Challenging Charities
By Frizell Bailey
The nation’s poverty rate rose for the third straight year in 2003. According to a Census Bureau report released in September, 35.9 million Americans were living in poverty, up 1.3 million from the previous year. Most alarmingly, that figure includes 17.6 million children.
The Census Bureau report supports what those in the business of meeting the needs of the poor and homeless have known for several years. The demand for emergency food and shelter is on the rise. Unfortunately though, the same factors generating this increased need are also having an adverse effect on charitable giving. As a result, organizations that require such funds to feed, clothe and house those that have fallen on hard times are, in many instances, finding that overall contributions have declined in the wake of record donations in the late 90’s.
Vital Source recently spoke with three local charities who provide food, shelter and other services to citizens in need to gain a clearer understanding of the rising demand/declining resources situation in Milwaukee, and to learn how those organizations have worked to meet the challenge.
Hope House is a homeless shelter near downtown Milwaukee. In addition to providing emergency and transitional housing for individuals and families, Hope House also provides health care, childcare, emergency food service and educational services for youth and adults.
“One of the trends we have been seeing is the decrease in government funding allocations that Hope House has in the past relied upon” says Kirk Stone, Fund Development Coordinator. He says funding from government agencies for charities has been dropping since 2001.
This has been particularly difficult for Hope House, since government funding typically covers over half of their operating budget. To compound the problem, they have also seen declines in other revenue sources.
“School-based giving is down and corporate giving is down. We are starting to see a greater increase in the dollar amounts of individual gifts that are coming in, but from 2001…the total number of individuals who have been giving is down” says Stone.
The same paradox holds true for foundations. “Foundation gifts have increased in terms of dollar amount (per capita)” says Kirk. “But the (number of) organizations that are giving and the organizations giving specifically to homeless issues has been decreasing.”
Working with less.
Hope House has had to scale back its staff as a result of their funding crunch. According to Executive Director Ken Schmidt, they have tried to make cuts that don’t directly affect services. It hasn’t been easy.
“In 2002 we lost $85,000, which we made up through our fund balance. Most of our cuts have been on the administrative side. For example, I no longer have a secretary. It’s kind of a catch-22 because I should be spending more time raising resources, but I’m doing more administrative work.”
Their youth education program, for example, used to be funded partly through literacy grants from the W2 program. The state has been forced to cut these grants due to budget shortfalls, so Hope House has been forced to attempt to fund this program solely through solicitation. Schmidt also shares that they have had to cut some of the homeless prevention work they used to do, which was also funded by W2 grants.
In the past, Hope House has also received funds from the State Shelter Subsidy Grant Program, which hasn’t seen an increase in funding since its inception in 1991. And with more demand for emergency housing and a subsequent increase in shelter beds around the state, fewer and fewer dollars make their way to Milwaukee.
“Right now we’re probably at 60�f what we used to have six or seven years ago,” says Schmidt of the grant.
“Niche giving” limits flexibility.
The overall decline in funding is only part of the challenge. They have also seen an increase in number of government agencies, foundations and corporations targeting their giving dollars towards specific programs. This limits the organization’s latitude to use funds as needed.
“It’s becoming stricter as to how the funds are utilized. The days of unrestricted dollars from these organizations are over,” according to Stone.
With this in mind Hope House has started a new campaign called a Room With a View to help fund the family floor of the shelter.
“We’ve been able to really specify where these funds are going if you donate to our Room with a View program.” It’s been popular with donating agencies, as has the sharing of Hope House residents’ personal stories.
“If you’re participating every month you get a personalized story from the floor. Some of the stories are success stories, some are not so successful, but they’re real stories” Schmidt explains.
More need for the Force.
Hunger Task Force (HTF) is a local food bank that collects and distributes food to meal programs, food pantries and homeless shelters. They also help individuals and families gain access to government programs that can help them out of poverty. Their situation is almost the converse of Hope House’s.
HTF Communications Coordinator Sara Luke says that while foundation giving has slowed, they have seen an increase in donations from corporations and organizations.
“It’s not dramatic, but it’s coming back up. Corporations are up about 18�Foundations are down. I think they’re still feeling the hit from economy going bad. Their money is based on investments. Organizations are up, meaning churches and schools, about 27�Individuals have stayed pretty steady.”
Unfortunately, demand has been on the increase at HTF as well. Luke blames a weak economy and unemployment as well as the inability of those who do work to make a living wage.
“There are people that have lost their jobs. There are families that have two incomes but just aren’t making a livable wage. So poverty is increasing. Gas costs are increasing. Utilities are increasing. So while we’re getting more (in donations than in the two previous years), our demand is higher.”
The accidental “illegal” cheese caper.
At times, HTF has had to be extremely creative in finding solutions to the problem of hunger in the city. Like last year when they were trying to decide what to do with a surplus of dried milk. Most people, especially kids, don’t like to drink it. It was just piling up. They learned that dried milk is a key ingredient in mozzarella cheese. So they found a local producer and delivered a truckload of dried milk. The producer kept part of the cheese as payment for the production and turned over 10,000 bricks of mozzarella to HTF. It seemed perfect. There was just one small hitch.
“Well, you can’t take a government commodity product and turn it something else and not pay for it” says Luke. “If we could use all this dried milk to make cheese, the cheese manufacturer wouldn’t have to buy it. I think they were worried about us putting dairies out of business. But it just so happened that, in Wisconsin, strangely enough, there was a dry milk shortage (at the time).” HTF was granted one-time permission for their action without penalty.
Hunger Task force has also partnered with the Milwaukee County to help fund the prison farm program that has been facing cuts year after year. The farm uses volunteer inmate labor to grow produce, raise fish, and distribute firewood.
“They’re looking to slash the budget,” states Luke simply. “So we said ‘we’ll get some money. We’ll help find private funding and maybe some county funds.’ But it can’t all come from county funds because everyone’s asking for county funds. It can’t all come from private funds either, but how can we all work together to keep this in operation? We’ll all give a little and keep this going. So that’s another way we are trying to find more creative solutions.”
New challenges for Second Harvest.
America’s Second Harvest of Wisconsin is one of 200 affiliate Second Harvest locations throughout the country. They serve 36 counties in the eastern half of the state.
Second Harvest does not depend on the government or foundations for funding and food donations. It all comes from manufacturers, retailers, growers and canners. Most of their monetary gifts come from corporations and individual donors. According to Second Harvest Communications Manager Gina Styer, monetary donations are down over last year, but they are still on target to meet their overall goals.
“Gifts from individual donors are down this year, but we are on pace to meet what we raised last year, which was $1.3 million for our food fund.”
Competing with dollar stores.
Second Harvest has been hardest hit in the area of food donations by a new secondary market for some of the food that once ended up in their warehouse.
“Food donations have been down throughout the country at Second Harvest-affiliated food banks because there is now this huge secondary market. Food that was once typically donated to food banks through manufacturers, retailers and distributors is now being sold to places like dollar stores. So we are having to find new ways to fill our shelves,” says Styer.
One of those new ways is through Value Added Products or VAP. This program allows larger corporations and organizations to sponsor specific truckloads of food.
“Maybe they get their logo on the side of the truck, so that as they cross the country bringing the food to Second Harvest there is a direct link to the company that’s paying for it.”
Second Harvest has also seen an increase in need. They have distributed 13.5 million pounds of food this fiscal year, a million pounds more than last. Styer says they see a lot of working families in need of assistance.
“Almost 42 of the families that access our food on a daily basis have one adult working. That’s typically somebody in a low-paying job, and because of that low-paying job they are still struggling to make ends meet. Those are the people who are struggling with the decision to buy food or pay rent.”
All three organizations stress that there really is no such thing as a small contribution. You don’t have to be a millionaire to make a difference. Kirk Stone at Hope House sees such donations as vital to their continued success.
“We really need to increase those $10 and $25 gifts. Everyone can make a contribution, not just a financial one, not just an in-kind donation or service, but they can pass along the word.”
As for where they’d like to be in two years, all three organizations were in agreement there as well. Sara Luke with Hunger Task Force expressed it this way:
“We’d love to be at a point where there were enough programs out there where people could go to the grocery store with their food stamps or earned dollars. We would love to put ourselves out of business.”
End note: Check out our Giving Guide for more information on contributing to these and other organizations who work to meet the critical needs of Milwaukee’s disadvantaged individuals, families and children.
