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Lean times bringing nonprofits together - Tight budgets foster more cooperation.


Lean times bringing nonprofits together:  Tight budgets foster more cooperation

Article by MIKE CHALMERS • The News Journal • December 27, 2010

Link: http://www.delawareonline.com/article/20101227/NEWS/12270328/Lean-times-bringing-nonprofits-together

A year after a report on Delaware's nonprofit groups found them struggling to cope with the state's growing needs, several leaders said the community is stronger but not yet out of the woods.

Continued high unemployment and decreases in charitable donations have taken a toll on nonprofits over the past few years, said John Baker, managing director of the Delaware Association of Nonprofit Agencies (DANA).

Many nonprofits have responded by collaborating on projects, sharing resources and finding new sources of donations, he said. "We're in a better place than we were last year," Baker said.

The report, titled "Philanthropy in the First State," found that more than a third of the state's roughly 1,000 active nonprofits regularly operate at a loss.

It also found that Delaware incomes are 3 percent higher than the national average, yet individual donors here give 9 percent less.

Increasing the number of individual donors and the amount they give needs to be the next big focus of  nonprofits, which can no longer rely on a few big donors, several leaders said during a recent roundtable discussion sponsored by DANA.

"This has been a community that's been dependent on 'the usual suspects,' " said Judy Govatos, executive director of The Arc of Delaware, which serves people with mental disabilities. "They've been extremely generous, but we've come to expect that support will always be there," she said. "Looking to individuals is something we definitely have to do."

Baker said 75 percent to 80 percent of all charitable dollars come from individuals, but the vast majority of that money goes to churches, schools and hospitals, not social-service organizations.

YWCA Delaware has promoted individual giving for the past few years, said Chief Executive Officer Ginny Burke Marino.As a result, individuals now provide 13 percent of the group's income, compared with just 5 percent a few years ago, she said. The increase helped replace money cut by government and other large donors, she said. "That hasn't grown the pie, but it has allowed us to weather some of the storm," Marino said.

Patricia Beebe, executive director of the Food Bank of Delaware, said the organization uses volunteering as an opportunity to teach people about hunger issues. Many of them become financial donors, she said.  "We want people to learn what we're all about, and often the best way to do that is to let them feel it," she said.

Individual donors may not feel they're contributing much, but their money adds up, said Bob Elder, director of marketing for Santora CPA Group, an accounting firm that works with nonprofits. Elder helped launch the monthly DANA roundtable discussions. "It's amazing what $20 from everybody can do, rather than relying on $10,000 from 10 people," he said.

Large donors - such as corporations and philanthropic foundations - will always be major sources of income for nonprofits, Baker said. Foundations use interest and earnings on their investments to make grants to nonprofits. The recession has taken its toll on them, too.

The Longwood Foundation, for example, had more than $900 million in assets in 2007. Typically, the foundation gave $1 for every $2.50 that nonprofits requested, President There du Pont said.
Last year, the foundation's assets had dropped to $550 million, and it was able to give only $1 for every $4 that nonprofits requested, du Pont said at the DANA roundtable.

That situation is starting to improve, he said. The foundation now gives $1 for every $3 sought. "Things are getting better, but they're still not back to normal," du Pont said. He said he has seen more collaboration and financial efficiency among the nonprofits applying for grants from the foundation.

Ted Van Name, president of Goodwill of Delaware and Delaware County, said he and many other nonprofit leaders are always looking for ways to share building space and other resources.  "That's going to be especially important in the next few years, because the stimulus money is going away and the stock market hasn't come back yet," Van Name said.

Baker said nonprofit leaders have also formed small working groups to focus on faith-based charities, boards of directors and other topics.

Edited Mon, Dec 27, 2010 2:03 PM

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