Peter Cooper

A number of nonprofit organizations in the Chattanooga area are bracing for hard times as donations fall and needs grow.

“It’s a scary time to be a nonprofit,” said Sandra Hollett, CEO of the Partnership for Families, Children and Adults, a nonprofit agency that provides professional counseling, crisis intervention, education and other social services. “Everybody needs you, and resources are predicted to not support those needs.”

As the nation faces an economic downturn — with gas and food prices climbing, home foreclosures on the rise and a credit crisis stewing — people need charitable services more than ever, said Peter Cooper, president of the nonprofit Community Foundation of Greater Chattanooga.

“There are more demands on the nonprofit sector every day,” he said. “You’re asking nonprofits to do more, yet they don’t have a commensurate increase in their income. In some cases they actually have decreases, so it’s a very difficult time.”

The Chattanooga American Red Cross has seen a 10 percent dip in its donations this year as a tight economy squeezes Chattanoogans’ expendable incomes, said Barbara Alexander, executive director of the Greater Chattanooga Area Red Cross, which serves nine counties in Southeast Tennessee and North Georgia.

Those losses — combined with a decrease in funding from the United Way, which provides 40 percent of the organization’s resources — mean the organization is struggling, Ms. Alexander said. United Way funding will decrease from $453,000 last year to about $300,000 in 2009, she said.

The Red Cross, now $60,000 over budget in its disaster assistance fund, likely will end the fiscal year with a loss of $150,000, she said.

“I’ve cut every cost I can cut, and this is just a pure situation of having to raise more money,” Ms. Alexander said.

A national study released this week found that charitable giving in the United States remained stable in 2007, holding fast at 2.2 percent of the gross domestic product. The study, released by the Giving USA Foundation, was researched and written by the Center on Philanthropy at Indiana University.

But nonprofit organization leaders surveyed by the researchers expressed fear that donation totals in 2008 will be hindered by a dragging national economy.

So far in 2008, Chattanooga’s Partnership for Families, Children and Adults has not experienced a significant decrease in donations compared to last year, but the group still is planning for a squeeze, Ms. Hollett said. Government funding for the program will decrease this year by about 1.35 percent, forcing the organization into “cost-containment” mode and a redoubled focus on grants to offset losses in funding, she said.

“We’re keeping a very close eye on it,” Ms. Hollett said.

At the nonprofit AIM Center on M.L. King Boulevard, which provides psychiatric rehabilitation services to people with mental illness, donations took a deep hit this year, officials said.

The group’s annual fund drive, which ends Monday, so far has brought in just $16,000 — not even half as much as the fiscal year 2007 drive that raised $35,000, AIM President Bonnie Currey said.

The number of donors to the group’s annual drive is down 11 percent, and the average gift size has dropped by 63 percent, she said. Last year, the average gift was $217 — this year it’s $132, she said.

The group’s May fundraiser — which included dinner and a live auction — came up $7,000 short of the $85,000 goal, Ms. Currey said. For a time that night, agency officials worried the money raised wouldn’t even cover the expense of putting on the event, she said.

“We were just sweating bullets,” she said.

GREATER DEMAND FOR SERVICES

Nonprofit leaders say a greater demand for services could exacerbate any decreases in donation or funding levels.

Demand for Red Cross assistance, for example, has soared this year. By the end of June — the end of fiscal year 2008 — the Red Cross here expects to have helped 950 people, compared to 779 for 2007.

“The good news is people have become aware that we’re taking care of (more) outlying counties,” Ms. Alexander said. “Our problem is expenses have gone way up.”

In the face of unusually high demand for social services in Chattanooga, the Chattanooga Salvation Army will start its Christmas bell-ringing campaign early this year, dubbing the effort “Christmas in July,” said Kimberly George, director of marketing and development. The Salvation Army provides emergency and disaster services, a food pantry, thrift shop and a transient shelter.

“Right now we are definitely up in social-service needs, and monetary donations are flat at best,” Ms. George said. “People are having to make hard decisions on grocery or utility bills. ... People who have never been in need before are, for the first time in their life, having to come to the Salvation Army to ask for assistance.”

At the Partnership for Families, Children and Adults, demand for its consumer credit counseling has gone up, officials said. For example, calls about housing counseling for May totaled 319, compared to 105 for May 2007, figures show.

Even nonprofits that have not seen a decrease in donations are bracing for tighter budgets in the coming year.

The United Way of Greater Chattanooga has not experienced a decline in donations, officials said, since the group’s 2008 fundraising campaign officially doesn’t begin until late August. Last year’s campaign, which ended in December, brought in a record $11.9 million, said Eva Dillard, president and CEO of the local United Way.

Nevertheless, the organization will not increase its fundraising goal over last year in the upcoming campaign “to be prudent,” Ms. Dillard said.

Despite financial hardship, Chattanoogans continue to dig deep for the benefit of others when possible, she said.

“We live in a very, very generous community,” Ms. Dillard said. “So very often people, even though they may be faced with tough times, they realize if they can help and share their blessings with others, they’re very willing to do that.”

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