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Outlook Tough for Nonprofits

Basic services like food and shelter for the poor are still receiving support, but arts and culture face cutbacks

By Daniel D'Ambrosio

January 06, 2009

The demand at food banks across Connecticut is up by at least 20 percent while the supply of food is up only a fraction of that amount, says Gloria McAdam, president and chief executive officer of Foodshare, a distribution center in Bloomfield servicing food pantries in Hartford and Tolland counties. A similar distribution center in East Haven serves the rest of the state.

"Enfield said demand has doubled," McAdam said. "Manchester is up 50 percent. Even Gifts of Love in Avon has reported a 14 percent increase in demand."

And while donations to Foodshare remain strong, McAdam points out that the distribution center has always scrambled to keep up with demand, even before the bottom fell out of the economy.

"We never have met all of the needs," she said. "A year ago we were meeting about one-third to one-half of the need. Donations have grown by 5 percent but with demand growing by 20 percent, we're falling behind."

Foodshare moves a tractor-trailer full of food to food banks every day, getting 80 percent of its supply from food-company donations. The remaining 20 percent comes mostly from state and federal commodities programs, with a "small amount" coming from food drives.

"We're here all year long, mostly working with food companies to help them solve their own inventory problems," says McAdam. "If food is damaged, test-marketed or just surplus they can donate it to us as an alternative to throwing it away."

So far financial donations to support Foodshare's $3-million annual budget and pay its 30 employees have held steady. The organization is entirely supported by private funds along with a mixture of grants from corporations and foundations and a few churches.

McAdam says it has been her experience over 24 years that donations to organizations meeting basic needs hold up well even in bad times. But that's not necessarily what Connecticut nonprofits in other sectors of the industry are seeing.

A recent survey by the Connecticut Council for Philanthropy found that 53 percent of its members expected to decrease their grantmaking budgets in 2009. Individual donors are also expected to pull back.

"Donors have lost money personally, and somewhere between 82 and 85 percent of overall donations comes from individuals," said Nancy Roberts, president of the council. "Foundation-giving is somewhere around 10 to 12 percent, and 4 to 5 percent is corporate. A lot of money comes from individuals."

Total charitable giving in Connecticut for 2006, the most recent year for which numbers are available, was $2.8 billion from individuals and $710 million from private and corporate foundations for a total of about $3.5 billion. The economic meltdown has reduced the assets of both individuals and foundations by 25 to 33 percent, says Roberts, but because of the lag in reporting, "we won't begin to see how it has affected [donations] for some time."

Ron Cretaro, president of the Connecticut Nonprofit Associations, said another worrying factor for nonprofits is the state budget, which is still up in the air, but is facing a $6 billion deficit over the next couple of years. Then, in the Hartford area, there's the stiff competition from the education community.

"The Hartford Board of Education has started an educational foundation, and a number of key corporations are looking to put more dollars there this year with the limited amount of dollars they have," said Cretaro.

The shift to supporting education could end up hurting nonprofits in the arts and human and social services, which perceive the shift as coming at their expense, according to Cretaro.

"There's a little bit of tension," he said.

Cretaro plans to do a survey soon of a group of development directors in Connecticut nonprofits big enough to have such positions to get a reading on how fundraising is going so far. But he's already more concerned about smaller nonprofits that rely on individual donations not being able to weather the economic storm than he is about larger organizations that benefit from corporate and foundation giving.

"The larger nonprofits I don't see going out of business as much as losing programs and not being able to function effectively, which could ultimately lead to their demise," said Cretaro.

Roberts says funders understand the threat to nonprofits the current economic downturn represents, which is why many of them are adjusting their methods.

"Many of the funders said they were going to focus some grantmaking to support the operating budgets of nonprofits and release restrictions on money they had already given," said Roberts.

Roberts points out that the Hartford Foundation for Public Giving, for example, has doubled its gift for nonprofits addressing basic human needs — homeless shelters and food banks — from $500,000 to $1 million.

At the Foodshare distribution center, McAdam says there are ways beyond money to help her organization make it through the economic storm. Foodshare already gets help from some 2,500 volunteers over the course of a year, but they could use more help.

"Our biggest need is always for people who can come during the day on weekdays to sort or repack food items," said McAdam.

Foodshare also has a facility at the Connecticut Regional Market in Hartford where they receive bulk donations of fresh produce getting near the end of its usable life. The organization needs volunteers to throw out the marginal produce and repack the good stuff in family-size bags for distribution. The operation goes on six days a week.

"We have no problem filling the Saturday slot, but people feeling they want to help who can't write a big check could help us out a lot by coming during the week," said McAdam.

You can call Foodshare at (860) 286-9999 to volunteer.