California Nonprofits See Drop in Donations, Rise in Demand for Assistance

Bay Area nonprofits are preparing for layoffs and cuts in services after a slow giving season, the San Jose Mercury News reports, even as agencies are seeing surging demand for assistance from laid-off workers.

Many nonprofit leaders in the area point to the unprecedented giving in the wake of the September 11 terrorist attacks as a key driver of the troubling trends, while others blame it on the floundering economy. Foundations, which have seen their endowments shrink along with stock values, are giving less at the same time that profit-challenged corporations are cutting back on their philanthropy. Add individual donors worried about short-term financial security to the mix and you have a recipe for tough times ahead. Indeed, more than half of the 413 California nonprofits queried in a survey sponsored by the California Endowment in November reported a drop in funding in the third and fourth quarters of 2001.

But while donations and gifts to nonprofits are down, the number of individuals looking for assistance is on the rise. One nonprofit agency, Sacred Heart Community Service in San Jose, helped 7,000 more people with food assistance from December 1 to December 27 than it did during the same period in 2000.

"It's the 'Perfect Storm' — the combination of the economic downturn, increased caseloads and the impact of September 11, which accelerated the economic downturn," said Jan Masaoka, CEO of CompassPoint Nonprofit Services in San Francisco. "Everybody I know is laying off [staff]."

John Boudreau. "Charities Anticipate Layoffs, Cuts As Flow of Donations Slows" San Jose Mercury News 01/02/2002.