AEGiS-WSJ: Not-for-Profits Tread Carefully Charitable Organizations Not Part of Tsunami Relief Worry About Fund Raising

Important note: Information in this article was accurate in 2005. The state of the art may have changed since the publication date.

Not-for-Profits Tread Carefully Charitable Organizations Not Part of Tsunami Relief Worry About Fund Raising

Wall Street Journal - January 6, 2005
Elizabeth Bernstein at elizabeth.bernstein@wsj.com and Rachel Emma Silverman at rachel.silverman@wsj.com

Even as Americans demonstrate immense generosity in helping the victims of the tsunamis in South and Southeast Asia, some not-for-profit organizations with no connection to the relief effort are worried that their donations will suffer as people redirect funds to the current crisis.

Since Dec. 26, some $200 million has poured into U.S. disaster-relief organizations, much of it specifically designated for tsunami victims.

Across the country charitable organizations are reassessing their fund-raising efforts to make sure they aren't overlooked. The most vulnerable nonprofit groups are ones that also focus on people in need, such as food pantries, homeless shelters, advocacy groups and child-care service providers, says Daniel Borochoff, president of the American Institute of Philanthropy, a charity watchdog group based in Chicago. "Their backs are up against the wall now," he says.

Too Early to Tell

While most charitable organizations say it is too early to tell what impact the outpouring of tsunami aid will have on their fund raising, some are already seeing a slowdown in donations. At City Harvest, a hunger-relief organization in New York, direct-mail donations from individuals in the last week of December were down 21% over the same period in 2003. Now, the charity says, it is making "contingency plans," including revamping a newsletter that is set to be mailed out next week.

Tuesday, the president and CEO of the Leukemia and Lymphoma Society, Dwayne Howell, sent a letter to his staff and board members, cautioning them to be "extraordinarily sensitive" in dealing with potential donors.

Mr. Howell warned of donors "who are conflicted or questioning raising funds for the Society at this time rather than donating to the relief efforts. If this occurs, it will be important to convey that you are sensitive to their concerns but the Society's mission is still vitally important."

The leukemia society says that while Internet donations in December went up, they grew at a slower pace than the same time a year earlier. In December 2004 online donations increased 38% compared with a year earlier, while in December 2003 the growth was 77% over the same period in 2002. "We're very happy with 38% growth, but I would say that we have felt an impact," says Nancy Klein, a spokeswoman, adding that there is no way to know whether the slower growth rate was directly related to the tsunami-relief donations.

'Very Deliberate Decisions'

Kathleen King, vice president for development for Volunteers of America, the national social-services provider, says that soon after the disaster happened, executives at the charity "kicked into gear and got our heads together and made some very deliberate decisions around this very important issue."

Ms. King says the charity plans to soon put a message on its Web site recognizing the "horrendous disaster that has taken place" but also reminding donors that "we have some very pressing and important issues in the U.S." The group has no plans to change its direct-mail appeals.

Even some disaster-aid organizations say they are concerned that the outpouring of aid for tsunami victims will divert funds from their other efforts. For now, Doctors Without Borders has stopped accepting funds designated for tsunami relief. "We've asked people to give unearmarked donations so we can answer the needs in South Asia and in the 70 other countries we work in around the world," says Kris Torgeson, a spokesperson.

InterAction, a consortium of international relief charities, says that it is keeping its members updated about other crises and relief efforts, including in Sudan and Northern Uganda, in addition to the tsunami disaster. "There are ongoing crises in at least 20 countries all over the world," says Mary McClymont, chief executive of InterAction.

Many not-for-profit organizations are acknowledging the tsunami disaster when communicating with donors -- and some are even contributing funds. The Art Gallery of Ontario in Toronto is donating the proceeds of its admissions next Wednesday, which should be about $10,000, to the Canadian Red Cross.

Broadway Cares/Equity Fights AIDS made a $100,000 donation to Unicef to help tsunami victims. "The good feeling and the good karma that is created by extending ourselves in this way only helps us secure fund raising in the future," says Tom Viola, the group's executive director.

The concerns by non-tsunami related charities aren't without precedent. Soon after Sept. 11, a number of nonrelief-related charities reported decreased donations. But many groups made up for it by year's end. Gifts made to relief and recovery efforts after Sept. 11 were estimated to comprise less than 1% of total giving for that year, according to the annual "Giving USA" report published by the American Association of Fundraising Counsel Trust for Philanthropy.

In general charitable donations are chiefly affected by the broader economy and Wall Street's performance. In addition, some not-for-profit organizations say their fund raising last year was adversely affected by the elections, because so many people made donations to political campaigns.

Late December is a particularly sensitive time in the fund-raising season. The period between Thanksgiving and New Year's is a key fund-raising period for many charities. Although statistics are hard to come by, some nonprofits say they receive more than half of their contributions in December, as donors scramble for year-end tax deductions or are inspired by more spiritual or altruistic entreaties to give.

Before the tsunami hit, many charities were on their way to a better year than 2003, largely thanks to the improving economy. In the first nine months of 2004, some 50% of charities surveyed said contributions had increased, according to an October poll of about 3,770 charities by GuideStar, a clearinghouse for information on nonprofit organizations. In 2003, only 39% reported that contributions had increased in the same period.

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