A weakening economy and turmoil in the credit markets have begun to affect donations to New York City nonprofits at a time when the services provided by such organizations are needed more than ever, the New York Times reports.
Beyond providing services to the young, the elderly, the poor, and the sick, the city's more than 10,000 nonprofits are estimated to pump some $50 billion in annual expenditures into the region's economy and employ at least 500,000 people. But in addition to severely limiting the availability of credit and squeezing individual donors, foundations, and corporations, the turmoil on Wall Street and economic slowdown are also constraining the availability of government grants and contracts. To make matters worse, some 85 percent of the city's nonprofits have an annual budget under $3 million, and many don't have an endowment or cash reserves to fall back on, said Fran Barrett, executive director of the Community Resource Exchange.
Some of the most affected organizations depended in the past on donations from investment banks and financial firms that have been brought to their knees — or wiped out — by the financial crisis. Citymeals-on-Wheels, which provides meals to more than 18,000 homebound residents each year, has lost contributions from Bear Stearns, Bear Stearns executives, and a host of other donors tied to Wall Street. Those losses and rising food and gasoline prices recently forced the group to cancel a $2 million program. Similarly, the Food Bank for New York City, which provides food to 1.3 million New Yorkers, lost Washington Mutual and Lehman Brothers as corporate donors at the same time that it suffered a $200,000 cut in state funding, a fall-off in volunteers, and a 35 percent increase in the number of meals served over the previous year.
Still, while many New York City nonprofits are worried about the future, the picture isn't universally gloomy. Neither the New York Public Library nor the New-York Historical Society saw a decline in support for their upcoming annual galas. And while some nonprofits may fail, in the long-run "nonprofits are very resourceful," said Lorie A. Slutsky, president of the New York Community Trust. "And New York is a city of very generous people."