Charities Feel the Pinch During Economic Crisis

RAY SUAREZ:

This is a traditional season of giving for many Americans, when the holiday spirit and end-of-the-year tax breaks encourage a spate of generosity in most years. But this is not a normal year.

With the economic downturn taking a toll on all forms of spending, how are charities feeling the pinch? And how do they adapt?

For answers, we turn to Art Taylor, president and CEO of the Better Business Bureau's Wise Giving Alliance, which monitors charities; Stacy Palmer, editor of the newspaper Chronicle Of Philanthropy; and Major George Hood, national community relations and development secretary of the Salvation Army. He oversees the charity's national fundraising.

And, Stacy Palmer, let me start with you. Are we still holding our breath and seeing what the end of the year brings? Or do we already know what impact the economic downturn has had on charitable giving?

STACY PALMER, The Chronicle of Philanthropy: We already know that it's a pretty tough time, but these last few weeks are very crucial for many non-profit organizations, and we've seen giving drop in many places, but one bright spot has been that, for many social services organizations, the ones that provide food to the hungry, the very needy people, they've seen a little bit of an increase in part because there have been so many stories about how desperate people are and how middle-class people, as well as low-income people, are turning to charities for help. So giving has increased a little bit, but not nearly enough to meet the demand.

RAY SUAREZ:

Art Taylor, what about those not-for-profit institutions that give to others out of their portfolios, out of the holdings they have and husband from year to year?

ART TAYLOR, The Wise Giving Alliance:

Sure. Foundation giving has been hit by this, of course. Their endowments are down as a result of the declining market, although many will tell you that they will step up to the plate and try to give a little bit more because of the demand.

It will be very difficult for them to sustain that over a long period of time, particularly if their portfolios don't rebound. So we'll have to see what happens with that.

RAY SUAREZ:

Major, I guess the terrible paradox for organizations like the Salvation Army is that need increases as means decline.

MAJ. GEORGE HOOD, The Salvation Army:

Yes, that's very true. We're seeing some tremendous increase in need across the country.

I was talking with one of our units in Columbus, Ohio, just yesterday, and he cited for me that, last year — they go out every night and feed the homeless people in the streets of Columbus. Last year, they were serving 125 meals a night. This year, they're serving 375.

And most of those growth numbers he is seeing are the faces of women and children who are living in the streets of Columbus. That story is replicated all across America: increased demand for utility assistance, increased demand for housing, increased demand for transportation.

And as we now are into this Christmas season, we're seeing the increased demand from people who say to us, "I have been a faithful donor to the Salvation Army. Today I'm asking you for help, and I'm embarrassed by that."

But we're now seeing donors, historical donors who are now people who are coming to us saying, "Can you help us?" because the needs are so great.