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CNN Live At Daybreak

Charities Suffering

Aired December 27, 2002 - 05:26   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


CAROL COSTELLO, CNN ANCHOR: This is traditionally the season of giving, but this year charities are suffering. They're reporting a huge drop in donations due to the uncertain economy.
CNN Financial News correspondent Susan Lisovicz has details.

(BEGIN VIDEOTAPE)

SUSAN LISOVICZ, CNN CORRESPONDENT (voice-over): There is no shortage of presents at the AIDS Action Committee's annual toy drive in Boston. But financial contributions are another story.

MICHAEL DUFFY, AIDS ACTION COMMITTEE: We've seen a significant decrease in donors who give to us through our direct mail program, people who send in donations through the mail. From last year to this year, it's been a drop of about 75 percent, which is considerable.

LISOVICZ: In this season of giving, that is an all too familiar refrain. Nearly half of charities surveyed say they are seeing a decline in donations this year and last year wasn't good either. Despite the $1.8 billion given to September 11 related causes, donations overall decreased by 2.3 percent when adjusted for inflation.

Rising unemployment one of the big factors for the cutback in private donations, which comprise three quarters of all charitable giving. Another is the third straight year of declines in the stock market, which has also reigned in corporate philanthropy. And stocks are the financial backbone of many foundations. More than 80 percent of these non-profits say they are taking cost cutting measures. It's gotten so bad that pledges already made are not always being kept.

EUGENE TEMPEL, INDIANA UNIVERSITY CENTER ON PHILANTHROPY: Major gift donors are not making their commitments. They're holding off to see what happens. And there's even some reports of multi-year pledges being deferred, that is, people extending three year pledges into five year pledges and that kind of thing.

LISOVICZ: But Americans are still giving.

(on camera): Americans historically share their wealth, in good times and bad. In 1999, during the flush days of the bull market, Americans gave $211 billion to charity. Last year, when the economy was in recession, Americans gave $212 billion.

(voice-over): But the pullback that began in 2001 is hitting some charities particularly hard, such as social services, because the public sector is also feeling the pinch of a prolonged economic slump.

BRIAN GALLAGHER, UNITED WAY OF AMERICA: The primary funder of charitable efforts and human services across the country is government. So the fact that you've got at least 35 state governments that are running in the red right now, and in some cases significant deficits, it means that you're seeing food pantries and housing issues and rent payments, you know, the impact is service to people and that's under extreme pressure.

LISOVICZ: And that pressure is forcing charities to rethink everything.

UNIDENTIFIED FEMALE: Robertson or Robinson?

LISOVICZ: How they solicit, whom they solicit from and how they spend the money.

Susan Lisovicz, CNN Financial News, New York.

(END VIDEOTAPE)

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com






Aired December 27, 2002 - 05:26   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL COSTELLO, CNN ANCHOR: This is traditionally the season of giving, but this year charities are suffering. They're reporting a huge drop in donations due to the uncertain economy.
CNN Financial News correspondent Susan Lisovicz has details.

(BEGIN VIDEOTAPE)

SUSAN LISOVICZ, CNN CORRESPONDENT (voice-over): There is no shortage of presents at the AIDS Action Committee's annual toy drive in Boston. But financial contributions are another story.

MICHAEL DUFFY, AIDS ACTION COMMITTEE: We've seen a significant decrease in donors who give to us through our direct mail program, people who send in donations through the mail. From last year to this year, it's been a drop of about 75 percent, which is considerable.

LISOVICZ: In this season of giving, that is an all too familiar refrain. Nearly half of charities surveyed say they are seeing a decline in donations this year and last year wasn't good either. Despite the $1.8 billion given to September 11 related causes, donations overall decreased by 2.3 percent when adjusted for inflation.

Rising unemployment one of the big factors for the cutback in private donations, which comprise three quarters of all charitable giving. Another is the third straight year of declines in the stock market, which has also reigned in corporate philanthropy. And stocks are the financial backbone of many foundations. More than 80 percent of these non-profits say they are taking cost cutting measures. It's gotten so bad that pledges already made are not always being kept.

EUGENE TEMPEL, INDIANA UNIVERSITY CENTER ON PHILANTHROPY: Major gift donors are not making their commitments. They're holding off to see what happens. And there's even some reports of multi-year pledges being deferred, that is, people extending three year pledges into five year pledges and that kind of thing.

LISOVICZ: But Americans are still giving.

(on camera): Americans historically share their wealth, in good times and bad. In 1999, during the flush days of the bull market, Americans gave $211 billion to charity. Last year, when the economy was in recession, Americans gave $212 billion.

(voice-over): But the pullback that began in 2001 is hitting some charities particularly hard, such as social services, because the public sector is also feeling the pinch of a prolonged economic slump.

BRIAN GALLAGHER, UNITED WAY OF AMERICA: The primary funder of charitable efforts and human services across the country is government. So the fact that you've got at least 35 state governments that are running in the red right now, and in some cases significant deficits, it means that you're seeing food pantries and housing issues and rent payments, you know, the impact is service to people and that's under extreme pressure.

LISOVICZ: And that pressure is forcing charities to rethink everything.

UNIDENTIFIED FEMALE: Robertson or Robinson?

LISOVICZ: How they solicit, whom they solicit from and how they spend the money.

Susan Lisovicz, CNN Financial News, New York.

(END VIDEOTAPE)

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com