Charity begins at home

Giving declines in recessions, but food banks and shelters aren't hit as hard

CHICAGO (MarketWatch) -- It's a sad story and a sign of the times: A growing number of people who had been regular donors to the Greater Chicago Food Depository are now asking the charity for help in feeding their families.

Visits to the charity's food pantries are up 30% in the past year, said Bob Dolgan, its director of communications. The rise has been steady since January.

"Given rising unemployment and food costs being high... it's harder and harder for everyone to make ends meet," he said.

That doesn't mean Americans with the means to give are turning their backs on all charities this year -- especially when it comes to helping their neighbors.

Not surprisingly, giving fell 1%, on average, during recession years between 1967 and 2007, according to research from the Center on Philanthropy at Indiana University and the Giving USA Foundation. In years without a recession, charitable giving typically grows 4.3%.

But donations rise for some causes when the economy is weak. Giving to human services and public-society benefit charities -- including donations to food banks or shelters -- grows during recessions, according to the research.

Demand for services from those organizations also grows at these times, said Tim Seiler, director of the fundraising school for the Center on Philanthropy.

"So it would follow then, if people are going to want to try and meet the growing demand, they might give a little more," he said.

At the Greater Chicago Food Depository, about 400 food drives have been registered by workplaces, churches and other groups since the beginning of its fiscal year, Dolgan said. That's up from the 250 food drives that had been registered by this time last year.

Meeting demand

Job losses have increased in the current slowing economy. The bust in the housing market has left people owing more than their homes are worth, making more households vulnerable to foreclosure. High food costs are making it harder for families to make ends meet.

Those factors weigh on the minds of donors when they're deciding how much they can afford to give, and what causes should see the fruits of their generosity.

"When sitting with their checkbook and facing the realities -- with people losing their jobs or losing their nest eggs -- it's going to be harder to make those choices," said Ken Berger, president and CEO of Charity Navigator, a Web site where donors can get information about the financial health of charities.

It's uncertain whether people, struck by the need in their communities, seek out charities that keep donations local. But people tend to keep a certain order when distributing their dollars, regardless of the economic climate, Berger said.

Even when cutting back, people tend to keep up donations to their house of worship, he said. Local charities are next in line for funding, followed by additional giving at times of crisis, such as the aftermath of Hurricane Katrina.

In the neighborhood

This year, donors may see need in their neighborhoods -- even where it's least expected.

Take Irvine, Calif., a town of about 202,000, where the median household income is $85,624 and the median home value is $712,113, according to the city's Web site.

The number of families served in the food pantry of the local charity Families Forward almost doubled in October, from 155 to 306, said Steve Kight, director of strategic planning and business development. The charity also provides programs that help clients on the road to self-sufficiency, providing them shelter as well as training to get them back on their feet.

Orange County had one of the highest concentrations of mortgage industry jobs, including those at New Century and IndyMac, Kight said. Thousands of those jobs have been lost.

"People who would consider themselves upper-middle class are finding themselves in positions they never would have thought possible," he said. The charity hopes that donations catch up with community need before the holiday season ends.

In the Midwest, Indianapolis Mayor Greg Ballard recently asked local organizations and companies to help with the city's growing need for donations of food.

"Our community food banks are beginning to see a drop in food donations at the point when many of our neighbors are most in need," he said, in a statement posted on the city's Web site, urging citizens to "pack the pantries" of local food banks.

Donating dollars

There's a certain appeal to helping your neighbor. Over the last couple of years, Kight has noticed increased interest in donating to causes that meet the needs of the immediate community.

Donors also are focused on holding local charities accountable: "People want the money to stay local, and they want to know exactly what you're doing with the money," he said.

The desire to keep funds in the community has led to the success of organizations such as Toys for Tots, an annual toy drive for children of low-income families. Annually, between 12 million and 16 million toys are collected through toy drives throughout the country.

"It stands to reason there are going to be more people in the lines to receive help and fewer people in the lines to give help," said Bill Grein, vice president of the Toys for Tots Foundation. Still, toy donations to that charity have been on target this year, he added.

Yet local giving varies throughout the country as much as local economies.

Gifts to education-related causes fall an average 1.9% during recessions, Seiler said.

But in Greenwich, Conn., even an educational cause -- the local library -- is having a good year for fundraising, said Barbara Ormerod-Glynn, the library's acting director. The library welcomes the help: More patrons are checking out materials and there has been an increase in people attending free movie presentations and job-hunting seminars, she said.

In contrast, charitable giving has suffered at the Coalition on Temporary Shelter in Detroit, according to spokesman Tom Martin. Much of the traditional funding for local charities, mainly donations from automobile corporations, has dried up. Meanwhile, many jobs have left the area and workers who remain are uncertain about their future employment.

"Individual folks who were giving to United Way and some of these other fundraising organizations -- they're looking to find out whether they've got a job or not," Martin said.

"We're also facing an increase in the homeless population as the economy goes into this tailspin," he said. "As bad as it is across the nation, it's generally worse here."

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