As stocks decline, so do donations

Charities are reporting fewer contributions but higher demand due to worldwide financial crisis

Shelves are becoming empty. Resources are becoming scarce. And donations are in decline.

This is the current reality for many hospitals, food banks and other service organizations in Toronto. As the current economic crisis continues to worsen, donations to such institutions are decreasing significantly while demand for services is expected to skyrocket in the upcoming winter months.

These organizations haven’t been hit as hard as those with endowments invested in stocks and mutual funds. However, a heavy dependence on public and private donations has led to many facing significant gaps in both finances and supplies.

A young girl gives Salvation Army volunteer Priscilla Morehouse a donation at Scarborough Town Centre on Nov. 27. In the last few months the charity has a seen a flat-line in donations across the country.

For the Salvation Army, these are desperate times.

For local Ontario spokesperson Captain John Murray, his red flag was receiving an unprecedented number of early requests for Christmas assistance starting in early September. But the organization is facing a huge struggle to fill that need as the amount of donated food, clothing and funds have flat-lined across the country.

“In some areas of the [Ontario] region such as the national capital and the Prairies we’re down as low as 15 per cent Ö Ottawa and Kingston are 6 and 8 per cent,” said Murray.

And while the number of financial donations has doubled, Murray underscored current fundraising efforts still falling $5,000 short of the amount raised during the same time last year. “People are willing to give and even in bigger numbers but they’re giving less,” he explained.

Murray also said there has been increasing demand for its food bank services during the last few months. The charity’s signature thrift stores are now more popular than ever, but some locations in the United States say there aren’t enough clothes to fill the racks.

The Salvation Army isn’t the only public service organization facing shortfalls in resources. Hospitals, food banks, and other social service groups are also being hit hard.

During their fall food drive this year the Daily Bread Food Bank noted a much fewer donations from corporate partners and individuals. Daily Bread spokesperson Gabrielle Chakal said there was a 15 per cent decline in contributions from the public, and expects the trend to continue into their Christmas campaign.

Chakal pointed out that adding to the strain of fewer resources was an increased demand for services by more families and individuals from the middle class. She said this time “everyone, everyone is impacted by the general state of the world economy.”

Chakal estimated demand for food banks has risen by about 20 per cent over the last few months as more people are coming in to pick up expensive items like baby formula. However, those items are also least likely to be donated due to their high cost.

“We tend to rely upon corporate gifts directed towards items like that in order to fulfill need,” she said.

Chakal further clarified the 15 per cent decline also applied to corporate gifts. She said corporations were lowering budget amounts for charitable causes and employees were understandably cutting back their contributions to company food drives.

“They are people, they are individuals,” she sympathized. “So they are not going to give as much whether it’s on a personal level or with their company, based on the way things are going.”

Medical institutions are also being affected by the crisis, but like the Salvation Army, the Mount Sinai Hospital Foundation has also noticed a higher in number of donations, but of lower amounts. And while donations of appreciated stock are now an option for many charities, the hospital’s foundation is currently discouraging people from doing so at this time.

However despite the volatility of the market, Mt. Sinai Hospital Foundation VP of advancement Harold Heft remained optimistic about the hospital’s financial future. “It may affect the number of funds we’re able to raise and we do have to safeguard against that,” said Heft in regards to the current recession. “But there’s a belief in the field that in difficult economic times philanthropy doesn’t suffer as other industries.”

And unlike the situation at the Salvation Army, Heft said the mood among the hospital’s foundation board was much calmer. “I don’t think anyone’s pushing the panic button,” he said.

That’s not the situation at Big Brothers Big Sisters of Toronto. This year the children’s charity is facing many of the same problems as the Salvation Army and the Daily Bread Food Bank.

President Cathy Denyer admitted the local chapter had also experienced a decline in donations. While they weren’t significantly lower amounts, Denyer said a higher number of applications for mentors further strained such limited resources.

Denyer expressed optimism that a new ad campaign with Mastercard and Roots, strong corporate support and the generosity of the public would be enough to raise the $300,000 necessary for completing this year’s fundraising goal.

However she admitted to being cautious about the outcome of the financial markets and their possible impact on the charity. “We are preparing for an economic downturn.”

As for those who can’t afford to donate a lot, Denyer suggested a low-cost alternative volunteer to mentor one of the 365 children currently looking for placements. “It’s the gift that keeps on giving,” she added with a laugh.

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Posted: Dec 2 2008 5:28 pm
Filed under: Features