The big charity squeeze

Less money to go around, more demand for charity and renewed scrutiny of high-profile fundraising events it's a tough time to be asking others for money. Geoff Collett reports.

It may never be easy relying on the charity of others to help pay your way in the world, but even in that context, 2009 is hardly going to go down as a vintage era for those whose livelihoods depend on fundraising.

Of course, there's the recession and the damage it has done to balance sheets of all shapes, sizes and hues, the not-for-profit and philanthropic sorts included. Less money to go round, in other words, including tens of millions less from the large community and gaming-machine trusts that provide the great bulk of non-government cash for the not-for-profit sector.

The demand for help from the stressed and struggling is only growing as redundancies bite, and now, to cap it all off, there's been a fresh round of public questioning of what proportion of public donations to some charities is finding its way to the worthy cause, and how much is being diverted to pay the costs of event organisers and canvassing outfits. TV3's recent Big Night In Telethon for the Kids Can charity is the latest focus of such scrutiny.

But if anybody is going to know about coping with adversity, the army of charities who hold the community together would be the past masters the acknowledged experts at making each dollar stretch that little further, of continually confronting the challenges of hardship. So, as the recession continues to reverberate, the tough have had to get going.

The Community Support Service run through Volunteer Nelson, the region's volunteer centre runs regular surveys of the community sector to gauge how organisations are coping. Centre manager Jude McNabb leafs through a bunch of recent responses: "Concerned about funding especially for operational expenses ... Will be OK but no room for expansion of services," says one agency working in the disability support area. Another, in the emergency accommodation field: "Positive right now, but concerned about future increases in client load and possible decreases in grant monies." A support agency for a debilitating illness: "Mentally we are well, but the increased pressure around where to source funds is taking more of our paid time in our already limited hours of employment."

It's not crisis stuff, but an anxiety, a "disquiet", as Ms McNabb puts it. The stress is only being added to for organisations that receive money from government agencies.

The Government has changed various arrangements; for example, scrapping some of the three-year funding contracts and reverting to annual reviews, removing the certainty that the charities and welfare groups crave.

"We spend our whole life doing funding applications and accountabilities. It stops us being out there doing what we want to be doing," Ms McNabb says.

There's an anxiety, too, that publicity about professional fundraisers skimming a cut of donations will provoke a backlash, a reluctance to give donations just when they are needed most. The Alzheimers Society in Nelson, for example, writing to The Nelson Mail this week, was keen to make the point that all the money it raised in its recent appeal was going to be spent locally.

Leanne Cummins, the co-ordinator of the Fifeshire Foundation (one of the handful of Nelson-based charitable trusts), says that in the wake of the post-Telethon controversy, she has been conscious of reassuring people "that if they do give us money, it all goes back out in the community".

Judene Edgar is one of the few professional fundraisers working in the Nelson-Tasman region, and points out the distinction between those like her, who belong to the Fundraising Institute and sign up to its code of ethics (meaning, among other things, they are barred from accepting a commission), and the event managers or telemarketing companies who have moved into the sector, helping with donation-seeking on the basis that they take a cut the sort of approach that is rankling the public.

Mrs Edgar says the issues are not always clear-cut: groups trying to raise money inevitably incur costs, fundraising events come with a bill, and somehow they have to pay those bills. In her own case, she charges an hourly rate for services, costs that the groups she works with have to recoup.

Where a fundraising organisation could run into trouble is if it seeks donations it says are for its worthy cause, but then diverts a portion to cover overheads. They have to find other ways: a sausage sizzle may be less fraught than a donations drive, for example, because buying a sausage is essentially a commercial transaction with no particular expectation on the buyer's part as to where their $1.50 will end up.

She is seeing plenty of evidence of the wider pressures facing the not-for-profit sector as the recession bites and funding sources shrink. In her own case, she is getting requests every week from around the country to help groups facing fundraising challenges. Her assessment of the way groups need to respond to the mounting pressures is businesslike.

"Businesses have had to put off projects; not-for-profits have had to, too ... The bottom dollar is, they're in the same economic environment as everyone else. The same pressures are there so there will need to be revisions, cutbacks, and that is happening. The catch is that, depending on the nature of the not-for-profit, some of them too large a percentage provide vital community services."

The Fifeshire Foundation is about as close to the front line of those vital needs as any. While it is not large in comparison with the big national trusts and funding agencies that provide millions of dollars over a year, it is one of only a few substantial Nelson-based charitable trusts (others include the Network Tasman Trust and the George Brown Trust) and dispenses nearly $100,000 a year.

Mrs Cummins says the foundation is focused on meeting crisis and hardship in the Nelson community, and is unusual among charitable trusts in that it gives money to individuals as well as organisations.

Most months, it grants about $8000, but lately the demand has been rising steeply. "Last month, I got 40 applications. That was unheard of. I've been doing this job for 2 1/2 years and when I started, it would have been between 15 and 20 applications."

The 40 requests totalled $32,000; the trust managed to give out $12,000. Many were for the mundane living costs that some families cannot bear; four were for firewood; others for doctor's bills, appliance repairs, dental work (there are always three or four requests from beneficiaries facing unexpected large dental bills).

While demand is clearly up, the foundation is continuing to cope on the income side of its equation. Its sponsors (including Lone Star Farms, New Zealand King Salmon, the Nelson Building Society and More FM) help look after its overheads, and its major fundraising event, a golf tournament, brought in more than $20,000, about the same as last year.

The Nelson City Council, which is about to launch into its community assistance grants allocations, is also seeing sharp evidence of the demand out there. Most of its grants money is put into four-year contract agreements with various community agencies, and this year happens to be the one when all the existing contracts expire, triggering something of a stampede for funding.

Council grants are for organisations that can satisfy the council's broad "community outcomes" and it has requests for almost 3 1/2 times as much money as it has available for contract funding 66 groups have asked for $1.196 million compared with the $354,000 available. Most of them need money to cover their operational expenses, which other grants bodies and funding agencies rarely meet.

Others working at the front line, such as the Nelson Foodbank and the Women's and Children's Refuge, suspect that their profile as organisations dealing with the most urgent and needy cases helps them when donations are tight and people are choosier about where they direct their charity.

Foodbank treasurer Jan Noonan says it has handed out more food parcels this year than in any of the past three, and has had to seek out other grant sources after getting reduced money, or none at all, from some of its traditional funders.

Women's and Children's Refuge manager Trudie Brand says there is "a lot less money around". Its appeal week fell shorter than other years and she recalls a fundraising event, the "Girls Day Out", earlier this year where people were prepared to pay the entry fee but "you could tell they didn't have money to put into the donation tins".

The refuge has had to focus on its core operations and seek more in-kind support, whether gifts of household items or increased volunteer support. Ms Brand is philosophical about the situation. "There's not a lot we can do about it. All we can do is prioritise and focus on looking outside the square, and look at different ways of bringing in different resources."

Some in the sector suspect that the disciplines learned through the current difficulties will stand not-for-profit groups in good stead for the longer term.

"Collaborate, collaborate, collaborate," is the message from Ms McNabb at Volunteer Nelson, an organisation used to urging the not-for-profit sector to work together, avoid doubling up effort, move beyond the patch protection.

Mrs Edgar echoes the sentiment. "It's about going back to those basic principles, of having a budget, having your plan ... looking at ways they can share resources with an organisation and reduce costs."

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