Competition Stiffens for Donor Dollars

David Finegood is a marked man. In the parlance of charity organizations, he is known as a “giver,” a guy who freely donates hundreds of thousands of dollars to causes.

The 67-year-old furniture maker said giving is a family tradition. But while he donated to about 400 agencies this year, he did not even come close to satisfying the intense financial demand.

“Once your name is on someone’s list, you’re not forgotten,” said Finegood, whose main interest is Jewish philanthropy. “I probably receive two fund-raising appeals a day in the mail. Everyone is looking for something.”

The competition for donor dollars has been especially fierce in Los Angeles this year, as charities and nonprofit groups have strived to meet fund-raising goals in the face of plunging stock prices, changing tax codes and general belt-tightening.

Most of the major organizations hit their targets. But consultants say that they also aimed lower and expected less. Florence L. Green, a partner in the fund-raising consulting firm of Green, Scribner and Co., said most nonprofit groups were happy just to get by this year.

“A lot of the charities didn’t get the kind of increases that they (hoped for),” Green said. “Donors are being more cautious . . . and it’s a very competitive climate.”

In the spirit of competition, some charities and nonprofit groups tried to bolster their bankrolls with innovative fund-raising appeals. The Los Angeles-area Girl Scouts chapter held a gala benefit honoring every major achiever dating back to 1940. Others joined in promotional campaigns with credit card companies that returned a small percentage of their profits to the charities.

Minority Contributions

There were also appeals targeted at minorities and accelerated mail campaigns in which donors were reminded that tax deduction rates would be dropping after this year. Meanwhile, the Salvation Army and others that relied on time-tested techniques tended to come up short.

Russell Prince, the Salvation Army’s director of development, said donations to the group’s red Christmas kettles were down by more than 20% this year due to a shortage of volunteer bell-ringers and new regulations that barred them from many shopping malls. Toys for Tots also suffered from a severe toy shortage until the news media reported its plight.

Other nonprofits were jolted by the aftershocks of the October stock market crash. Dr. Sanford M. Shapero, president of City of Hope, said one major donor called to say that the $500,000 in stocks he had pledged to the group had dropped in value to $50,000. At the same time, smaller contributions were up, allowing the group to reach its $105-million goal.

“Several large donors who were supposed to give gifts at the end of the year can’t give them now,” Shapero said. “But the small donors have responded magnificently this year.”

Too Soon to Tell

Charity analysts say it is too early to analyze the full impact of the stock market decline on giving this year. But, like City of Hope, many charities were expected to experience a decline in major donations and become increasingly dependent on donors who give $50 to $250.

These donors, who are less affected by stock prices and taxes, apparently provided the backbone of support for many charities in 1987. The United Way of Los Angeles, which was smacked with allegations of impropriety last year, is now well on its way to reaching its $85-million fund-raising goal, thanks in part to the support of about 50 chambers of commerce in the San Fernando Valley that were brought in as fund-raisers for the first time.

Next year the organization will try to recruit more minorities and small businessmen. Leo Cornelius, the president, said marketing is playing a larger role in fund raising. “We’re using target marketing, identifying groups that have not been participating in United Way,” Cornelius said. “Drawing people’s attention is really one of the major hurdles.”

Increase of 6%

Tony DeCristosaro of the United Way of America said the Los Angeles branch ranked fairly well this year among cities. Donations rose about 6% locally, which mirrored the national average. On a per capita basis, however, the city fared poorly. Los Angeles residents gave an average of $8 per person, while the national average was $16. Charity analysts say that Angelenos are traditionally less giving because they are less grounded in their community.

“It’s a difficult community in which to raise money because it isn’t home,” Green said. “Fund raising is based on tradition and you would be hard pressed to find many people who have lived here all their lives.”

In the battle to maintain budgets, some groups are streamlining. The Los Angeles chapter of the American Heart Assn. closed two of its branch offices this year in an effort to cut costs. Ronald J. Kensey, the group’s vice president of development, said officials feared that economic factors like the stock market crash would lead to a drop in donations. So far, however, the group is on target. Officials expect to reach or surpass their $4.8-million goal.

‘We Are Working Harder’

Kensey said the major difference this year is that people are more concerned about how their money is used. “We are working harder in terms of making it clear why people should donate to the American Heart Assn.,” he said.

At the city’s Music Center, fund-raisers kept pace with their goal by doubling the number of small donors. Esther Wachtell, the center’s vice president, said the group is well on its way to meeting its fund-raising target of $13 million for the fiscal year.

The donation of discarded items to Goodwill Industries was also up slightly this year. Nick Panza, president of Goodwill in Los Angeles, said the group has received about $9.6 million in donations. That’s $500,000 more than last year, according to Panza.

Pamela B. Brooks, executive director of the Brotherhood Crusade, said her organization held steady in 1987. Part of the $2-million operating budget was derived from a ritzy “Pioneer Black Achievement” award dinner-benefit this month honoring boxing promoter Don King.

Exceeded Their Goal

Edward C. Jacobs, president of the Los Angeles-area council of the Boy Scouts, said his group will exceed its $5.2-million goal. “Our constituency has been very generous to us,” Jacobs said. “We haven’t experienced any of the doom and gloom that people predicted.”

One of the most successful 1987 fund-raising efforts was mounted by the Jewish Federation Council, which took in about $46.5 million. Board president Stanley Hirsh said giving was up over the previous year by about 16%. He added that many major donors gave gifts of stock before the October crash. “There’s a lot of talk about the economy and we have fears like everyone else’s fears,” Hirsh said. “But so far the momentum is good.”

Like Hirsh, however, many fund-raisers are apprehensive about the future. Jack Shakely, president of the California Community Foundation, a group that manages contributions for nonprofit agencies, said the stock market fall and the declining income tax deduction rate may put a substantial drain on contributions if economic conditions do not improve.

Drop in Contributions

Some charities have already experienced a decline in end-of-year contributions, which are usually hefty. And others foresee more trouble ahead as the tax deduction rate drops from 38.5% to 28% and investors reassess the damage to their portfolios. “I cannot possibly believe that the stock market decline and the reduction of the income tax bracket will not have an impact,” Shakely said. “It’s inevitable that there will be some decline.”

Green, the Los Angeles-based consultant, said donors may also feel overwhelmed by the sheer volume of appeals for cash. Charities and nonprofit foundations, she said, will have to work harder and be more accountable to donors who will demand to know where their money is going.

But some major benefactors are not so sure. Joseph D. Shane, an 81-year-old Beverly Hills businessman, said those who have a commitment to giving will continue doing so, even if it takes a bigger bite out of their bank accounts.

Shane calls himself a “professional giver.” He supports 40 or 50 charities and has also worked as a fund-raiser himself for causes he is drawn to, such as the United Jewish Appeal. “I give a lot because I can afford it,” Shane said. “What the hell else can I do with my money, buy another automobile? At some point money is superfluous. So why not do something important with it?”