Posted on August 12, 2002

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Charities Facing Fundraising Shortfalls Try New Ways to Raise Money

The shaky economy and declining stock values have caused organizations and individuals to scale back charitable donations across the country, prompting nonprofits to find new ways to raise funds to further their missions, the Christian Science Monitor reports.

According to the American Association of Fundraising Consultants, total giving fell 2.3 percent last year, the first drop since 1993. The organization also reports that corporate donors have cut charitable giving by 14.5 percent.

Many groups are coping with the downturn by delaying or abandoning new programs, cutting back on some services, and laying off staff, according to Diane Baillargeon, an executive vice president at Seedco, a New York City-based organization that provides interest-free loans to nonprofits. "We've seen a dramatic increase in the number of stressed nonprofits," Baillargeon told the Monitor. "It's a tough economy, with government funds drying up and individuals reluctant to give. Arts programs have been truly hard hit, but even the direct human services programs have seen dollars decrease."

In addition to trimming expenses, some nonprofits are starting for-profit ventures to raise money. The CityKids Foundation, for example, relies on a business venture for as much as 10 percent of its revenue. Since 1995 the nonprofit has produced and marketed a video on pregnancy prevention, which it sells mainly to other nonprofits, and it's currently working to expand its product line by developing more educational materials and videos.

Other organizations are helping nonprofits save money through in-kind donation programs that collect free or discounted equipment and supplies. The United Way of Metropolitan Atlanta recently started such a program and hopes that its offer of free office supplies and computers to area nonprofits will lessen the impact of fewer contributions.

"Nonprofits are seeing just how valuable their assets are and are creating 'social-purpose business programs' to earn income from them," said Seedco's Baillargeon. "More and more, they're treating services like businesses."

Hall, Jeremiah. “Charities, Still Reeling, Try Some New Tacks.” Christian Science Monitor 8/05/02.

Primary Subject: Philanthropy and Voluntarism

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