Many of the people reading this article
are reeling from the blow dealt their savings, thanks to October’s
sudden and steep drop in the stock market, a plunge that followed a
year’s decline.

But there are those who don’t have
retirement funds to feel panicky about. They’re worried instead about
finding or keeping a job and keeping a roof over their heads. They need
help getting back on steady ground. They’re turning to shelters and
food pantries for help, organizations that rely on the generosity of
individuals and foundations to offer it.

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And there’s the catch: As asset values tank, so will philanthropic dollars, but the need for them will grow greater.

It’s too soon to know exactly how
severe the impact will be on private giving or foundations — indeed,
many Arkansas foundations are heavily invested in Wal-Mart stock,
shares of which are selling higher today than they were at the first of
the year — but the struggling market bodes ill for grant-seekers in the
year to come. And a recent survey by Guidestar, a non-profit that
tracks charitable giving, found that 39 percent of U.S. charities in
the Southeast (including Arkansas) report a drop in gifts so far this
year, compared to 2007.

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“Times are hard for everyone,” observed
Heather Eason, president and CEO of the Arkansas Community Foundation,
a public foundation that oversees more than 1,000 donor funds.
Foundations whose investments took a hit may struggle to meet
multi-year commitments, Eason noted, while the demand on them “to
support non-profits is up … like [support for] direct-service
non-profits, food pantries, women’s shelters, those doing the hard work
out there. Their expenses are going up, and any who have endowments,
their savings are going down.”

Our House, a shelter for the working
homeless on the grounds of the old Veterans Hospital on Roosevelt Road,
is one of those non-profits who are caught.

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“It’s a double whammy for us,” said
Georgia Mjartan, executive director of Our House, which raises its
$550,000 yearly budget from gifts and grants. She expects grants from
foundations to decline, and says the agency is already beginning to
feel the crisis’ effect on individual givers: Our House’s annual Tie
One On fund-raiser, to be held in December, is having trouble getting
the sponsor support it’s had in the past.

“One thing I want to make clear: We’re
not seeing people being less generous,” Martjan said. They’re giving
their time, if not their money; volunteer numbers are up. Our House has
long been able to serve dinner to its residents daily with the help of
churches and other service groups; now, Mjartan said, “there’s so much
interest, we have different groups providing lunch, too.” Volunteers
know that if they themselves are hurting, “the poor among us must be
feeling it even more.”

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Our House serves about 1,000 homeless
individuals, including hundreds of children, a year. Its clients
include men and women who’ve lost their jobs because they couldn’t
afford gasoline, people who are finding they have to compete with
better-educated former middle-management employees for their low-paying
jobs. They are people having a hard time finding affordable housing.
“Try finding a two-bedroom you can rent for $400 a month,” Mjartan
said. “They’re not a whole lot of units.”

As luck would have it, Our House is in
the midst of a $400,000 capital campaign to renovate space on its
campus to house families. Raising money now means “we have to get
creative,” Mjartan said. “We’re asking for less from more people.”
In-kind contributions are important: Redstone Construction Group, for
example, donated $40,000 worth of asphalt and labor toward the
renovation. Important contributions of food come from Potluck and the
Arkansas Foodbank Network.

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Over at Potluck, a food rescue agency, executive director Carol Herzog describes the situation as “a big pie in the face.”

“We’re all feeling the pinch,” she
said. Potluck has trucks to fuel, drivers to pay, refrigeration to run
to preserve perishables. (Ironically, while non-perishable food
donations are drying up, perishable are rising, because the restaurants
that are among Potluck’s 195 food donors are seeing a downturn in
customers, leaving more food unconsumed.) Herzog said she’s not worried
about the hurt put on Potluck’s endowment fund; everybody is in the
same boat. But she said it “will be interesting to see” how well the
charity’s annual fund-raiser — the “Not at All a Ball” non-event that
invites supporters to contribute what they would have spent going out
to a gala — does in March.

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Assets reported on 2008 tax returns for
most private foundations will look very different from those included
in this philanthropy report.

The Charles A. Frueauff Foundation, for
example, reported fair market assets of $124 million on its 2007
return. But as of Nov. 4, assets stood at $90.9 million.

Unlike many foundations, Frueauff
doesn’t award multi-year grants, so there are no outstanding promises
that won’t be filled. What will be the impact on Frueauff’s giving?
“The likelihood of picking up new agencies is slim,” president David
Frueauff said. “We’ll really focus in on hunger, really focus in on
shelter, really focus in on social areas that are going to be so
impacted with the economic downtown,” he said.

Foundations don’t want to make gifts
from the corpus of their holdings. They want to make gifts from
earnings; Frueauff shoots for a return of 8 percent, to pay for grants
and operation.

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But, Frueauff said, “now would be the time you would consider doing that.”

 

One of the supporters of Our House is
the United Way of Pulaski County, which has just begun its annual
fund-raising campaign. Its goal is $5 million. So far, executive
director John Nazzaro said, things have gone well, and he expects
individuals to continue to be generous.

But corporations — which make 30
percent of the gifts to the United Way — are especially likely to pull
back on giving, he said. Nazzaro acknowledges a certain amount of
concern about what institutional donors will be able to give to the
United Way. “A lot of them are banks,” he said.

Even in August, corporations were
predicting their giving would be flat or somewhat reduced next year,
according to reports in the Chronicle of Philanthropy. October’s
precipitous drop makes those predictions more certain.

The Pulaski United Way supports dozens
of non-profits. Depending on need, Nazzaro said, the United Way may
increase what it calls “venture funding,” which supports new
programming created to meet particular needs. It has the flexibility to
shift funds to respond to the different economic climate; smaller
non-profits, he said, are unlikely to be that flexible in their
budgeting.

 

In September, just days before the
bottom fell out, the University of Arkansas at Little Rock went public
with its campaign to raise $75 million for scholarships, faculty and
bricks and mortar. But UALR is in good shape — it’s already raised $51
million toward its goal, Bob Denman, director of development, said. Of
the $51 million, $10 million is in pledges.

The economy is “something we have to be
sensitive to, especially when we’re building a relationship with a
donor or prospect,” Denman said. It may take longer to reach the dollar
goal, he said, but the deadline of 2011 gives the university some
breathing room.

Denman said planned gifts, pledges of
money from estates, have totaled $4.7 million since 2005, an amount
higher than all the planned giving to the university prior to that
date. UALR received 18,000 gifts last year; Denman said it will be
interesting to see what happens in the year to come.

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