Holiday Giving Not Keeping Pace With Need, Charities Say : Aid: This is traditionally the peak season for donations, but groups are caught between a rising demand for services and the economic worries of middle-class contributors.

With Christmas only one week away, charitable groups from Virginia to California are feeling the familiar pressures of the holiday season: a reluctance among donors to open their wallets, coupled with an increase in demand among the needy for services.

“We have gone into the holidays in the worst shape we’ve been in for years,” said Stephen Burger, executive director of the International Union of Gospel Missions, the umbrella organization of inner-city rescue missions.

“Most of the missions we’ve heard from are going into the holidays with donations down 15 to 20%,” Burger said. “. . . Last year, the holiday season did save us. This year, the jury is still out.”

The period between Thanksgiving and New Year’s Day traditionally is when many charities receive most of their donations. But officials from large and small agencies--from the Salvation Army to local family shelters--are reporting concern over their ability to balance rising demands with the level of charitable giving.

There have been some good signs during this holiday period: More businesses are adopting schools, preparing holiday baskets or collecting toys and canned goods. And more individuals are donating money and time now that they believe the economy is improving.

But around the country, it is not clear whether the recovery can keep pace with the increasing need.

* In Southern California, the Lutheran Social Service’s Refugee and Immigration Service had to shut down its immigrant counseling service for lack of funds because contributions have been diverted to earthquake and other natural-disaster relief.

* In Grand Rapids, Mich., Salvation Army Col. William Roberts reports that all initiatives his group funds--from emergency shelters to substance-abuse programs--will “take a small hit” next year because collections are not keeping pace with needs.

* In Alexandria, Va., the national Salvation Army reported a 5.6% drop in mall and street corner cash donations in the first week of its annual kettle drive. Meanwhile, the group has seen a 6% increase in the number of people seeking help over the holidays.

“We are at a point in the Christmas season where we can see a downward trend in the giving pattern,” said Col. Leon Ferraez, the Salvation Army’s national communications secretary. “This year we anticipate helping 7.4 million people. There is a real concern we may not meet the needs of the people.”

Ferraez said that while non-holiday giving has risen for the Salvation Army, cash donations since Thanksgiving have suffered. He believes the reason is economic uncertainty among the middle class.

“Yes, the economy is good,” he said, “but many people, average working people, are not keeping up. There’re a lot of new jobs, but they’re all at minimum wage. Both people have to work and that makes it hard.”

Earlier this year, Independent Sector, a national alliance of philanthropic groups, blamed Americans’ sense of economic insecurity for an estimated 11% drop in giving over the past four years.

In Grand Rapids, the Salvation Army’s Roberts said the main reason for the decline in holiday cash donations was a decision by a major retailer to bar bell-ringing volunteers from its store properties. Despite an increase in mail contributions, Roberts expects need to outstrip donations.

One group that claims an increase in donations is United Way of America, the Alexandria, Va.-based umbrella group for local United Ways across the country. The national group is recovering from a widely publicized management scandal that had reduced giving in many locales.