In Second Quarter of 2010, Big Charities Struggle to Build on Recovery

America’s biggest charities are on a slow-moving path to recovery from fund-raising losses in 2009, according to a new Chronicle survey of giving in April, May, and June.

Cash giving to big charities in the second three months of 2010 grew by a median of 3.1 percent compared with 2009.

That means that half the charities in the survey achieved a bigger increase than 3.1 percent and half a smaller gain or a decline compared with 2009. The modest rise was a big improvement from what nonprofits saw in the worst part of the recession: Giving in the second quarter of 2009 fell by a median of nearly 18 percent.

However, cash giving this year is not on an upward trend. Donations fell by a median of 1 percent from the first to the second quarter of 2010, weighed down in part by a slowdown in donations for earthquake relief efforts in Haiti, which had attracted millions of dollars in the beginning of the year to groups that work overseas.

Private colleges and universities, on the other hand, felt no such drag, posting a 72.3-percent median increase in donations from the first to the second quarter of 2010. And private colleges accounted for the top three organizations in the survey that saw the biggest jump in actual dollars during that time. Brown University, Cornell University, and the University of Notre Dame each collected at least $36-million more in April, May, and June than they did in the first three months of the year. During the same period, gifts to public instititions dropped by a median 2.5 percent.

Needs Grow

The Chronicle’s quarterly survey offers a bellwether of how donations to all charities are doing because it tracks giving to charities that appear on the Philanthropy 400, the newspaper’s annual tally of the American organizations that raise the most from private sources.

Together, the 91 organizations in The Chronicle’s latest poll raised a total of $2.3-billion in the second quarter of 2010.

Among the 76 groups that also reported second-quarter giving for 2008 and 2009, a total of $1.9-billion was collected, up from $1.8-billion last year but still down from the $2.1-billion in cash gifts in 2008.

“It’s going to be a long recovery,” says Michael Friedman, senior vice president of planned giving and endowment at the Associated: Jewish Community Federation of Baltimore. Especially so, he says, as the demand for many of the social services his group supports, such as aid for the elderly, remains strong.

“We’re all still working off highly depressed numbers from ’08-09, and the need for assistance is not diminishing,” Mr. Friedman says.

That need is high around the country. According to a new study by GuideStar, a Web site that maintains financial data about charities, more than three out of five nonprofit groups say that demand for their services has increased in the first five months of the year. Forty percent of the more than 7,000 groups surveyed also reported a drop in giving from January through May, compared with the same period last year.

Modest Hopes

Still, many charity officials say a turnaround has begun.

Operation Compassion, a Christian relief organization in Cleveland, Tenn., hopes to build on the support it garnered after the Haiti disaster by keeping new donors informed and involved in the charity’s work.

In July, Operation Compassion sent a newsletter to about 600 donors who supported Haiti relief, detailing its work in the country.

Since the disaster, Operation Compassion has sent 176 containers filled with building supplies, tents, and other materials. Its goal is to send a total of 400 containers within the year.

“We’re in it for the long haul, and we hope our donors are, too,” says Tim Burdashaw, Operation Compassion’s head of development and public information.

Because gifts to so many international groups spiked in the wake of the Haiti earthquake, second-quarter fund raising at many of those organizations appear anemic by comparison.

American charities working overseas accounted for six of the 10 groups in The Chronicle’s survey with the biggest drop in cash receipts from the first to the second quarter of 2010. Instead of signaling bad news on the fund-raising front, though, the declines, in most cases, represented a return to more typical fund-raising levels.

Indeed, isolating fund-raising figures for any three-month stretch is likely to capture anomalies—like a one-time major gift—that may skew the true picture of a charity’s position or prospects.

The Children’s Hospital Foundation and Guild Association, in Seattle, reported a decline in giving during the first six months of this year compared with the same period in 2009. But the drop was not a sign of a downturn in the charity’s fortunes, according to Susan Blake, senior director of operations and support services. She wrote in an e-mail that the numbers were a bit off simply because the group had not received any money from bequests in the first half of the year, which is unusual. But, she says, other types of big gifts grew by 35 percent in the first two quarters, and the hospital expects to beat last year’s overall fund-raising totals when its fiscal year wraps in October.

In fact, Ms. Blake says, the hospital is also planning for modest fund-raising increases as it starts to put together its 2011 budget.