Paying the Price

High gas and utility costs prompt changes at some charities

For the American Society for the Prevention of Cruelty to Animals, in New York, high gas prices in recent months were a matter of life or death. Literally.

As autumn approached, the charity learned that soaring prices were causing the city to run out of money to transport animals from its shelter to about 100 nonprofit animal shelters. The potential result: Healthy dogs and cats that typically would be delivered to shelters and offered for adoption would go unclaimed, and thus never make it out of the city shelter alive.

The animal-welfare group quickly decided to give $10,000 to the Mayor’s Alliance for NYC’s Animals to keep the vans moving — and made a plea to New Yorkers to match that sum. Over the next few weeks, donations topped $27,000. The charity ultimately contributed more than $37,000 to help keep the van system and the animals alive.

Challenges like the one in New York have played out all over the country in recent months as nonprofit organizations have grappled with record-breaking fuel prices. The impact has been felt by charities, the volunteers they enlist, and the clients they serve.

With winter approaching, nonprofit organizations have recently seen some welcome relief from the high gas and utility prices that strained budgets earlier in the year.

Will Rates Rise Again?

But that isn’t the case everywhere. Some regional electric and gas utility companies have already enacted rate increases that will require customers to continue to pay high rates comparable to last winter.

Charities in some parts of the country are feeling the squeeze. For example, several nonprofit performing-arts organizations in Galesburg, Ill., may not be able to afford to use the historic Orpheum Theatre in the coming year. As utility costs have risen, the theater has said it now needs to charge $981 per day to rent the facility, compared with $865 per day last year.

And Americans in all regions worry that the current dip in gas and utility prices is short-lived.

For many nonprofit organizations, the hefty bills have prompted a lasting change in the way they operate.

“A crisis like this forces you to innovate,” says Enid Borden, chief executive of Meals on Wheels Association of America, in Alexandria, Va. “Out of bad can come good. We’re looking at everything we do, particularly our whole delivery mechanism.”

A ‘Double Whammy’

Currently, Meals on Wheels relies heavily on volunteers, who drive meals to those in need.

Because many of the volunteers are elderly and live on fixed incomes, Ms. Borden says, high gas prices were a “double whammy” over the summer as many volunteers struggled to pay their own bills and also gas up for deliveries. Across the country, Ms. Borden says, some volunteers simply quit their work for Meals on Wheels affiliates, saying they couldn’t afford to fill their tanks.

To make up for the reduced number of volunteers — and lessen the burden for those still on the job — many local Meals and Wheels started “bundling.” Instead of making five deliveries a week, volunteers now deliver five frozen meals on Monday. Routes were also remapped so volunteers could make several stops over the course of a few hours.

Ms. Borden said those steps reduced the time volunteers can spend giving clients much-needed social contact and hampered the socialization aspect of volunteer visits, but allows the organization to continue achieving its core mission of feeding those in need.

Some local Meals on Wheels chapters have held fund-raising events specifically to cover fuel costs; sometimes individuals or corporate donors give gift cards so volunteers can fill their tanks.

As the organization moves forward, Meals on Wheels is looking for ways to diversify its volunteer force so it is not so dependent on older people on fixed incomes who are more sensitive to rising gas prices. The organization says it cannot afford to subsidize the gas costs for all of its volunteers.

“We’d love to, but where would we get the money?” she says. “The money we raise goes to food, not to gas.”

No Idling

Food pantries, which need to transport truckloads of groceries on a daily basis — and store those groceries in cavernous warehouses — are especially hard hit when fuel prices rise.

The Capital Area Food Bank of Texas, in Austin, said its costs were rising so fast it would need to either raise more money or cut services. Reducing services was not attractive, particularly because the 32,000 people it serves weekly often face the choice of whether to buy gas or food.

The food bank, which last year had a budget of $4.8-million, produced public-service announcements and lobbied corporate donors about pressing needs created by high gas prices. The result: A local semiconductor company, Freescale, announced this month that it would pay the food bank’s entire gas bill for the coming year, about $70,000.

Michael Guerra, the charity’s chief operating officer, and Freescale officials announced the donation at a news conference where they filled the tanks of one of the charity’s delivery trucks.

“By doing this they were able to get some reach in their community with their own brand name, and we received a gift that will allow us to focus on our mission,” Mr. Guerra says. “It’s a tremendous relief knowing our current fleet is covered for the coming year.”

Meanwhile, at the Regional Food Bank of Oklahoma, in Oklahoma City, much of the focus has been on finding ways to reduce fuel consumption.

Rodney Bivens, executive director of the group, says that every time gas rises a penny per gallon, the charity has to spend $650 more a day to carry out its mission, which is to serve needy people in a 50,000-square-mile radius.

For the 2007 fiscal year, the Food Bank, which has an annual budget of $5.5-million, expects to spend more than $100,000 for gas, a figure that has more than tripled in the last four years.

“Some of that is due to increase in service, but clearly more than 50 percent is attributed to higher gas prices,” Mr. Bivens says. “We have made a conscious effort not to cut back on service because of this. We know there are people out there who don’t have enough food, and it’s our obligation to meet their needs.”

To conserve gas, drivers are no longer allowed to leave their trucks idling while making deliveries, and the organization has dropped its recommended speed limit for drivers from 65 miles per hour to 55. The group is considering installing devices that would prohibit trucks from going over a certain speed.

For other nonprofit organizations, it has been high utility bills that have stretched finances.

Lisa Frigand, manager of economic development and special adviser to the arts for the utility company Con Edison, in New York, says there are no easy solutions for cash-strapped organizations because utility rates are government-regulated.

“It’s tough because there is not a nonprofit rate,” she says. “We don’t have the freedom to simply give a nonprofit a rate reduction. It’s been hard to find solutions, short of conservation efforts.”

So Ms. Frigand, who also serves as a board member for the Alliance of Resident Theatres/New York, has done just that, advising theater operators on how to conserve energy. She has also suggested that several theaters team up to seek a bulk rate on utilities, but does not know of any theaters that have done so yet.

The Children’s Museum of Eastern Oregon, in Pendleton, is running a deficit — and high utility bills over the past year are a major culprit, says Patty Rose, the museum’s executive director. The museum recently purchased new, fuel-efficient heating and cooling units for the building that houses the exhibits and activity centers geared toward young children.

“If we hadn’t got the new system, we probably wouldn’t be open any more,” says Ms. Rose. “The bills from the old system were absolutely terrible.”

Even so, the museum, with an annual operating budget of $86,000, pays on average $600 a month in electric and natural-gas bills, Ms. Rose says. She hopes that lower utility rates this winter will lessen the burden.

“It’s a major expense, but it’s also a necessity,” Ms. Rose says. “We’re paying more attention to turning off lights and turning down the heat when we can.”

High utility bills have been particularly challenging for social-service groups, like homeless shelters, that maintain several buildings.

Gas and electric costs soared $116,000 over budget at the Denver Rescue Mission last year, says Kevin Mann, vice president for finance and administration. The mission operates five shelters, including a 97,000-square-foot refurbished hotel. All together, the charity, which runs on an annual operating budget of $20-million, houses nearly 800 men, women, and children.

This year, the mission is increasing its allotment for utilities to $587,000, from last year’s insufficient $364,000.

“Fortunately, we’ve been able to absorb the increases so far,” says Mr. Mann. But, he notes, “it has an effect on the number of caseworkers we can hire, the supplies we can buy, and the education programs we can offer.”

Mr. Mann says the charity focused on conservation over the last year, replacing old lighting with more fuel-efficient fixtures, and caulking and sealing windows and doors. Still, he views utility costs as largely fixed: “When you are an organization like ours, serving the poor and the homeless directly, it’s not like you can turn out the lights.”

Relying on Teamwork

Other nonprofit organizations are collaborating with local philanthropic groups to raise money to cover fuel costs. In Fayetteville, Ark., participants in the Bikes, Blues & BBQ festival donated $5,000 to help offset transportation costs for Children’s House, a nonprofit organization that serves neglected or abused children.

Children’s House, which runs on an annual budget of $375,000, operates a bus that picks up 22 children daily in the region, says Terri Teters, education and volunteer coordinator.

“Gas prices have gone down a little bit now, but we know it’s going to be a roller coaster moving forward,” Mrs. Teters says. “It’s affected everything we do. When we have to pay more for gas, it draws from our other programming. And because we run a confidential program, public transportation is not an option.”

Still other charities have tapped reserves to cover fuel costs. The American Kidney Fund, in Rockville, Md., has seen a “huge increase” in requests for money to pay for gasoline for people on dialysis or those who drive them regularly for treatments, says Carol Lynn Halal, managing director for programs.

The charity provides $175 to needy people twice yearly. Requests for gas money went from 50 percent of all requests for aid to 85 percent of the $3.1-million budgeted in 2006 to help patients deal with transportation needs. The organization’s board agreed to dip into the charity’s savings to earmark an additional $75,000 for gas grants. And next year, the budget will increase as well.

“We’re hopeful, because we are seeing a bit of relief at the pump relative to the last year,” says Ms. Halal. “But gas prices are still high. People are still feeling the pinch, and it has a ripple effect.”