April 3, 2008
With economy faltering, nonprofits brace for recession
(Page 2 - Previous Page)"Consumer confidence is at its lowest level in 30 years," said Gary Tobin, the president of the Institute for Jewish and Community Research. "Small donors are no different than mega-donors. If their retirement funds are down and unemployment touches them and they are behind in mortgages, then giving will suffer. No one knows how long this will last."
The effects of the economic downturn already have been felt on the ground.
In Sarasota, Fla., where the subprime mortgage crisis has hit as hard as anywhere in the country, the Jewish Family & Children's Service of Sarasota-Manatee has seen one-time donors who cleaned up in the real estate market become clients in need of help, said Rose Chapman, the organization's president and CEO.
In New York, where the recent collapse of Bear Stearns was felt hardest, nonprofits are bracing for the worst. Bear Stearns alone employs some 14,000 employees, and it is estimated that half or more will lose their jobs. Its collapse could have much broader implications in the financial services industry.
As the job market tightens around Bear Stearns and New Yorkers are faced with steep rises in rent and other expenses, the Metropolitan Council on Jewish Poverty is bracing for a huge influx of Jews near poverty, its executive director, William Rapfogel, said.
Rapfogel, whose agency serves some 225,000 needy New York Jews, is in the middle of an intense fundraising drive that has brought in $2 million over the past few weeks.
Still, he knows that won't be enough.
"What we are seeing is a virtual tsunami, a perfect storm," Rapfogel said. "We are not sure how that will affect our agency. The city is already talking about cutbacks in its budget. Many food pantries are bare, and at the same time we anticipate having an avalanche of more needy people."
Outside the United States, as the dollar continues to fall, nonprofit organizations that rely on dollars for their budgets but pay for their expenses in other currency are feeling intense budget crises.
According to Shalgi of the Israel Philanthropy Advisors, the dollar has fallen against the shekel by 25 percent over the past 18 months, providing a major challenge for the Israeli nonprofit sector. Approximately 12 percent of philanthropic dollars spent in Israel come from overseas, she said, and two-thirds of that -- an estimated $1.5 billion -- is collected in dollars.
The JFN held two sessions Tuesday to help philanthropists talk out the problem.
The Jewish Agency for Israel, for instance, faced with a $20 million deficit because of the falling dollar, is now considering serious structural changes to cope with the situation.
At home, there is also the question of how a drop in Jewish philanthropic dollars could affect what has been a stunning recent growth of dynamic, young Jewish endeavors pushed mainly by entrepreneurial philanthropy, where donors take chances on innovative yet untested programs.
The director of one such program is taking a wait-and-see approach.
Daniel Septimus is trying to triple the budget for his Web site, myjewishlearning.com, which offers a wealth of accessible, multidenominational information and thought pieces on Judaism. Though he is not terribly concerned yet for his endeavor because he primarily has been courting large foundations, Septimus hopes that the economic downturn does not stunt the growth of what he sees as an unprecedented time in Jewish innovation.
"There have been a lot of resources around the last few years, and I am sure a lot of us in this business have gotten used to at least the fact that there is money around, whether it is coming to us or not," he said.
Septimus says the problem hasn't been discussed as much in terms of the Jewish renaissance of the past few years.
"We haven't discussed the economics of that so much because a lot of it has been facilitated by a relatively strong market," he said. "But we are all of a sudden realizing that life over the past few years has been great. There have been great new programs created, but that was largely facilitated by there being a lot of money around.
"If anything, there is now the fear of it being harder to fundraise," Septimus said. "Even if it is just a fear."
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