Lag in fund-raising stresses non-profits

While economic indicators may point to a turnaround in the recession, many Dorchester non-profit organizations continue to struggle with less funding coming in from public and private sources.

Indeed, the fourth quarter has traditionally been a boom time for many organizations as donors often wait until the last weeks of the year to make their charitable donations and secure a tax deduction.

But the relentless recession has caused a slowdown in donations and a reduction in grant money from foundations hit hard in the market downturn.

In a poll of 395 charities conducted by the Chronicle of Philanthropy in December, the survey found that one-third expected donations to decline by 10% by the end of the year. And an additional 21% said they expected donations to decline, but by smaller amounts.

Many non-profits are working hard to find new sources of philanthropy and some may end up cutting programs or staff in the new year.

“Some agencies will close their doors this year,” predicted Emmett Folgert, director of the Dorchester Youth Collaborative, which provides a range of programs to support high risk teens. “State money is going to decrease again. We think the turn-around [in state budget funding] won’t really happen until 2011. Right now, funding is at its worst point. Agencies could go under unless private donations and federal funding increase.”

Although Folgert does not believe DYC will close, the agency was hit hard by state funding cuts in 2009. The DYC saw a 50% cut in the state’s Shannon Grant and another 30% cut in a Department of Public Health grant, he said.

The Shannon Grant funds community policing and community-based crime prevention work with teens, he said.

“It also includes getting kids out of gangs and work to make truces so additional crimes do not occur,” Folgert said. “The DPH grant is funding we use in a program working with the younger brothers and sisters of gang members to reach them before they go down the wrong road.”

The DYC also lost a $200,000 earmark from the state budget that it shares with St. Peter’s Teen Center and Dorchester DotWell.
“That money was used for youth development and gang prevention work,” Folgert said. “The money was totally eliminated.”

As a result, DYC cut two adult staff and 10 teen staff. They also cut expenses and hours at the center. “You cannot serve as much food,” he said. “And these are hard times and our teens tend to be low-income.”
Folgert also hopes that no further cuts will be made to youth programs when the next state budget process for FY 2011 starts in May.

Foundation grants have also declined bout 10%, Folgert said.

The agency did receive a couple of federal grants. But these fund new activities, not the old ones that were cut, Folgert said. “And if we didn’t get those, we would have lost half of our staff,” he said.

DYC employs 9 full time staff and 15 youth staff which work part-time.
But Folgert is optimistic that the DYC will persevere.

Federated Dorchester Neighborhood Houses Inc. built in an expectation of fewer contributions in its FY 2010 budget, which began on Oct. 1.
“We assumed that raising money would be really tough. We know we have to increase the volume of asks and expect a little less from our steady contributors,” said Mark Culliton, chief executive of the agency which provides early education, after-school, adolescent development and student support programs and runs two alternative schools. The programs serve some 1,000 students each year.

While many regular donors are contributing, the dollar amounts may be less this year of the economy, he said.

The agency does an annual appeal and has been making calls around that effort for the past few months.

“People are giving, but they are giving less than the year before,” Culliton said. “We’ve had to work harder for every dollar.”
This will continue to be the challenge going forward in 2010, he predicted. “But I am optimistic, both on the short-term and certainly on the long-term,” Culliton said.

It takes time for people to feel personally confident [about finances], Culliton said. “For foundations, there is a lag time for portfolios to build back up. Most foundations in the last two years lost almost 40% in the value of their investments,” he said.

FDNH also receives state funding and all of that funding has experienced a decline, he said. About half of the organization’s budget is government funding and the majority of that is from the state, he said.

“We raise about $1 million from philanthropy every year,” he said. “In order to operate at the same level, you have to raise more money.”

The agency is starting to look at its budget monthly to determine if they have to make additional cuts. In FY 2009, they cut about 10% of their staff, some staff took pay cuts, and the agency trimmed expenses, Culliton said.

In spite of the cuts, they served the same number of students last year that they had planned, Culliton said.

While Work Inc.’s capital campaign concluded in December, more funding is needed to enable them to serve an additional 100 clients and hire more people.

The Beach Street-headquartered organization provides vocational training, work opportunities and job placement services for people with disabilities. The center also has a day-hab program for those unable to work.

The two-year capital campaign raised $1.5 million which was dedicated to the organization’s move from Quincy and the renovation of its current building.

Still, the final quarter of the year saw a slowdown in donations.
“It’s a horrible philanthropic environment right now,” said Jim Cawley, development officer for Work Inc. “People are hunkering down. They cannot even pay their mortgage. Most foundations’ endowments are down 20%. The philanthropic environment has not recovered from the world economic crisis and the Bernie Madoff [investment scam] scandal.”

As a result, many foundations are only grant to organizations and programs that they have a history of making grants to, he said. “They are not granting to new programs,” Cawley said.

Although Work Inc.’s current funding is secure, additional funding would allow more capacity.

“We have people who need our services and are looking to get in here,” he said.

For the most part, donations to Work Inc. are received from community and business supporters and families of employees at the center. The majority of the constituents – about 93%- are living below poverty level, Cawley said.

Donors don’t want to lose DotArt, said Leslie MacWeeney, executive director of the 19-year-old program that provides art education and public art programs for about 1,000 children and adult students each year.

The organization also has a summer program for teenagers and a year-round program for girls called “Sisters for Change.” The program, which runs in collaboration with the Salvation Army, targets girls ages 11 to 15, and offers them healthy choice training, nutritional meals and art programs.

“They also have role model meetings and get to meet women who have done amazing things and changed their lives,” MacWeeney said. “These girls are at an age where they are vulnerable to being pulled in by gangs.”

“The money that we get from the classes does not completely support the organization,” MacWeeney said.

“I’m optimistic that the community will rally,” she said. “The community has always been supportive of us.”

The organization also plans to offer varied payment options for most of its classes starting in 2010. The cost will vary depending on whether the students pay it all up front or make two payments.

This year, DotArt expanded its direct-mail appeal list to 6,000 names up from 2,500 names, MacWeeney said.

Some organizations are looking for ways to partner with other nonprofits to expand services for clients.

Work Inc. has partnered with the Odwin Learning Center in Dorchester. “We applied for a grant because a lot of the folks do not have the educational background to secure jobs,” Cawley aid. “In this partnership, Odwin will run classes for them and we will provide vocational training.”

Work Inc. is building its web presence and finding that helps them connect with donors outside of the region, Cawley said.

The organization hopes they can find tenants for the two floors of space in their building to generate some income.

DYC is looking for more funding from foundations and individuals.
And FDNH is working with its board of directors to do more development work and reach out to more contacts.