Charities’ Election Defections

The contentious presidential race has prompted many donors to redirect their contributions to politics

Janine Kraus, a fund raiser at the Coral Reef Alliance, thought she was about to pull off a major coup this

spring by securing a $35,000 gift — a record amount for the small San Francisco environmental charity. But at the last minute, the donor changed his mind.

“My first priority this year is to elect anyone other than Bush,” the donor told her. “I’ve decided to put my money where my mouth is.”

While the Coral Reef Alliance did wind up with $5,000 from the donor, the remaining $30,000 Ms. Kraus had sought went instead to several political organizations working to unseat the president. In all, the donor has given about $100,000 to support such groups, Ms. Kraus says.

Many fund raisers have found themselves encountering donors just like the one who disappointed Ms. Kraus. Unlike in 2000, when most groups said the presidential race didn’t touch them, charity officials — especially those at advocacy groups for liberal causes — say the contentiousness of the political campaign is quite obvious to them. Strong anti-Bush sentiment and the close vote count of the 2000 presidential election have energized people who didn’t make political donations last time around. Some of those political donors are now telling charities that, rather than give to direct services, they believe their money can have a greater impact this year if used to help elect or defeat those who set government policies that affect the causes they support.

Some charity leaders say they understand such thinking. But many also mourn the loss of funds they might otherwise have received, saying it has put their plans to expand or add new programs on hold. None of the charities interviewed have had to trim programs because of money lost to political groups.

$1-Billion to Campaigns

Because political giving is such a small fraction of charitable giving — the Center for Responsive Politics estimates that a total of about $1-billion will be spent on the presidential race, compared with the $240.7-billion donated to charities last year — the impact of a politically inspired reduction in charitable gifts will probably be slight overall.

But the shift in donations is quite obvious for some causes. Joe Manes, vice president of A.B. Data, a direct-mail company in Washington, says appeals the company designed for gun-control and breast-cancer advocacy groups brought in $4 for every $1 spent last year, but this year are bringing in half that. Meanwhile, A.B. Data’s political mailings to new prospects for Democratic candidates and pro-Democratic political groups (newly organized under Section 527 of the Internal Revenue Code) are breaking records, he says. Although mailings to prospective donors almost always lose money, “we are recruiting donors at a profit on our political candidates. It’s unheard of,” says Mr. Manes.

Concerned about the potential impact of the election year, some charities are trying new strategies. These include redoubling efforts to secure foundation grants, sending out special letters to remind supporters that the charity will be around after the election, and increasing direct-mail or other efforts to attract new donors. Other charities, however, say they aren’t doing anything special, mainly because they are meeting their fund-raising targets this year, thanks to the improving economy, even if some donors are dropping off. And most regard any defections as temporary.

New Options

Some fund raisers say it’s not just the closeness of the last election that is causing changes in giving patterns. They note that the Section 527 fund-raising committees have added a new level of competition to the search for donations.

While contributions to a political campaign from individuals are limited to $2,000 per candidate, individuals can also give to the Democratic and Republican political parties, as well as to politically oriented nonprofit groups.

“It’s not $2,000 to the Kerry campaign or $2,000 to the Bush campaign, it’s the 527 committees that are really soaking the big donors,” says Richard Walden, president of Operation USA, an international relief group in Los Angeles that has felt the negative fund-raising effects of the election. “They’re being asked for $25-, $50-, $100,000 by very skilled political fund raisers who are saying that the future of the free world is in jeopardy, as opposed to a little kid in Africa who really needs this money.”

Mr. Walden says cash donations from individuals to his charity have dropped by 5 percent since last year.

“Our private funding base comes from Hollywood’s entertainment community and they are single-minded about redirecting their giving to political campaigns,” he says.

Other groups say some of their major donors have also cut back because of the election.

Louis A. Clark, executive director of the Government Accountability Project, which helps people blow the whistle on government or business wrongdoing, says the loss of $125,000 that three donors have instead given to election-related efforts has not caused big problems yet because additional foundation grants have made up the difference. But if more donors drop off, the group may be unable to handle new clients, says Mr. Clark. “What we’d probably do is stop taking cases.”

Donors who give small amounts also may be redirecting their giving toward politics. Public Citizen, a Washington consumer-rights advocacy group, says its $35-a-year memberships are suffering.

“Normally, a presidential election year is a very good year for us,” says Lane Brooks, director of development and marketing. Public Citizen’s membership typically grows about 7 percent in election years. Instead, it’s flat this year, after a 40-percent increase last year. While Mr. Brooks says he can’t prove the election is the cause, “there’s no other logical explanation.”

Little Impact for Conservatives

For the most part, conservative groups say they haven’t seen any loss in donations.

“You’d think we would, with hundreds of millions of dollars being sucked out of the system,” says John Berthoud, president of the anti-tax National Taxpayers Union. “But we really haven’t.” Mr. Berthoud says that, in his group’s case, donors tend to distrust both political parties.

The Rev. Louis Sheldon, chairman of the Traditional Values Coalition, a conservative religious group in Anaheim, Calif., says he hasn’t heard from any donors who have stopped giving in favor of political contributions.

“The election year isn’t what impacts us,” he says. “It’s things like Janet Jackson” — referring to the singer’s exposure of her breast on national television. The group, which has an annual budget of $7-million, has seen gifts increase about 5 percent over last year. Part of the increase may be due to the coalition’s opposition to gay marriage.

Some conservative groups say this election year has been particularly good for fund raising. John Von Kannon, vice president and treasurer at the Heritage Foundation, a conservative Washington think tank, says direct-mail gifts have increased to $4.8-million in the first quarter of this year, compared with $4-million a year earlier. Major gifts — those of more than $1,000 — are up to $2.07-million, well over the $1.7-million the group expected. He says Heritage’s major donors tell him they plan to give both to President Bush and to Heritage.

“Last time a man named George Bush ran for re-election, we didn’t do so well,” says Mr. Von Kannon, referring to the 1992 campaign. “There seemed to be a sense then that it didn’t matter who you voted for. This time around, it does matter.”

Bush’s Fund-Raising Record

Political experts point to various reasons Republican-leaning groups may be less affected. For one thing, Mr. Bush has a big financial advantage over Senator Kerry. He had raised a record $214-million compared with Mr. Kerry’s $148-million as of May 31, according to PoliticalMoneyLine, an information service.

Michael Miller, a New York fund-raising consultant who represents national and regional public-policy organizations, has another theory.

“The Democrats are much more dependent on angels and larger individual givers, because the Republicans have done a much better job at grass-roots and direct-mail fund raising,” he says.

One such Democratic “angel” is the billionaire financier and philanthropist George Soros, who tried to encourage more Americans to make election-related contributions when last fall he called the presidential race “a matter of life and death” and announced that he would give millions of dollars to efforts to defeat the president. To date, Mr. Soros has given or pledged $10-million to political groups, including $5-million to America Coming Together, one of the largest Democratic interest groups dedicated to defeating President Bush; $2.6-million to the MoveOn.org Voter Fund, a voter-registration effort; and $3-million to the Center for American Progress, a think tank founded by a former Clinton chief of staff, John Podesta.

Other big donors have followed suit, including Peter Lewis, a Cleveland insurance executive; Steve Kirsch, a California high-technology entrepreneur; Lewis Cullman, a New York businessman; and Anne Bartley, president of the Rockefeller Family Fund, in New York.

What impact such contributions have had on charitable fund raising is much debated. Mr. Soros has said his political gifts have been made from his personal fortune, and that his foundation, the Open Society Institute, is supporting charities at the same pace it did last year.

Mr. Miller says he is skeptical that much money has truly been lost in a shift from charity to politics. While “I’m giving to the election” is an easy excuse for a donor to offer, he says, “I’d believe it about a third of the time.”

Trying Different Tactics

Groups worried about such a shift are trying a variety of approaches to respond. Rainforest Action Network, an environmental group in San Francisco, normally asks for major-gift pledges in the fall. Instead, it sent letters to all of its major donors in April to request that they make their annual pledges then. The letter did not specifically mention the presidential campaign, but it was sent early with the election in mind, says Michael Brune, RAN’s executive director.

Major donors have responded well to the early appeal, Mr. Brune says, in terms of both the number of gifts and the amount donated. As a result, RAN, which normally receives 40 percent of its gifts in the last three weeks of the year, is prepared to weather a less-lucrative December.

Grant Proposals

The Project on Government Oversight, a Washington watchdog group, is writing more grant proposals and increasing its direct-mail appeals, doubling the number of mailings to four from two, says Beth Daley, director of communications.

The group, which attracted $165,000 in gifts from individuals last year, has heard from a “handful” of major donors who won’t give at all or will give substantially less, she says. Ms. Daley says the group has been able to plan ahead because, unlike other groups, it experienced the same thing four years ago. And foundations are showing growing interest in supporting the organization. “This year, we’re probably going to end up finding more sources of revenue than in recent years,” she says.

And many liberal groups see a silver lining: Thanks to the politically charged atmosphere, they expect a growth spurt once the election is over.

“With eight years of Clinton, the progressive donor base shrank, because people weren’t that concerned,” says Morris Dees, co-founder of the Southern Poverty Law Center in Montgomery, Ala. “Now, hopefully, we’ll replenish some of the names.”