Tough times are cause to give more
TEXT OF STORY
Steve Chiotakis: No doubt, the economic fallout has hurt many charities. Philanthropists and foundations have been tightening their belts. But some donors are giving more because of the weak economy. Here's Marketplace's Jeff Tyler.
Jeff Tyler: Last fall, after a really bad day on the stock market, a small foundation in Illinois received a letter. It was addressed to its CEO, Sara Schastok.
Sara Schastok: Dear Sara, we are pleased to commit $1 million to the community works initiative at the Evanston Community Foundation.
The anonymous million-dollar donation will help low-income kids attend pre-school. And the donation allows the foundation to increase the amount it gives away in grants.
But most organizations aren't so lucky. In the last half of 2008, donations of a million dollars or more fell by a third. Yet demand for assistance has been climbing.
At this Pittsburgh food pantry, volunteers pass out bags of groceries. Grant Oliphant, CEO of the Pittsburgh Foundation, sees more people he describes as "the new needy."
Grant Oliphant: It's folks who have never before had reason to believe that they would find themselves in need of assistance with food or shelter or transportation.
Pittsburgh charities have raised about a million dollars to create a new fund to help people hurt by the downturn. But Oliphant says many nonprofits themselves need emergency assistance.
Oliphant: The concern is that some of these nonprofits will go out of business. It is immensely difficult to replace them once they're gone.
To keep projects afloat, some philanthropists are giving more. Hedge fund manager Ken Nickerson founded the Eos Foundation to fight poverty in the greater Boston area. Last year, the endowment lost about 40 percent of its value. So Nickerson and his wife donated an extra $10 million.
Ken Nickerson: We had more money than we needed and the foundation had less. And so we actually transferred about a quarter of our wealth over to try and help re-capitalize the endowment.
Nickerson says studies show the very wealthy often give about 2 percent of their income to charity. He challenges the rich to ask themselves, "How much money do I really need? And how can I give more?"
In Los Angeles, I'm Jeff Tyler for Marketplace.