now used for families. We've been doing a lot of praying and stretching of resources."
The Mission has even had to sell property to make ends meet. It is in the process of selling a 24,000-square-foot parking lot and small building at 505 S. San Pedro St. to the SRO Housing Corporation for about $4.5 million. "That will actually help carry us through this challenging time," Bales said.
However, the situation may get worse. Bales estimates that next year the mission will need about $19 million in donations to continue to operate.
"It's the worst it's ever been in my 23 years working in nonprofits," he said.
Others in Skid Row express the same woes. Gregory C. Scott, president and CEO of the Weingart Center, said individual donations are down about 15-20% at the organization that houses about 600 homeless residents and helps 2,500 people annually find jobs. Scott said a program to help people find permanent homes will be canceled in December and City Live, a fundraising event scheduled for November that has been going for 17 years, was canceled due to lack of sponsor support.
"A lot of the companies that usually sponsor us were just not able to pull out those donations this year, and it's a ripple effect," he said. "The people we do get donations from are donating less because the economy has affected them as well, and because the economy has become the way it is, the need for our service increases, but we have less resources."
Scott said about 15% of the Center's $13 million annual budget comes from individual donations, with about $375,000 usually raised at the City Live event. The rest of the budget for the organization at 566 S. San Pedro St. comes from government grants, which are also decreasing due to cutbacks, Scott said.
"I think it's going to be an 18-month to two-year period where all nonprofits across the country are going to really have to be more strategic about the types of programs we do and the way we go about doing our fundraising," he said.
Waiting for It
Not every nonprofit has been hit hard. But many of those that are keeping steady are bracing for a future crunch, said Chad Ewell, communications and training manager for the Center for Nonprofit Management, a Downtown-based consultant for nonprofit agencies.
"Most are expecting [a downturn]. They just haven't seen it at the moment," he said.
Ewell said that since most private foundations base their giving on endowments, and endowments are invested in the stock market, charitable organizations will likely start feeling the impact at the beginning of 2009.
Jim Royce, director of marketing and communications for the Center Theatre Group, said the organization that operates the Ahmanson Theatre and Mark Taper Forum in Downtown (and another venue in Culver City) has yet to feel the crunch, and although confident about future ticket sales and CTG's economic health, he does expect to see the effects in 2009.
Fundraising accounts for about 40% of CTG's annual $40 million budget, with much of the rest coming from ticket sales. Last week CTG announced that it will sell 100,000 $20 tickets to shows at its three theaters throughout the season, a 262% increase over the number of $20 tickets it previously sold.
"We will probably see a 10% drop in corporate contributions," Royce said. "Our biggest area of concern is our individual donors; we have thousands of those. We're currently not seeing huge drops, but we'll see."
Inner-City Arts, which offers arts education to at-risk children, and which just completed a $10 million expansion at 720 Kohler St. on Skid Row, is also preparing for future belt-tightening. Cynthia Harnisch, president and CEO of the organization, is worried about a December fundraiser - it usually raises about $500,000 of the organization's $2.2 million annual budget.
"We're very dependent on those fundraisers," she said. "And we're very concerned about it because I'm hearing from other charities they're having great difficulties in that area."
Tough Choices
That concern is warranted, said Renata Rafferty, a charity consultant and member of the advisory board of the National Philanthropic Trust.
"Thanksgiving and the end of the year is when the majority of contributions come to charities. I think there is going to be a stunned recognition right after the first of the year that, 'Oh my gosh, we didn't get what we expected,'" she said.
She said many organizations may have to make the difficult choice of whether to cut back services or help fewer people.
Bales is working hard to try to avoid having to make that decision. He has been working the phones, emailing donors and calling wealthy contacts, all in hopes of keeping the century-old Mission alive and the people it helps clothed and fed.
"We've been here 118 years," he said. "When the Depression hit, the Union Rescue Mission served 50% of the hungry people in L.A. So if our forefathers figured out a way to make it through the Depression, we're going to have to do the same."
Contact Richard Guzman at richard@downtownnews.com.
page 1, 10/27/2008
© Los Angeles Downtown News. Reprinting items retrieved from the archives are for personal use only. They may not be reproduced or retransmitted without permission of the Los Angeles Downtown News. If you would like to re-distribute anything from the Los Angeles Downtown News Archives, please call our permissions department at (213) 481-1448.
"We're down about 25% over our normal donations, so we're barely hanging in there," Bales said. "I've never seen it this bad."
As the national economic crisis worsens, and as companies large and small lay off workers and individuals tighten their spending, a less obvious impact is that charitable donations are starting to slow. In Downtown Los Angeles some nonprofit agencies, and in particular organizations that work with the homeless, are already feeling a devastating decrease in donations. Others, including some nonprofits in the arts, are beginning to prepare for a tough road ahead.
The URM is the clearest example of the trouble facing charities. The Skid Row-based nonprofit, located at 545 S. San Pedro St., serves more than 700,000 meals a year and can house nearly 1,000 people a night. It relies mainly on support from individuals for its $15 million annual budget.
That support began to dwindle in July and continues to drop monthly, Bales said, while demand for services from people who have been left homeless has greatly increased in the same period.
"We're actually increasing our services because of the need, and that's compounding our challenge," Bales said. "We've opened a floor we used to use for volunteers that's now used for families. We've been doing a lot of praying and stretching of resources."
The Mission has even had to sell property to make ends meet. It is in the process of selling a 24,000-square-foot parking lot and small building at 505 S. San Pedro St. to the SRO Housing Corporation for about $4.5 million. "That will actually help carry us through this challenging time," Bales said.
However, the situation may get worse. Bales estimates that next year the mission will need about $19 million in donations to continue to operate.
"It's the worst it's ever been in my 23 years working in nonprofits," he said.
Others in Skid Row express the same woes. Gregory C. Scott, president and CEO of the Weingart Center, said individual donations are down about 15-20% at the organization that houses about 600 homeless residents and helps 2,500 people annually find jobs. Scott said a program to help people find permanent homes will be canceled in December and City Live, a fundraising event scheduled for November that has been going for 17 years, was canceled due to lack of sponsor support.
"A lot of the companies that usually sponsor us were just not able to pull out those donations this year, and it's a ripple effect," he said. "The people we do get donations from are donating less because the economy has affected them as well, and because the economy has become the way it is, the need for our service increases, but we have less resources."
Scott said about 15% of the Center's $13 million annual budget comes from individual donations, with about $375,000 usually raised at the City Live event. The rest of the budget for the organization at 566 S. San Pedro St. comes from government grants, which are also decreasing due to cutbacks, Scott said.
"I think it's going to be an 18-month to two-year period where all nonprofits across the country are going to really have to be more strategic about the types of programs we do and the way we go about doing our fundraising," he said.
Not every nonprofit has been hit hard. But many of those that are keeping steady are bracing for a future crunch, said Chad Ewell, communications and training manager for the Center for Nonprofit Management, a Downtown-based consultant for nonprofit agencies.
"Most are expecting [a downturn]. They just haven't seen it at the moment," he said.
Ewell said that since most private foundations base their giving on endowments, and endowments are invested in the stock market, charitable organizations will likely start feeling the impact at the beginning of 2009.
Jim Royce, director of marketing and communications for the Center Theatre Group, said the organization that operates the Ahmanson Theatre and Mark Taper Forum in Downtown (and another venue in Culver City) has yet to feel the crunch, and although confident about future ticket sales and CTG's economic health, he does expect to see the effects in 2009.
Fundraising accounts for about 40% of CTG's annual $40 million budget, with much of the rest coming from ticket sales. Last week CTG announced that it will sell 100,000 $20 tickets to shows at its three theaters throughout the season, a 262% increase over the number of $20 tickets it previously sold.
"We will probably see a 10% drop in corporate contributions," Royce said. "Our biggest area of concern is our individual donors; we have thousands of those. We're currently not seeing huge drops, but we'll see."
Inner-City Arts, which offers arts education to at-risk children, and which just completed a $10 million expansion at 720 Kohler St. on Skid Row, is also preparing for future belt-tightening. Cynthia Harnisch, president and CEO of the organization, is worried about a December fundraiser - it usually raises about $500,000 of the organization's $2.2 million annual budget.
"We're very dependent on those fundraisers," she said. "And we're very concerned about it because I'm hearing from other charities they're having great difficulties in that area."
That concern is warranted, said Renata Rafferty, a charity consultant and member of the advisory board of the National Philanthropic Trust.
"Thanksgiving and the end of the year is when the majority of contributions come to charities. I think there is going to be a stunned recognition right after the first of the year that, 'Oh my gosh, we didn't get what we expected,'" she said.
She said many organizations may have to make the difficult choice of whether to cut back services or help fewer people.
Bales is working hard to try to avoid having to make that decision. He has been working the phones, emailing donors and calling wealthy contacts, all in hopes of keeping the century-old Mission alive and the people it helps clothed and fed.
"We've been here 118 years," he said. "When the Depression hit, the Union Rescue Mission served 50% of the hungry people in L.A. So if our forefathers figured out a way to make it through the Depression, we're going to have to do the same."
Contact Richard Guzman at richard@downtownnews.com.
page 1, 10/27/2008
© Los Angeles Downtown News. Reprinting items retrieved from the archives are for personal use only. They may not be reproduced or retransmitted without permission of the Los Angeles Downtown News. If you would like to re-distribute anything from the Los Angeles Downtown News Archives, please call our permissions department at (213) 481-1448.
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