Nonprofitable times

Conservation groups hunker down for the economic crisis.

  • A backhoe works to return Utah's Sevier River to its natural channel in a joint program of the Grand Canyon Trust and the state.The Trust staffer who oversaw the Sevier and Fremont river restoration projects has left, and thanks to the financial crisis, the organization doesn't plan to rehire or contribute more money to the effort, which could make it harder for the state to secure funding.

    Courtesy Grand Canyon Trust
 

George W. Bush may not have been good to the environment, but his presidency was a boon for environmental nonprofits. "It was like we had a pyromaniac in the White House setting fires all over the landscape, and we were rushing to them all," says Heather Tischbein, executive director of Western Colorado Congress, a Grand Junction-based environmental organization. Like many nonprofits, the group's revenues rose during Bush's tenure, more than doubling to $707,225 between 2000 and 2007. But the group grew faster than its ability to raise money, and at the end of this August, it laid off six of its 10 staffers and lost two others. Now, the group has restructured to a staff of five and is casting its net wide for funding so that it can continue to meet growing local needs.

The timing couldn't be worse.

With the economy slumping and the stock market plunging, some foundations will be re-evaluating funding priorities. Corporations are cutting spending, as are individual donors -- especially after throwing so much into the election. And the perception that President-elect Barack Obama is a friend rather than a threat could further dampen donations to conservation groups.

Most such organizations say it's too early to tell how much of a hit they will take. But even as groups send out their end-of-year appeals, many are already cutting back. "Everyone's a little scared," says Phil Pearl, development director with the Flagstaff, Ariz.-based Grand Canyon Trust, which works to conserve the Colorado Plateau's canyon country. "A number of nonprofits probably won't survive this downturn."

This isn't completely unfamiliar territory for nonprofits. In the downturn following the burst of the dot-com bubble in 2001, more than 40 percent of mid-sized nonprofits surveyed reported operating with a deficit, and from 2001 to 2003 expenses generally grew faster than revenues, according to the Nonprofit Finance Fund. Giving to environmental and other nonprofits fell slightly during that downturn, according to the Giving USA Foundation, but it has always rebounded and continued to grow. Now, though, with the nation reeling from the subprime mortgage crisis and the worst stock market crash since the Great Depression, things look gloomier.

Some of the impacts will be delayed. Many larger foundations' giving programs are insulated against market fluctuations because they base their grant payouts on income averaged over a period of years. The Doris Duke Charitable Foundation, for example, will give about the same $17.5 million to environmental causes in 2009 as it will have given by the end of 2008, even as it loses in the stock market and cuts administrative spending 10 percent, says Mark Shaffer, the organization's environment program director. But eventually it may be forced to grant less money and do some charity triage. "If the market recovered by June of next year to where it was in June of this year, our giving in 2010 wouldn't be affected," Shaffer explains. "But I don't think anybody's expecting it to come back quite that quickly."

As grants decline, competition will get fiercer -- and newer or smaller, narrowly focused nonprofits that rely heavily on a few sources of funding will have a harder time.

Other effects are already evident and will likely worsen. Facing declining endowments and expecting stiffer competition for individual donations and lower-than-hoped-for holiday returns, many nonprofits are putting off wish-list items like new computers, and trimming travel and administrative costs to avoid cutting staff and on-the-ground work. The Grand Canyon Trust has chopped 15 to 20 percent of its $3.6 million core budget for 2009. Most of that comes from not rehiring two vacant staff positions -- one that oversaw restoration and land conservation on Utah's Sevier and Fremont Rivers, and one in the group's Native America program. The Trust is also honing its priorities and dropping some activities that are "tangential" to its mission, Pearl says. For example, it will continue to protect the Grand Canyon and watchdog energy development in southern Utah, but will relinquish its seat on an advisory group that seeks to balance human water needs with environmental concerns on northern Arizona's Coconino Plateau.

Most groups anticipate having to be more aggressive about asking for money just to maintain current funding. The Sierra Club is expecting a 3 to 5 percent decrease in major gifts against what it had forecast by the end of the year, says deputy chief advancement officer John Calaway, and 10 percent of its major gift revenue -- generally a third of its overall budget -- will be vulnerable next year. To help hedge against that loss, Calaway's department will focus on those donors who consider the Sierra Club's efforts a top priority. Plans to add extra fund-raising staff will also help. But the national conservation group is wrangling with more than the economic slowdown: It's also reorganizing -- ramping up some programs and decreasing others -- as large, multi-year gifts related to fighting the Bush administration's anti-environment efforts begin to run out.

Therein lies one of the biggest challenges, and potential opportunities, for environmental groups in these rough times, says Rick Johnson of the Idaho Conservation League. "They have to make sure they stay dialed and demonstrate to their donor base the relevance of what they do" as the new administration takes office. For the Sierra Club, that will mean rallying around a renewable energy economy and fighting global warming and coal-fired power plants, Calaway says. But it will also mean looking back, adds Pearl. The Bush legacy of roughly handled public lands and faltering federal land-agency budgets and staffing isn't going away overnight, especially with the federal government focused on buoying the economy. There is still plenty to do, Pearl says. "I think that the entire environmental community will be working hard to make people understand that this is a transition that is going to take time."