Nonprofit Blues

Charitable giving takes a dive in tough times

Sunlight spills through the front door of Hope Animal Shelter, and across a pair of cats wrestling among a scattering of toys. One of them, a tabby named Calvin, suddenly leaps atop a carpeted cat stand and pivots like a dancer, while jet-black Carly nearly knocks over his food dish.

Just then, a volunteer grabs the dish and pushes it to one side, smiling slightly before moving off to clean another pen at this cheery midtown shelter. Pet food doesn't come cheap these days. And at Tucson's only no-kill sanctuary for dogs and cats, paying to care for some 80 animals is a constant challenge in the best of times. But in today's tough economy, survival for crucial charities such as Hope is a daily balancing act.

"The donations that we're getting in are definitely less than we've gotten in the past," says Susan Scherl, Hope's executive director.

"We don't get those big $500 or $1,000 checks that we were getting. Now for the most part, the checks are in the $25 range."

Scherl founded Hope in 2007, following stints at the Humane Society of Southern Arizona and other shelters. After growing dismayed at seeing animals routinely euthanized, she created this refuge where no animal is killed for lack of space or money. But such compassion does not come cheap: Hope's monthly rent and utilities top $3,000. Add another $5,000 for medical expenses. All said, keeping her busy shelter alive costs about $12,000 a month.

To boost its bottom line, this weekend Hope will host its annual "Barkin' Ball" fundraiser at St. Philip's Plaza. The event has now become a make-or-break affair, says Scherl. "For example, I have a $2,500 bill over at Southern Arizona Veterinary (Specialty and Emergency) Center, for a cat that developed respiratory problems and had to go on oxygen. If there was a nice amount of money set aside for things like that, it would be great. But that's what we're struggling with now."

Hope isn't alone, says Steve Alley, president of the Community Foundation for Southern Arizona. "The challenging thing is that this has come in waves. You had the stock market stuff in the fall of last year, and then there are the unemployment numbers. Just about every part of the economy is hurting, and so it's caused a real challenge for a number of nonprofits. No matter how you're funded, whether by private donors or by government sources, in all cases, everything I've heard is that it's down."

Just how down is it? According to the GivingUSA Foundation and other groups, charitable donations across the country dropped by 2 percent last year, to $307.7 billion. Donations by individuals fell 2.7 percent to $229 billion, and corporate philanthropy dropped by nearly 5 percent.

Of that, environmental and animal welfare groups such as Scherl's Hope shelter received $6.6 billion, compared to $106.9 billion for religious organizations, 40.9 percent for education and $21.6 for health-related organizations such as community clinics.

Those decreases carry broader societal implications as well. Consider that there are roughly 1.4 million federally registered nonprofits in the United States—a 27 percent increase over the last decade. They now account for about 5 percent of the gross domestic product, and 8 percent of salaries and wages paid in this country. At the same time, the nonprofit sector provides critical services ranging from mental health and food banks to care for abandoned animals—all of which are exacerbated by a tough economy.

That reality has prompted much soul-searching, says Alley. "Certainly, this time period has forced every nonprofit to think about its business model—where it gets funding, how it survives." Small, meagerly funded arts organizations are particularly compelled to re-evaluate their goals, if not their identities, he says. "It puts even more pressure on those folks to think creatively, not only about how they provide their service, but what the structure of that might look like. We're certainly hearing a lot more about things like mergers and collaborations than we did before."

Among those pondering big changes is Voices, a community-based organization providing a forum for youths to compile personal stories and collaborate on arts-in-education projects. Stephanie Balzer is Voices' executive director. She says the recent loss of longtime funding sources has prompted the 10-year-old group, with a $324,000 annual budget, to rehash its options. "One was to shrink back and recoil and handle this stress, which seems negative and out of our control. Another was to look at this issue and address it head-on, to buckle down and get creative and say, 'What kind of agency do we want to be?'"

Recently, Balzer turned to serious discussions with ShareMore Children's Productions, a local group that uses performing arts and literature to educate children. Instead of competing for donors, went the thinking, they could simply combine their forces. "I knew that they had very strong programs and that we were very like-minded," Balzar says. "So we began a conversation about what we could do together, because there is strength in numbers. And it wound up becoming merger talks. We're both looking to change youths' lives, so why not do that together?"

Over the past year, there had been similar rumors that Susan Scherl's Hope Animal Shelter might merge with another local animal sanctuary. But that talk has since subsided. Instead, Scherl continues to remain tenuously afloat on her own. Still, she's determined to weather this storm and keep Hope's doors wide-open, especially as more and more animals are being abandoned by financially strapped families.

The alternative, she says, is too heartbreaking to consider. "I just got an e-mail from a woman who found a blind dog back in July that was living outside her mother's house. While her mother was alive, the caregivers were taking care of it. Now the dog is by itself, with nobody taking care of it except to bring it food.

"So we have a blind dog living alone in a backyard. What am I supposed to say to that? How can I say no?"