Local nonprofits face tough season

As Giving Tree volunteers hang gift requests today on their Moorhead Center Mall tree, the organization has a request of its own: More donations, please.

Nonprofit organizations are preparing for their toughest financial year in recent memory.

For example, the Giving Tree, a program run by FirstLINK's Holiday Clearing Bureau, expects less donated gifts this year because of the sluggish economy.

The organization plans to use reserve funds to fulfill every kid's wish list, said Mark Bourdon, FirstLINK's executive director.

The Giving Tree is not alone in its need. Nonprofits are seeing money cut from all sources. With a depressed economy, both private and government funds are drying up.

Mujeres Unidas, an organization serving the local Latino community, is one example. It has ample money to carry out its programs, but struggles to pay rent and its phone bill, said director Jill Johnson-Danielson.

"A lot of funders don't want to give money for general operations. Funding programs is much flashier," she said.

Johnson-Danielson said the organization may have to reduce the hours of the agency's two part-time employees. But that isn't a long-term solution, she said.

"You don't go into this work without realizing the risks," she said. "We'll adjust what we have to and see if we can sustain this (program)."

Nonprofits tend to feel the recession one year after the rest of the country, said Jon Pratt, executive director of the Minnesota Council of Nonprofits.

"Some organizations are going to be closing down," he said. As far as he knew, no organizations in Clay County were planning to close this year.

Almost 84 percent of charitable gifts, including those for religious organizations, come from individuals, said Jan Ulferts Stewart, executive director of the Fargo-Moorhead Area Foundation. When the economy hits the personal pocketbook, nonprofits suffer.

Ulferts Stewart said most people will continue to give money to nonprofits they feel make a difference in their community.

What changes during tough economic times is how much they contribute, she said.

On top of cutbacks in individual donations, many foundations are reducing grant money for the first time in more than 20 years, Pratt said. Investments are down, which ultimately means fewer grant dollars are available.

For the Hewlett and Packard foundations -- two of the top four grant-makers to North Dakota in 2000 -- this means cutting up to 60 percent of their grant funds. While the Packard foundation contributed $700 million to nonprofits nationwide in 2001, it gave $250 million in 2002, Pratt said.

In addition, regional nonprofits will lose about $450,000 in federal funding beginning July 1, 2003, said Kathy Hogan, director of Cass County Social Services.

All of the cuts will affect services for children, ranging from help for at-risk youth to infant care.

Yet while the government and some larger foundations will be cutting back, local foundations, such as the Fargo Moorhead Area Foundation and the Dakota Medical Foundation, are maintaining or increasing their grant funding.

This year, the F-M Area Foundation plans to divvy up $1.9 million in grants to local nonprofits as opposed to last year's $1.6 million. While the foundation's investments are down with the rest of the stock market, its assets have actually increased, Ulferts Stewart said.

"The charitable climate here is healthy and strong," she said.

But at the same time, the amount of money nonprofits are requesting has increased by 54 percent, she said.

To minimize financial risk, many nonprofits request funding from multiple sources, such as foundation grants, government contracts and dollars from individual donors.

Even though the Fargo-Moorhead Rape and Abuse Crisis Center receives grants from various sources, it feels the pressure from the weak economy.

"We can take a loss in any one source," said Beth Haseltine, its executive director. "But when they mount, it's hard."

That's the sentiment across the board, Hogan said.

When federal and state governments battle shrinking budgets, fewer dollars flow to agencies providing specialized and important community services, she said.As a result, the community will probably see the end of good programs, Hogan said.

"It's the chipping away that does agencies in," she said.

And it's highly unlikely for things to pick up for the 2003 holiday season, Pratt said.

"This is a year of retrenchment," he said.

Readers can reach Forum reporters Lisa Schneider at (701) 241-5529

and Erin Hemme Froslie at (701) 241-5534.