Charities in Southeast Tennessee, North Georgia Feeling Economic Squeeze

Nonprofit leaders in southeastern Tennessee and northern Georgia are worried that the economic slowdown and precipitous drop in equity markets could discourage donations to churches and charities at a time when the services they provide are in great demand, the Chattanooga Times Free Press reports.

Many charities across the region are facing a "perfect storm," with state funding being cut, demand for services rising, and donors less able to give than in the past. Indeed, heading into the most important fundraising season of the year, many groups are just trying to keep pace with last year. Among the five area United Way and Combined Federal Campaign drives in the region, for instance, only the United Way of McMinn and Meigs Counties is hoping to raise more than it did a year ago — although the additional $50,000 matches a fundraising goal that the organization set, but missed, in 2007. Elsewhere, the Greater Chattanooga chapter of the American Red Cross has put out a special appeal to raise $1.2 million by next June; if it falls short, the agency may have to shut its doors.

At the same time, the number of Chattanoogans in need appears to be much higher than a year ago. According to John Hayes, director of the United Way-run 2-1-1 Call for Help, the hotline received 40 percent more calls from city residents during the first eight months of 2008 than in the same period a year ago.

Despite these concerns, say fundraising experts, tough economic times generally don't hurt giving to churches, social service agencies, and faith-based programs as much as they affect donations to education and the arts. "On average during a recession, our research indicates that giving usually falls by about 1 percent," said Melissa Brown, associate director of research at the Center on Philanthropy at Indiana University. "But usually faith-based giving and contributions to United Way agencies remain pretty steady. The big, big gifts are still coming, and if the market bounces back like it did in 1987 [after what was the worst one-day drop ever], then we may not notice any difference in giving."

Dave Flessner. "Chattanooga: Charities Caught in Fiscal Squeeze." Chattanooga Times Free Press 10/08/2008.