Region's charities face murky future

Here come the holidays and their perennial philanthropic push, the bread-and-butter fundraising days of many local nonprofits.

"A large portion of charitable contributions happen in December, just in general," according to Justin Pollock, chief operating officer of Maryland Nonprofits, the state's association of charitable organizations.

The holiday spirit and the end-of-year tax incentives for giving are always great for charity coffers, Pollock said.

But in a lagging economy, and despite national and local data that show nonprofits have proved to be highly resilient amid the downturn, Pollock said there is still plenty of concern among organizations that their already pinched purses won't be refilled this winter, at least not to the extent of years past.

In all, the future of nonprofits — in Baltimore County, in Maryland and across the United States — is a murky one.

They are holding their own, Pollock said, but being asked to do more with less.

"It's still time to keep digging in," said Betsy Nelson, president of the Association of Baltimore Area Grantmakers.

Nelson said her association's member organizations – foundations, funds and corporate grant making programs – are currently dealing with the reality that the volatility of the market, once assumed to be a "blip," isn't going anywhere any time soon.

"It is still tough out there," she said. "We'd hoped by now that we'd be out of the recession, and maybe officially we are out of it, but in our own individual lives that doesn't necessarily ring true."

The picture doesn't look so bad if you consider that, even as the nation's overall unemployment rate shot to more than nine percent, Maryland's more than 30,000 nonprofits have added more than 22,000 jobs since 2005, bumping the state's total number of nonprofit workers to more than 250,000 people who account for about 11 percent of the state's entire workforce, according to Maryland Nonprofits' 2010 Nonprofit by the Numbers report.

More locally, Baltimore County's more than 4,000 nonprofits saw 4 percent overall job growth in 2009, paying more than 36,000 workers $1.5 billion in wages – accounting for 10 percent of the county workforce and almost 8 percent of overall county wages, according to the study.

Nationwide, nonprofit employment has seen similar growth, according to a report released in September by the Johns Hopkins Nonprofit Economic Data Project.

Nonprofits nationally saw a 1 percent increase in employment between 2009 and 2010 and almost a 5 percent increase between 2007 and 2010, according to the study. In contrast, the for-profit sector between 2007 and 2010 saw more than an 8 percent drop, the study found.

The future for nonprofits looks darker, however, if you consider the "triple whammy" of threats that they are facing in 2012, Pollock said.

First, there are the poor markets, which have diminished endowments and the ability of grant-making organizations and foundations to dole out funding to smaller organizations, Pollock said. Second, there is the 10 to 15 percent decrease in giving among individual donors that local organizations have seen in the last few years, he said. Finally, there are the cutbacks on funding from government agencies at the local, state and federal levels that have both already occurred and are expected to increase, Pollock said.

"That's the scary picture," he said.

"If you make a judgment one day, stay tuned next week because you could have lost 5 percent of your assets," Nelson said of the uncertain markets.

Still, the government cutbacks are the "biggest red flag" right now, Pollock said, especially among organizations that receive government funding to provide "essential services" like shelter, meals and health care to area residents in need.

"They are anxious and concerned, because they could see a fall in their revenue models, and many of these organizations have very little room for absorbing anything like that," he said.

Nelson said organizations are taking a more long-term approach, and that there has been "a desire to counteract the craziness of the market, and that you can't just panic and make a decision based on one day."

Larger organizations that have strong, loyal donor bases are doing fine, and even smaller organizations will survive into the future because "one of the truisms for nonprofits is that they are very resourceful organizations" that "know how to leverage every dollar they get," Pollock said.

Even as those dollars decrease, nonprofits will be able to stem the effects by increasingly relying on commitments rather than contributions, he said.

"I think what we're likely to see moving forward is that organizations are going to be turning to those nonfinancial resources, probably looking to volunteers a little more," Pollock said. "Looking at the overarching need that seems to be getting created now, I wouldn't hold my breathe that the nonprofits can solve it in its entirety."

And that's where we all come in, he said.

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