By Michael F. Carmichael
February 5, 2009
With the state unemployment rate at near-record levels and the automotive industry threatening to add to the total, Corp! wondered if private and corporate giving could handle the anticipated needs of people who had reached the end of their personal resources.
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We talked to Sue Nine, one of many people in southeastern Michigan who spend long hours and a lot of their own personal resources guiding local charitable organizations. Nine, the wife of a prominent Detroit area attorney, has served on the boards of Boys & Girls Clubs of SE Michigan, the SE Michigan Chapter of the March of Dimes, the American Lung Association of Michigan, Detroit Symphony Orchestra Hall and the Kresge Eye Institute, among many others.
She told us, “It’s true that philanthropy has seriously declined and it does make agencies extremely nervous. Most of them have put their annual appeals out early this year, probably in an effort to swell their coffers, which they have to do because they are really feeling the onslaught of the diminished return. Automotive was so singularly important here - and not just because they kept people working here, but because they were the major contributors frequently to the projects in this area. That also has dried up, so charities here get a two-pronged attack on their balance sheets and their ability to deliver services,” she explained.
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We asked about the status of United Way for Southeastern Michigan which Corp! wrote about in February 2007. At the time of this story, United Way was still in the process of finalizing its budget and could not answer our query about allocations for 2009.
Nine said, “Historically, United Way has been a pass-through agency. They would get their funds from corporate donors and then from thousands of employees via a payroll deduction plan, the check-off idea. For several years that amount has been going down steadily. This year it went down precipitously. Because of that, they’ve had to limit the way their funds will be disbursed.”
How the SE Michigan chapter of the American Red Cross is coping
Nine continued by using a specific example of an organization she has served for eight years. “This necessarily more limited focus has hit some agencies rather hard. Take the American Red Cross-SE Michigan Chapter for example. Four years ago the Red Cross got $4.2 million from the United Way and they were traditionally the largest recipient. That got reduced over the last couple of years to $2 million and we [Nine is on the board of the Red Cross] cut everything that wasn’t basic out of the Red Cross programs in an effort to stay alive. Because the Red Cross could only qualify for about $600,000 from United Way, that would have been a 70 percent reduction in the budget of an agency that the public assumes will always be there. The Detroit Red Cross, for example, attends more fires than any city in America; we have an average of seven house fires a night. The Red Cross is at every one of those. We give the families involved their night’s lodging, a small stipend to live on for a couple of days until they can get oriented with help from another agency or their church or whatever.”
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According to the Southeastern Michigan’s Red Cross chapter, it helped nearly 5,500 people recover from home and apartment fires in the Wayne, Oakland and Macomb counties in 2008. “Our chapter has the busiest disaster services department in the country,” said Laura Loughridge Wargo, chief development officer for the Red Cross, Southeastern Michigan chapter. “Only the city of New York comes close to the number of people we serve. The current state of our economy has only made a bad situation worse.”
Nine then explained that the Red Cross was unable to continue its relationship with United Way. “We’ve beefed up our development staff in an effort to disengage ourselves. This is obviously a big change in the way we do fundraising here and who is going to do it.”
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Andrea Tomaszewski, spokesperson for the Red Cross, concurs. “With the economic situation in southeastern Michigan and the pressing need for disaster services here, we have a need for more funding so that we can continue to provide these critical services.” One of the ways the Red Cross is seeking added help from the community is by reaching out to individual companies for specific non-cash donations. Recently, as one example, Quicken Loans and its employees donated 222 clean blankets, along with more than $6,000, for use by the Red Cross in aiding disaster victims.
Western Michigan faces similar challenges
On the other side of the state, Heart of West Michigan United Way funds 116 programs at 51 local agencies, and provides programs for the community including United Way’s 2-1-1 telephone information and referral program, Schools of Hope, Volunteer Center and Kent County Tax Credit Coalition. They, too, have been impacted by the state’s financial woes.
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“We believe the economic climate played a major factor for many people at all levels of organizations,” says Janine Johnson, vice president of marketing. “This year’s campaign results - and challenging economic conditions - affected rank and file employees as well as long-time leadership investors. The campaign was also affected by declining industry sectors including automotive, financial and manufacturing.”
Johnson continues, “However, just as Heart of West Michigan United Way has broadened its impact in the community in terms of the programs it funds and supports, it has also broadened its funding streams. This is the first year we are reporting results based on all resources generated. While we continue to believe our annual campaign is one of the most important ways people in our community can help to build a stronger community and to improve lives, we are also focused on raising financial and volunteer resources in other ways including grants and bringing dollars back directly to people in our community.”
Changing conditions require new approaches
Facing a sea-change both in economic conditions and in the way people work, Johnson explained, “In 2008, Heart of West Michigan United Way’s board approved a new three-year resource development strategy which transforms our resource-raising to a relationship-based model to become closer and more relevant to our donors. While workplace campaigns will remain a critically important element of our fundraising strategy, we are implementing a process driven by strategies to build donor retention, grow leadership giving and address participation issues.”
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“We restructured our work in response to many factors,” Johnson continued, “including the changing workforce, the economy and the desire to deepen relationships with our donors. The economy and the workplace are different than they were in the past, and we are changing our model to adapt. In years past, many people started their careers with one employer, had limited career movement to other employers, and retired. Today’s workforce model brings much more career and workplace changes for people. To ensure that we connect with individuals, as well as corporate donors, we are developing ways to provide opportunities to interact throughout the year.”
A cause for tempered optimism
Sue Nine is optimistic about the future of charitable giving in southeast Michigan. She says that, “Americans will certainly rise to the challenge. We’re the most giving people on earth and no country in Europe or Asia gives as much as American does to charity - and Detroit has historically been the most ‘giving’ city in America. Now, however, I suspect we will end up with a smaller nonprofit market, a market that will be a lot more inventive than we’ve been in terms of fundraising and distribution. We’re lucky as Americans in that we have traditionally been such believers in helping that, even in the days of the Great Depression, we did philanthropy even when nobody else did it. No matter how little there is, there’s always a way to share,” she concludes.
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The Michigan Nonprofit Association, in cooperation with the Johnson Center at Grand Valley State University, surveyed more than 300 nonprofit organizations statewide for a report published in October that corroborates Nine’s impressions. The report found that nearly 80 percent of the organizations surveyed were facing an increase in demand for their services, with 96 percent of social service agencies reporting an increase. At the same time, 90 percent of agencies statewide reported a decrease in funding.
Fewer black tie fundraisers
Bloomfield Hills resident Nine continued to describe the state of charitable giving in the southeastern Michigan area. “St Vincent DePaul is a Catholic charity that gives non-denominationally,” she pointed out by way of example. “It has had an eight-fold increase in demand just this year.” She also pointed out that the way in which funds are being raised is changing. “There’s a change too in the way fundraising events are held Not all that long ago black tie was mandatory. Now more and more it’s business casual. It’s a recognition that people are more concerned about a more limited amount of money and where it’s going rather than setting a fashion trend. Unlike a lot of big cities much of our social life centers around fundraising events, but they way those look is certainly changing,” she observed.
Looking into the future, Sue Nine says, “It’s a tough, tough market out there and I don’t see it improving for a year or two, especially until this automotive situation settles out. If it doesn’t that’s another ballgame entirely. If it does, we’ll still see fundraising slow, maybe the neediest of the projects will be funded first. Human services will probably get more than other kinds of programs. We will always do things that will help children have a better chance. At the other end of the scale, we will also continue to aid the elderly.”
Some advice to charitable organizations
She offered this advice for any charitable organization, particularly in today’s economy, “I always tell people to make sure your goals are attainable but still something of a stretch. Realistic goals are going to become increasingly important over the next few years - partly because you can’t get people to volunteer to work on projects where the goals are unrealistic - and partly (and I hate to say it) because the people themselves may just not be there.”
