On the eve of what is traditionally the giving season, local charities find themselves hoping for the best, but bracing for the worst.
A volatile stock market, coupled with an uncertain economy and the possibility of the country going to war, have already begun to impact local charitable donations according to some non-profits.
The result is a grim forecast for end-of-year giving in a state that already ranks 47 out of 50 in generosity.
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“There is a lot of talk going on nationally, regionally, and locally,” said Susan Kostas, director of Giving Rhode Island, a non-profit organization charged with increasing awareness of charitable giving in the state. “The talk is that last year was hard and this year will be as well. We haven’t done any official surveys, but from what I can gather organized giving programs are definitely being affected.”
Janet Marcantonio, president of the Financial Planning Association of Rhode Island, doesn’t expect it to get much better.
“People are still trying to manage their losses,” she said.
The Rhode Island Food Bank is already feeling the impact. The organization had expected to raise $52,000 from its summer appeal, but instead raised only $37,500. It’s a 28 percent drop that Executive Director Bernie Beaudreau said couldn’t come at a worse time.
“We have seen needs increase 16 percent in the numbers of people that we are serving through our network, and yet donations are down,” he said. “It’s definitely making me nervous.”
According to Dennis Murphy, executive director of the United Way of Rhode Island, the keys to increasing donations are education and awareness.
“People want tangible evidence that something has changed for the better as a result of their donation,” he said. “We strongly believe that if we show people that we give value to the dollar that they will invest. The same is true for our corporate clients. We are finding that a lot of them are cautious about their short-term future, but still want to invest in something that relates to their own mission.”
One of United Way’s more popular programs, he said is a philanthropy account which today is used by more than 1,250 people. The account works much like a donor-advised fund by allowing people to decide when and how they want their donations spent. What’s more, Murphy said, people can contribute to the account using a payment plan, instead of waiting until the end of the year.
That’s the message he sends when visiting the nearly 1,000 local companies whose employees are involved in a United Way giving plan.
But even Murphy admits the message could be clouded this year.
“There is no doubt that this is going to be a challenging year,” he said. Murphy points to last year as an example. After the Sept. 11 terrorists attacks, donations dropped significantly, yet the organization was still able to raise $2.5 million for the year — a 2.5 percent increase over the previous year.
Beaudreau echoed Murphy’s optimism, noting that after a special appeal last October, the Food Bank was also able to rebound from Sept. 11.
“We hope that we don’t have to do that again this year, but we know that if we do, the people of Rhode Island will respond,” he said.
Kostas, who also serves as the program manager for the Rhode Island Grant Makers, said the economic tide isn’t just affecting the large non-profits. She said smaller organizations, which for many years have provided grant funding to local groups, are also worried.
The shortfall is putting a bigger burden on corporate grant providers, who are also dealing with economic limitations. Karen Davis, director of the Hasbro Charitable Trust, said applications to her organizations have drastically increased this year, as have phone calls from organizations wanting to find out if they qualified for one of the company’s grants.
What remains to be seen is just how dramatic the impact will be and it could be months before anyone knows.
“This is clearly a December thing,” Marcantonio said. “There is always an element of tax planning in this type of giving, so it’s not something that many people are actually thinking about now.”
