Charities Suffer in the Recession

Charities in the US

In the US there are over 1.2 million charities and other nonprofits hoping to reach their financial goals this year. Unfortunately, due to the recession many are predicted to fall short. More than 93% of nonprofits are experiencing notable declines in charitable donations. According to The Bridgespan Group, a consulting organization for nonprofits, not only is funding from citizens getting smaller, but other forms of funding are being cut drastically.

The Salvation Army suffers

Everyone has seen them on street corners and in front of businesses. The jolly worker rings the Salvation Army bell, hoping for donations from passersby. This year even the famed Salvation Army is planning on a shortfall. Normally Thanksgiving through Christmas is the peak season for the charity to raise funds. Major George Hood, Chief Communications Officer for the Salvation Army, said, “Fundraising is very difficult in this economy, yet we know that there are people suffering in all 50 states.”

Since the recession, spending has declined drastically. A shortage of people traveling the streets to buy, means a shortage of people passing by the red-kettle ringers. Hood added, “That impulsive giving can be jeopardized if there is no foot traffic in malls. The reality is that we are in a tough economic period. We have to be prepared for it. All we can do it get out there and do what we do and know that the American public has never let us down.”

Service organizations suffer

Another sector braced for a lack of funding is service organizations. Karen Pushaw, director of a soup kitchen in Philadelphia, said, “More people are seeking services at the same time as fewer people are able to contribute.” Service organizations are expecting a decline in funding along with an increased demand for help from the needy. One facility in New York City called Nazareth Housing, a 58-bed homeless shelter, has been operating at full capacity since June of this year.

The organization does not expect to meet its budget, but has a “no one turned away” policy that presses them to stay open until there is no room available. Executive Director Michael Callaghan said, “There are a variety of fiscal stresses on nonprofits. Many small not-for-profits are failing, or they are so reduced that they are unable to do their missions. We are going to see more people go out of business, which will add to unemployment and leave gaps in services.”

When will charities and service organizations mend?

Industry experts are looking to the past as a gauge on how the charitable market will recover. In the Great Depression it took three to four years for charitable giving to return to normal. Experts have good news though—they say that due to the income level per capita being much higher than in the 40s, recovery could happen much quicker. The recession hampered businesses and organizations drastically, but hope in a recovery is much stronger than it was in previous economic downturns. Most likely, charities and service organizations will mend and see the same numbers they once did when the economic turnaround is complete.

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