Traverse City Record-Eagle

October 28, 2013

Donations level off after upswing

Special to the Record-Eagle

---- — TRAVERSE CITY — Charitable giving fell by nearly 18 percent when the 2008 financial meltdown caused the U.S. economy to tumble.

Those who raise money for northern Michigan nonprofit agencies said they've been working ever since to regain momentum, and noted they've witnessed a steady increases in giving for the past five years, followed by a plateau as the economy recovers.

"We have seen a leveling off in donations, which seems to be a trend in the area,” said Father Fred Foundation Executive Director Rosemary Hagan. “In general and nationally, when times are tough, donations to charities like ours goes up … but when there’s an upturn, donations tend to move back to the humanities."

Father Fred serves 62,000 families annually, and last year provided more than $1 million in food assistance alone. Father Fred has a $2.8 million annual budget, including $1.3 million received as in-kind donations, such as those received during food drives.

Contributions and grants account for 90 percent of annual revenue. The organization receives no federal or state funding and is reliant on giving from individuals, businesses and private foundations, as well as its 125 volunteers to deliver services.

Hagan said Father Fred’s donations reached an all-time high in 2010, followed by modest increases in 2011 and 2012. Since then, she said, most donations are holding steady.

It’s too early to see 2013 trends at United Way of Northwest Michigan, since its major campaign just began, although workplace campaigns are noting higher participation, according to fund development director Michelle Krumm. She said the trend during the preceding two years remained level in number of donors and dollars raised.

“It’s been steady, yet the need is so much more,” she said, adding that donations directly impact grants given back to community agencies.

In 2012, United Way had $420,000 to give but received $900,000 in requests. The agency raised $740,000 last year for grants to agencies and its Volunteer Center.

National giving trends show that charitable giving increased 3.5 percent for the past three years, but remains below 2007 levels. Arts and humanities have seen the greatest gains during the past year, while other sectors remained relatively the same, according to Giving USA.

At Old Town Playhouse, development director Betsy Willis is seeing increased giving by individual donors as well as businesses. Program advertising is up 40 percent this season and long-time donors are giving at higher levels, she said.

The OTP budget relies on $100,000 from businesses and individuals.

“It’s trending very positively,” she said. “A great example was our ‘Fund the Need’ campaign during the last gala when we raised $50,000 for building improvements."

Legislatively, there have been changes to some tax incentives during the past several years, in particular the 2011 expiration of several Michigan tax credits and the pending Dec. 31 expiration of the Charitable IRA provision allowing individuals over age 70 1/2 to make roll-over donations from an IRA to a charity without being federally taxed.

Grand Traverse Regional Community Foundation development director Steve Wade said incentives were helpful, but elimination won’t deter donors from philanthropic support of favored causes.

National philanthropy expert and co-founder of the Women’s Philanthropy Institute Sondra Shaw Hardy of Traverse City agreed.

“Although research shows that tax deductions don’t play a significant part in donors motivations for philanthropy, particularly with women, many financial officers discourage gifts unless they are deductible,” she said, noting concern over legislative moves to further restrict tax incentives for charitable giving.

“I see the economy continuing to improve and donations improving, as well,” Hardy said. “However, donors seem to want more education about the nonprofits they support, see more impact from their gifts and know that the things they support are going to bring about change and benefit the community. Good examples are the YMCA, the Botanic Gardens and the barns at the Commons … as well as projects that need completing like the City Opera House.”

“I also see the impact of more and more women in development in Traverse City, and the outstanding job they are doing,” she said. “Women are also stepping up to the place and directing their foundations and their purses in ways they never have before ... and have assumed the responsibility for their personal and family giving.”