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Nonprofits face tough times; uncertainty in 2002

JACKSON — With a low consumer confidence level, layoffs on the rise at many businesses, and in some cases businesses closing their doors for good, it is not hard to see why many nonprofit organizations are facing tough times.

And while some nonprofits are fine now, there is a lot of uncertainty as to what the future may hold for them, said Nathan Woodliff-Stanley, executive director of the Mississippi Center for Nonprofits.

“The impact of the economic downturn will be seen more next year than this year,” he said.

Some private foundations are basing their contributions to nonprofits on last year’s assets, Woodliff-Stanley said.

“If they’ve seen a big drop in asset values this year that will affect pay-out ratio for 2002,” he said. “Some drops may be greater next year than this year.”

And while those nonprofit organizations funded by the government may not be feeling an effect this year, there will probably be some sort of an impact on some of those organizations next year, Woodliff-Stanley said.

“I know our organizations had to struggle to hold onto funding for next year,” he said. “Huge surpluses are disappearing through a combination of tax cuts and money being spent on homeland defense. There is not likely to be extensive new investment at the federal level of services that would fund nonprofits.”

And at the state level, Mississippi is experiencing one of the worst state budget crunches seen in a long time, said Stanley, adding that nonprofits should “consider themselves lucky to hang onto where they are.”

While there has been generous giving in response to the Sept. 11 terrorist attacks to organizations such as the American Red Cross, Woodliff-Stanley said there are other less visible organizations that still need contributions as well.

“People are reassessing what’s important in their lives,” he said. “(That) could lead conceivably to more giving, more responsiveness in communities. It’s not all going to be a negative effect. But certainly the financial picture looks tighter in the year ahead for nonprofits.

There may be certain increased needs with unemployment starting to rise again.”

One issue Woodliff-Stanley pointed out was the reauthorization of TANF.

“Welfare rolls went down dramatically in Mississippi. That whole program was possible because we had a strong economy,” he said. “How will a less strong economy affect the program?”

Cutbacks in corporate giving programs have been present since the economic downturn began, but since the Sept. 11 terrorist attacks, the bottom has fallen out of the programs of many companies. Mississippi Chemical Corporation (MCC) for one has had to cut back its corporate giving to nonprofits, said Melinda Hood, spokesperson for the company. Hood is also responsible for the corporate gift-giving program for MCC.

“Our corporate gift giving program has been reduced significantly because of the agricultural economy for us particularly,” Hood said. “We usually allocate a percentage of our profits for our corporate gift-giving program. Right now we’re certainly not taking any new contributions. We’re in a holding pattern and we’re not actually reviewing new contribution avenues for us.”

Hood said not being able to make as many donations to charitable organizations has been disappointing for the company.

“We feel a responsibility as a company to fund and support various worthwhile projects around the state and certainly at this point we can’t do that and it’s been a bit frustrating,” Hood said. “It’s got to be tough for nonprofits.”

Hood said it is important for people to remember to give to nonprofit organizations.

“The nonprofits in our area in our state really do serve a need and a sense of community and awareness and we certainly all need that. All of our companies in this state have employees that are active in their communities. From our standpoint our company should also be active in supporting the communities in which employees live.”

Contact MBJ staff writer Elizabeth Kirkland at ekirkland@msbusiness.com or (601) 364-1042.

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