In Tight Times, Many Nonprofits Feel the Pinch as Contributions Dwindle

By GLENN COLLINS Could we have picked a worse time for a gala? asked Richard J. Moylan, president of Green-Wood Cemetery in Brooklyn, regretting the disappointing turnout for the institution’s fund-raising dinner on Friday night. He could have spoken for hundreds of nonprofits of all sizes in all boroughs as they confront the high season of the benefit. The city’s vast and traditionally overstressed nonprofit community is already reeling from the crisis on Wall Street. We have been in perfect storms before, said Lorie A. Slutsky, president of the New York Community Trust, which distributed $166 million to 2,500 nonprofits in 2007. But given the cratering economy, many charities rely on year-end giving, so they are nervous about the impact of the market turmoil, she said, adding that the downturn was having an affect not only on private contributors, foundations, corporations and the availability of credit to nonprofits, but also the viability of government grants and contracts in a time of looming tax-revenue gaps. Beyond providing services to the young, the elderly, the poor and the sick, the city’s more than 10,000 nonprofit organizations are estimated to have some $50 billion in annual expenditures and employ at least 500,000 people. Some 85 percent of the city’s nonprofits have annual budgets under $3 million, and most of them don’t have endowments or cash reserves, said Fran Barrett of the Community Resource Exchange, which provides management and financial help to about 300 community groups. Some smaller organizations will have to shut their doors. If they do, many of their employees, neighborhood residents, will be needing services themselves at a time when there will be less of them, she said. The nonprofits most seriously affected by the economic meltdown depended on donations from financial icons brought to their knees by the crisis, including Bear Stearns, Lehman Brothers, Merrill Lynch, the American International Group and Washington Mutual. Citymeals-on-Wheels – a nonprofit that provides three million meals yearly for more than 18,000 homebound residents through 83 agencies in the five boroughs – received major support from Bear Stearns and its executives. The loss of these contributions and others from a variety of donors, including a troubled hedge fund – as well as spiking food and gasoline prices – forced Citymeals to cancel a $2 million-a-year program in August. For most of a decade, Citymeals had been delivering a second daily meal, in addition to the standard single-meal delivery, to 1,400 people who are slipping into malnutrition, said Marcia Stein, the group’s executive director. During the first week of the financial crisis in mid-September, many donors cut their contributions in half, Ms. Stein said. And after the uncertainty of this week, I shudder to think what will happen next week when we open the mail. Similarly, the collapse of Lehman Brothers and other donors affected the Asian American Legal Defense and Education Fund, and beyond the possible consequences to its budget, the group had been looking forward to a landmark celebration of its 35th anniversary next year. The times make it difficult for us to plan now, said Margaret Fung, executive director of the fund, which offers educational training and legal assistance to poor Asian immigrants. Both Washington Mutual and Lehman Brothers were donors to the Food Bank for New York City, which works with 1,000 local organizations to provide soup kitchens and food pantries serving 1.3 million New Yorkers. The organization has also suffered a $200,000 cut in state funding. But aside from money, much of our volunteer support came from corporations, especially from people in the financial sector, said Gregory L. Boroff, a senior vice president at the Food Bank. Yet as volunteers have dwindled, the Food Bank’s own community kitchen in Harlem, at 252 West 116th Street near Frederick Douglass Boulevard, has had a 35 percent increase in the number of meals served, Mr. Boroff said, compared with this time last year. And at the same time, during the last two weeks, the group’s direct-mail donor revenues were down 27 percent, he said. In Brooklyn, in the heart of the fund-raising season, we were expecting 100 to 150 people to join us, Mr. Moylan said of the dinner at Green-Wood, the 170-year-old resting place of Boss Tweed and Leonard Bernstein. Gala contributions of $150 to $250 will help pay for preservation, education and community outreach projects. We’ll only have 70, he said under a festive white tent at the event, but under the circumstances, we think it’s a success. In other boroughs, nonprofits are worried, and wary. The Bronx has been making such a comeback, and now a lot of hardworking people are going to have the rug pulled out from under them, said Bill Aguado, executive director of the Bronx Council on the Arts. Last year the group gave about $500,000 to 80 arts organizations and 70 artists, but going forward I am projecting that we will have cuts of from 10 to 30 percent, he said. And in many city nonprofits, fears have already been validated. Carol Raphael, the president of the Visiting Nurse Service of New York, said the organization had suffered a 3 percent cut in its 2009 New York State funding, amounting to several million dollars. The organization provides a network of home-based services to some 30,000 seriously ill and elderly people in the five boroughs and parts of Westchester and Nassau Counties, and all of this is happening while the need for our services is increasing, she said. As for nongovernmental donors, some have already told United Neighborhood Houses of New York that there will be no new grants in 2009, said Nancy Wackstein, executive director of the federation of 35 community centers and settlement houses in five boroughs. Its agencies employ 8,000 people, many of whom are low-income, Ms. Wackstein said. If there are layoffs, fewer people will get services – and many of the people we employ are one paycheck away from want. At least one of its community centers has already been affected by government budget-cutting. On Monday, Stephan Russo, executive director of the Goddard Riverside Community Center on Columbus Avenue and 88th Street, had to inform the staff of Public School 165 that Goddard’s 10-year-old Dropout Prevention Program there would have to be closed. The city cut the entire $90,000 budget of the program at the elementary school, at 109th Street between Amsterdam Avenue and Broadway. However, the picture is not universally gloomy. Some established nonprofits have so far eluded the bailout blues. The New York Public Library has not seen a decline in support for its annual Library Lions fund-raising dinner on Nov. 3 for 600 people. A spokesman said the library raised more than $2.6 million for the event, only $50,000 short of its goal. And the New-York Historical Society’s History Makers Gala, its annual fund-raiser, which will be held on Oct. 15, has already exceeded its goal of $1.3 million, said Louise Mirrer, the society’s president. She remains optimistic for the future, thanks to the loyalty of donors and because with a maximum admission fee of $10, she said, we are a bargain. But even for organizations that have not suffered funding cuts, it is planning season, and we are going to have to be much less ambitious about our next budget than if we had been planning it four weeks ago, said Andrew Friedman, a co-executive director of Make the Road New York, a nonprofit that has four offices in Brooklyn, Queens and Staten Island. Mr. Friedman worries that the city and state will reduce support for the organization’s legal services, after-school programs and adult-literacy classes for 5,000 low-income New Yorkers. Although some nonprofits may fail, others may survive if we see more strategic alliances between smaller agencies and larger nonprofits that can help them with administration and fund-raising, Ms. Wackstein said. And in the long run, nonprofits are very resourceful groups, Ms. Slutsky said. And New York is a city of very generous people.