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Chattanooga: Charities caught in fiscal squeeze

By: Dave Flessner
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Peter Cooper

The slowing economy is generating more demand for help from local charities at a time when many donors are facing their own economic uncertainty.

Nonprofit leaders said Tuesday they worry that the slowdown in the economy and drop in the stock market could discourage donations to churches and charities when they are most in need.

“Charitable giving is under a lot of pressure right now,” said Pete Cooper, president of the Chattanooga Community Foundation, which administers 273 funds for local charities and causes. “There are a lot of charities in Chattanooga that are down from 15 to 25 percent in the gifts they have received this year, and they don’t have that kind of reserve in their budget, so it’s very tough for them.”

Heading into the busiest season for fundraising, the United Way and similar campaigns across Southeast Tennessee and North Georgia are trying, in most cases, just to keep pace with last year.

“Unfortunately, we’re facing the perfect storm with state funding being cut, demand for services going up and many donors less able to give than in the past,” said Amanda Burt, president of the United Way of Northwest Georgia in Dalton. “We’ve had good response to our fall campaign so far, but it’s going to be a challenge even keeping pace with the $3.5 million we raised last year.”

United Way campaigns

Among the five area United Way and Combined Federal Campaign drives this fall, only the United Way of McMinn and Meigs counties is trying to raise much more than a year ago. And even the extra $50,000 goal in those counties is designed to hit a target that wasn’t reached in 2007.

With layoffs at some of the city’s biggest local employers, the United Way in Athens, Tenn., is conducting fundraising cut-a-thons for hair and radio pledge drives to help raise money.

“We’re finding good response from our campaign so far, because a lot of people realize that the need is there and they need to do their part to help others who have even bigger needs,” said Stephanie Linkous, executive director for the United Way in McMinn and Meigs counties.

The United Way of Greater Chattanooga again has set a three-tiered goal, ranging from $11.2 million to do what they say they must do up to $11.9 million to do what they would like to do.

Linda McReynolds, senior vice president for organization development at the Chattanooga United Way, said this year’s campaign “is definitely going to be a challenge” with more than 2,000 fewer employees on the job in metro Chattanooga than a year ago, according to the Tennessee Department of Labor and Workforce Development.

“But we’re cautiously optimistic, because we see a lot of people who still have jobs wanting to do more to help others who are not as fortunate,” she said.

The Greater Chattanooga chapter of the American Red Cross has put out a special appeal to help it raise $1.2 million by next June or the agency may have to shut its doors, agency director Barbara Alexander said.

The number of Chattanoogans in need appears to be much higher than a year ago, according to calls to United Way’s 211. Dr. John Hayes, director of United Way’s 2-1-1 Call for Help, said the agency received 40 percent more calls in the first eight months of 2008 than in the same period a year ago.

“People are struggling, and we’re getting calls every day from people who can’t make ends meet,” he said.

charitable challenge

But philanthropy experts said tough economic times, in general, don’t hurt giving to churches, social service agencies and other faith-based programs as much as they affect donations to education and the arts.

“On average during a recession, our research indicates that giving usually falls by about 1 percent,” said Melissa Brown, associate director of research at the Center on Philanthropy at Indiana University. “But usually faith-based giving and contributions to United Way agencies remain pretty steady.”

Ms. Brown said a stock market decline often hurts major contributions if it continues through the end of a year. But even the market tumult that has cut average stock prices by more than 20 percent this year doesn’t appear to be stopping big donations, she said.

Harvard University announced Tuesday it will receive $125 million, its biggest gift ever, from the Swiss philanthropist Hansjoerg Wyss, to fund a bioengineering institute.

“The big, big gifts are still coming,” Ms. Brown said. “And if the market bounces back like it did in 1987 (after what was the worst one-day drop ever), then we may not notice any difference in giving.”

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