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Economy hits nonprofits: worst is yet to come
Originally published August 25, 2008

By Sarah Fortney
News-Post Staff
A sluggish economy means tighter budgets for many local nonprofit organizations, and some nonprofit leaders predict next year could be worse.

The United Way of Frederick County has cut operating costs from last year, although no staff cuts have been made. Rick Weldon, president and chief executive officer, said this year's office staff and operations budget is $397,604, about $23,000 less than last year's budget of $421,050.

Because more people are struggling to afford the basic costs of living, Weldon said, making a donation to charity seems to fall by the wayside.

"It's affecting every nonprofit," he said. "Particularly those that are involved in charitable giving."

Along with that comes a growing need in the community for such charity, Weldon said.

The Religious Coalition has had a 40 percent increase over the last year in need for overall services, said executive director Rev. Brian Scott.

Demands for the organization's services are at an all-time high since it formed in 1981, Scott said.

"We're seeing clients we would not have seen a few years ago, some who might have been donors a few years ago," Scott said.

The Frederick County chapter of the American Red Cross recently eliminated some paid positions as a way to trim expenses.

Volunteers will fulfill the duties for positions in emergency, volunteer and health and safety services, said Keith Roberson, board chairman.

Judy Peterson worked for seven years as a full-time director of emergency services, one of the positions that has been eliminated for the upcoming year.

Peterson resigned earlier this year, but returned last Monday to work part-time as a supervisor of operations. She will work with volunteer leadership and coordination, she said.

The chapter's yearly budget has remained roughly the same, $709,197 in fiscal 2007 and $710,961 in 2008.

Board members plan to strengthen programs and fundraising this year to prevent a drop in donations, Roberson said.

Betsy Day, president of the Community Foundation, believes residents are aware of the increasing demands for charity during harsh times.

Many donors remain committed and will continue to give as they can, she said.

Day recalls getting through an economic slump in 2002 when the organization's charitable giving remained solid, she said.

"We learned a lot during that period, and I plan on taking that knowledge and experience and using that to maintain the fine support that we've gotten from the community in the past."

Because a majority of charitable donations are made between Oct. 1 and Dec. 31 each year, Day said, she did not know whether the recent decline in the economy is affecting the organization.

"It's just too early to say," she said. "We won't feel this until next year."

Several other nonprofits have just started their fiscal year, making it difficult to say how great the effect of the economy has been.

Pat Hanberry, chief executive officer of the Mental Health Association of Frederick County, said this is because the budget process lags behind.

Depending on the state's budget, nonprofit organizations might not experience large cuts until at least one or two fiscal years, she said.

"I think (next year's) going to be a tough year."


 


 

 

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