As the economy continues to flounder, nonprofit philanthropic organizations are finding their coffers empty, leaving many of these organizations searching for funds to stay afloat.
The Massachusetts American Red Cross has faced lean times since Hurricane Gustav hit the southern Gulf Coast – before the public knew the full extent of the economic crisis.
The Red Cross spent about $70 million in relief efforts in preparation for Gustav and was only able to recoup about $5 million, Red Cross spokesman Patrick Baldwin said. The group is currently trying to raise $100 million to compensate for the loss.’
‘It couldn’t happen at a worst time,’ Baldwin said. ‘Corporations are really tightening their belts and are even laying off. These layoffs are creating an environment where people cannot give like they used to.’
Boston University economics department chairman Kevin Lang said it is too early to tell if donations to nonprofits as a result of the economic crisis. But in general, donations do decrease during a time of economic strife.
‘I think people do cut back on donations to charitable organizations during recessions and also when the stock market is down,’ he said.’
Joe Wiinikka-Lydon, manager of foundation giving for Jumpstart for Young Children, a non-profit organization that provides early education, said Jumpstart does not have a sense of how the current economic conditions will affect donations.’
‘ ‘We have been looking at the news to see how different corporations are faring, and we are trying to keep abreast of the news and research that is going on right now,’ he said. ‘We are looking to review our budget and see to it that it is a prudent budget and a smart one going forward.”
Action for Boston Community Development, an organization that provides shelter and food to the low-income residents in Boston, lost more than $700,000 in state and federal funding due to the economic crisis, ABCD Vice President John Drew said. The budget cut will cause layoffs at ABCD, at least in the short term.
‘This economy is affecting everybody,’ he said. ‘Who knows when the end will be in sight?’
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