Charities Fail to Make Up for Lost Government Funds

Generosity in giving to nonprofit groups varies widely from one community to the next, according to new research suggesting that “a thousand points of light” cannot be counted on to make up fairly for government cutbacks.

The study, one of the first to compare levels of contribution in different cities and suburbs, found differences of as much as fiftyfold in average rates of giving to such well-known charities as United Way.

People in Los Angeles tended to be less generous than San Franciscans. People in smaller cities gave more than those in big cities. Liberal communities tended to give more than conservative communities.

The study also found differences in how donations were used: Suburbanites, compared to city dwellers, targeted more of their gifts to so-called amenities such as arts centers, and less to services for the needy.

The findings suggest that when federal and state governments freeze or cut funding for human services programs, as they did in the 1980s, nonprofit groups should not be expected to equitably take up the slack.

“They can’t be relied upon to provide the truly charitable services . . . targeted primarily to the poor,” said Julian Wolpert of Princeton University, author of the study. “We really need government.”

Wolpert, a professor of geography, public affairs and urban planning, set out to examine, among other things, the ability of the highly decentralized nonprofit sector to respond to cutbacks in government programs.

Wolpert studied donations made to a number of major charities in 85 metropolitan areas over the past two decades, The charities ranged from the Jewish Federated Campaigns to the American Kidney Foundation to public television.

He also studied reports filed with the U.S. Internal Revenue Service by nonprofit groups in order to estimate roughly the share of contributions going to human services as opposed to amenities.

Wolpert presented preliminary findings last month at a meeting in San Antonio of the Independent Sector, a coalition of about 850 foundations, corporate giving programs and national voluntary organizations.

“He made astute observations,” said Virginia Hodgkinson, the group’s vice president for research. Nonprofit groups, she said, cannot be expected to redistribute wealth across the nation to where it is needed.

“That’s one reason why government does have to stay involved,” said Ann Kaplan of the American Assn. of Fund-Raising Counsel. “A progressive tax system that does, in some sense, try to redistribute money from those who have it to those who need it is essential.”

Total philanthropic giving in the United States has grown steadily over the past 30 years, Kaplan’s group has reported. In 1991, the latest year for which statistics are available, it amounted to $124.77 billion.

More than half of that money went to support religion, statistics show. Slightly over 10% went to education; 8.5% went to human services, 7.8% to health, 7.1% to the arts, and the remainder to other causes.

According to Wolpert, it has long been believed not only that Americans are generous, but also that nonprofit organizations are highly effective in delivering services to those who need them most.

His findings, however, seem to challenge those notions.

Wolpert found that generosity varied widely within income, social and demographic groups as well as from place to place. The variations affected not only how much people gave but also how they targeted their contributions.

For example, Wolpert found an eighteenfold difference between average United Way contributions in 1972 in the most- and least-generous places. He found a fiftyfold difference in rates of donation for kidney research in 1990. Giving tended to be highest in smaller metropolitan areas, with populations of 500,000 to 1 million. It was also higher in less populous states and where per capita income was relatively high and “distress levels,” or poverty, low.

Areas represented in Congress by politicians rated by the American Conservative Union as more conservative tended to be less generous than areas represented by politicians rated more liberal.

Wolpert also found variation in the share of donated money that went to human services. The share was smallest in the largest metropolitan areas “and where poverty is most pronounced,” he said.

Yet donors to central-city nonprofit groups in general targeted more of their money to human services than did suburbanites--25% compared to 18%--a finding that is significant when more and more Americans are opting for suburban life.

“They are essentially providing services that the donors themselves make use of--the new suburban museum, hospital, public school or performing arts center,” Wolpert said in an interview.

According to Wolpert, philanthropists have long believed that the nonprofit sector cannot adequately address poverty. Since the Depression, federal and state government have taken the lead in addressing the problem.

But in the 1980s, governments began freezing and cutting back spending on programs such as welfare. President George Bush suggested some of the slack be taken up by volunteerism, the so-called “thousand points of light.”

“In the past 10 years, voluntary organizations have had to jump in,” said Katie Burnham, executive director of the Society for Nonprofit Organizations. “It’s really an abandonment by the government of what was assumed to be their responsibility.”

Measures of Generosity

A Princeton University study found significant differences in charitable giving among U.S. metropolitan areas.

This chart shows how 11 cities gave to three major nonprofit organizations--United Way, the Council of Jewish Federations and the American Foundation for AIDS Research.

United Way figures represent per capita dollar contributions, Jewish Federation figures are per Jewish resident and AIDS figures show the percentage of donors per capita. *

CITY UNITED WAY JEWISH FED. AIDS (per capita) (per Jewish resident) (% of donors per capita) Boston $38 $120 0.62% Chicago $33 $218 0.55% Cincinnati $60 $241 0.34% Cleveland $69 $387 0.36% Columbus, Ohio $59 $417 0.37% Los Angeles $22 $101 2.22% Miami $24 $ 80 0.82% New York City $26 $ 73 NA San Francisco $28 $137 3.15% Tulsa, Okla. $55 $808 0.24% Wilmington, Del. $62 $136 0.32%

* United Way figures are from 1989; other figures are from 1990.

SOURCE: United Way of America, Council of Jewish Federations and American Foundation for AIDS Research.