Although corporations reported a 7% increase in grant-making in 2007, nearly a third of corporate foundations expected to reduce their giving in 2008, according to a report published last week by the Foundation Center in New York.
Already, corporations have cut back on discretionary spending and reined in budgets, said Aaron Dorfman, executive director of the National Committee for Responsive Philanthropy, a Washington-based watchdog.
"We are seeing nervousness among nonprofits of all sizes -- nervousness about what the downturn in the economy is going to mean in terms of being able to attract donations," he said.
Officials at smaller New York charities aiding the elderly, the poor and the homeless are particularly concerned that they will soon find themselves in a bind: less money for a growing demand.
City Harvest, an organization that feeds 260,000 New Yorkers every week, reported a 24% increase over last year in the number of people needing help.
And both City Harvest and Citymeals-on-Wheels are contending with the rising cost of food and fuel for transportation in delivering their services.
"We are being cautious, and I think prudently so," about next year's budget, said Patricia Barrick, a spokeswoman for City Harvest, referring to next year's budget. "Anybody who's not being cautious isn't really reading the paper."
Some clues also arrive in the mail.
Harriet Karr-McDonald, chief development officer for the New York-based Doe Fund, a job and shelter resource for homeless people, said she received a letter from a longtime Wall Street donor last week "saying, 'I'm sorry. I've lost my job. I can't make a commitment this year.' "
As Wall Street writes off billions of dollars in losses incurred in the sub-prime market, there's also less tax revenue in city and state coffers and, in turn, less money for public assistance programs.
The Chronicle of Philanthropy, the industry's leading newsletter, published a report this year saying many social service charities "are facing increased demand and such a severe budget crunch they may have to lay off workers.
"Rising gas and construction prices are adding to the challenge of financing services and expansion plans that numerous charities have underway."
Holly Hall, who coauthored the report, said she had spoken to nonprofit officials who "practically cried on the phone."
The country's top private donors will probably keep up their level of giving, in part because they are more insulated against the economic turmoil by the sheer size of their wealth.
But the richest donors tend to give to universities, hospitals and the arts rather than feeding the hungry and helping the poor, Hall said.
"It's not that wealthy people are heartless, but it has something to do with how well an organization can manage a big gift," she said.
Stein, for her part, will continue to reach out to Wall Street.
"You can decide to delay a wing on a museum," she said. "But how can you delay to get a meal to someone who can't get out and shop?"
--
louise.roug@latimes.com
