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Charities Struggle

Nonprofits Merge Services, Cut Budgets As Donations Fade

By Susan Campbell

March 13, 2012

Like so many other nonprofits, the budget for Hartford's Loaves and Fishes Ministries Inc. has been frayed by the recession. Individual donors have cut back, as have longtime corporate donors. In response, the organization has cut its budget, cut the executive director's salary, and tried to think creatively.

"We are holding our head above water," said executive director Alyce F. Hild, "but it's really a struggle. We use any angle we can find." The group recently applied for a grant from the Connecticut Health and Educational Facilities Authority, a quasi-governmental agency that helps Connecticut's nonprofits get financing.

Jeffrey Asher, CHEFA executive director, spotted Loaves' application and its modest request of $6,000, which was recently granted, along with about $1 million in other awards that focused on basic needs such as food and shelter.

But that's a bright spot in an otherwise bleak nonprofit landscape. A report from Connecticut Council for Philanthropy released recently says the number of major fundraising campaigns in Fairfield County and in the Hartford and New Haven areas is at its lowest in 10 years, as is the amount of the combined campaign goals. From a high of 85 major campaigns in 2007, this year taps out at 50. A major campaign, in general, is any fundraising goal of $100,000, says Nancy Roberts, council president.

And compare this year's goal of $344 million -- quite a drop from 2002's $1.1 billion. In the Hartford area alone, the report said, roughly 26 organizations are seeking funding of $167.5 million -- nearly 30 percent less than the funding goal from the previous year, which was $240 million.

"Every time we looked at this, we realized there really was an important trend," said Roberts. She said charitable giving tends to lag behind economic downturns. The effects of a recession that started in 2007 would not start to show for a year or more -- as in the case in the council's report. But aren't we supposed to be in a recovery?

"This shows that we haven't recovered as fast," said Roberts. "But I am surprised to see as large a drop as it is. Nonprofits have been talking for a while about how their future life is not going to look like their past."

Foundations are mostly restricting their funds to basic human needs -- and some maintenance to physical plant, said Roberts.

"The challenge for nonprofits is they've used up their reserves, and maybe they're using up their repair and replacement funds," she said. "Who knows what they're dipping into now?"

Lean times for charities means belt-tightening or more. Last month, the council released a report on closures and mergers among nonprofits since 2007. Roberts cautions this is not an extensive list. The council relied on self-reporting, and plans for some of the mergers predated the recession, but the list is impressive. The council counted 48 nonprofit mergers, closures or alliances. Some United Way organizations in the western part of the state merged, as did five Girl Scout councils. Several addiction treatment services merged, as did some youth organizations.

When nonprofits merge, they sometimes contact people like attorney Priya Morganstern of Pro Bono Partnership Inc., though Morgenstern said organizations that are struggling do not generally make good merger partners.

"It's hard enough to merge when both are humming along perfectly," said Morganstern. Struggling organizations are more likely to turn over their assets to a more successful nonprofit, and fade into that structure, she said.

"The good news is that we're doing a lot of mergers and collaborations and it is very exciting," said Morganstern.

Meanwhile, Asher's organization continues to look at basic needs. When the agency put word out that it would be giving grants -- which the economy had briefly put on hold -- 180 organizations submitted letters of interest. Of those, 75 were asked to submit grants, and 23 grants were awarded, with more money going to shelter and food, said Asher.

"I'm really proud of this," said Asher. "I think we really focused on some areas where there is an incredible need. Anything we can do to help."

Meanwhile, back at Loaves, volunteers are serving 130 meals a day, Monday through Friday. The $6,000 is a drop in the bucket, but it is a drop.

To celebrate Loaves and Fishes Ministries Inc.'s 30th anniversary, a benefit concert of the Mozart Requiem will be held at 4 p.m. Sunday, April 1, at Asylum Hill Congregational Church at 814 Asylum Ave., Hartford. The concert will features the church's Sanctuary Choir under the direction of Steve Mitchell, with a full orchestra. Tickets are $20. For more information, call 860-278-0785 or visit www.ahcc.org.