February 26, 2009 | Read Time: 3 minutes
Economic woes have put a big damper on fund raising for many charities, but experts say there is still room for optimism. Among the reasons:
More people are giving
Numerous charities report that bigger numbers of donors are making gifts, albeit in smaller sums than were given in the past. Says Madeline Stanionis, a San Francisco consultant who recently reviewed contributions to her charity clients: “For every one of our clients, we saw higher numbers of donors at lower average gifts, so many more people are giving. If that is not cause for optimism, I don’t know what is.”
Charities are getting visibility
More and more journalists have been writing and broadcasting stories about the plight of nonprofit groups. “The news media is focusing on nonprofits like they never have before,” says Gail Perry, a Raleigh, N.C., fund-raising consultant. As a result, she adds, “the general public is more tuned into the needs of charities.”
Donors are making unusual gifts
Some fund raisers say that they have seen a spike in unusual gifts such as real estate or shares in privately held businesses.
Bryan Clontz, president of Charitable Solutions, an Atlanta company, says that he has received numerous calls from nonprofit organizations and financial advisers who have donors who want to contribute their interest in gas or oil partnerships. Charities that accept such gifts, he notes, either earn what the donor was getting from the shares or sell them. The shares have in some cases been worth several million dollars.
Bill Sturtevant, president of the University of Illinois Foundation, says that his institution has seen “an uptick in real-estate gifts” because of the economy.
In some cases, donors have paid off their mortgages and are interested in selling their properties. But given how much values have declined in the current real-estate market, they decide it would take too much time and effort to sell the property at the price they want, he says. In other cases a donor’s house has kept its value, but the person chooses to donate it instead of taking on the hassle of selling it.
Tax changes may prompt new gifts
A new law on the estate tax expected this year could bode well for charities, says Conrad Teitell, a Stamford, Conn., tax lawyer.
President Obama supports retaining the federal estate tax, which was scheduled to disappear in 2010, he notes. Given the state of the economy, Mr. Teitell and other experts believe that Congress will act this year to maintain it. “Whenever there is a change in estate, gift, or income tax law, people have to sit down and change their plans,” Mr. Teitell says. “Many people will be sitting down with their advisers, and there are often charitable decisions made when people redo their plans. This is an opportunity.”
Parts of the economy are thriving
Health care, utilities, food manufacturing, software engineering, and other industries have held their own through the recession and are expected to grow over the next few years.
In New York, the United Jewish Appeal-Jewish Federation of Jewish Philanthropies has traditionally relied heavily on the financial industry, but now “the first thing we are saying is, Who and where are the individuals who have done well?” says Stuart Tauber, the federation’s senior vice president of financial development resources. “The answer is to look at segments we haven’t looked at that closely before.”
