Doing More with Less Vs Doing More with Nothing
Having a calling is the most wonderful thing in the world, and it is the absolutely worst thing in the world. Knowing you want to encourage people to take control of their lives, to vote, to turn their passion into their project, and to make their home their community even if it is an apartment, is awesome. However, it is the worst, because you are dependent on other people to donate money to give you that chance to follow that call to serve. Most of the time, you work with businesses who want to help and that is fine and good, until the economy takes a fist to the midsection or another delicate part of the body. That is what has happened to the oil sector of the economy. That is bad for Houston and the nonprofits that work and live here. And itis bad for Texans Together
The Houston Chronicle took a look at the situation in their article: Local Nonprofits Feeling the Squeeze from Oil Collapse
Here's the article:
Local nonprofits feeling the squeeze from oil collapse
PHILANTHROPY: As donations drop, local nonprofits face tough choices - cutting back or even shutting down
By Mike Tolson | March 5, 2016
The little Houston organization that became synonymous with its pink ribbons was born, as so many small charities are, at the intersection of passion and need. It started with a frightening diagnosis - a young mother's breast cancer - and from there pursued a mission of losing no more Houston women to the disease.
For two decades, the Pink Ribbons Project took what money it could raise and used it to promote early screening, research, drug availability and simple hope. Then one day earlier this year, those in charge realized that they had to face the truth. The corporate sponsor for its main fundraiser, the Tour de Pink bike ride, had pulled out. A replacement could not be found. The end had arrived.
The giving community was for the moment tapped out, with oil and gas companies reeling from a price collapse that was having severe consequences throughout the region. A restricted flow of donations raised the possibility that Pink Ribbons' administrative costs might not stay below the target of 20 to 25 percent, which was unacceptable to its staff or board.
"While we used to be able to find great support, trying to cultivate new relationships in the economic times of Houston now is nearly impossible," said Susan Rafte, whose cancer diagnosis in 1993 led her sister, Jane Weiner, to start the organization along with fellow professional dancers in New York. "So, unfortunately, in the end, we couldn't make it happen."
The Pink Ribbons Project recently announced it would cease operations at the end of May. Remaining funds are being donated to other groups that are similarly inclined. Such unwinding is sad stuff for the Pink Ribbons staff and volunteers, but the underlying issue of diminished philanthropy is causing worry all across Houston's nonprofit community.
'We knew it was coming'
Donations are down throughout the region. For the first time in years, the local United Way campaign will not surpass the total from the year before. The hope is to get close, perhaps 95 percent of the $81 million raised in 2015.
"We've been prepared for it - we knew it was coming," said Anne Neeson, vice president of donor relations for the Greater Houston United Way. "People want to be supportive. But they just are not able to be, at least the way they have been."
United Way, which receives many of its contributions from employee payroll deductions, warned member charities last year to expect the worst. It was possible that they might receive a 10 percent cut from the previous year's allocation. Neeson said the reduction probably will not be that severe after the annual drive ends later this month. But she knows that every dollar is crucial, especially for smaller groups who run closer to the edge.
With profits down, layoffs spreading and uncertainty about the duration of the oil downturn, some of the sources that contribute directly to the hundreds of local nonprofits are gone, going or unable to maintain previous levels of support.
"We had our largest corporate contributor say, essentially, 'King's X, I can't do it anymore,' so we are slimming down and laying off people and cutting costs," said Don Sweat, president of Boys & Harbor, a residential program for abused, abandoned or neglected children. "He did come back six months later and make a sizable donation. But it's like that across the board. No one knows what the future will be."
The oldest truth of the oil patch is that good times never last. Over the past decade, the price of a barrel of benchmark West Texas crude rarely fell below $60, save for a brief dip in 2009, and often surged toward and past $100. It was easy for Houston's large energy sector to be generous with record profits.
But as oil prices began to fall in 2015, companies that explored and drilled exuberantly found themselves strapped for cash. Bankruptcies soared toward the end of the year, and 2016 has offered no relief. Crippled companies have pared back spending to the essentials, which meant philanthropy was an inevitable casualty.
For the Pink Ribbons Project, whose annual budget typically stood around $1 million, the crash hit especially hard. It had managed to hang on despite what its leaders call "pink fatigue," the proliferation of breast cancer groups and their frequent fundraising events. A reputation for free-spirited independence and close personal relationships with donors gave it a core following. Yet a shrinking local economy could only stretch so far.
"I think it was the perfect storm," Rafte said. "Unfortunately, I think the economy is the biggest (reason)."
Executive director, Kristi Okwuonu, said the group decided to make "an adult decision" to close down rather than simply survive and hope for an eventual turnaround.
"We have lost some of our major donors, or they may have scaled back significantly," Okwuonu said. "Where they gave us $30,000 before, they may only be able to give us $3,000. That happening multiple times made us take a hard look at our sustainability. Do we want to push through and have the potential to struggle every year? We never wanted there to be a question of whether we were good stewards of our donors' money."
The budget squeeze has affected larger nonprofits as well. Although their survival might not be in doubt, they are being forced to cut programs and services they see as essential to their missions, and the demand for which may grow in tougher times.
"We are definitely feeling it," said Elise Hough, president of Easter Seals of Greater Houston. "I have had several of our big donors tell us that 2016 is going to be our worst year, so get ready."
Last November, Hough said, the organization made tough decisions - to streamline as much as possible, to cut positions and not fill open ones, to go a second year without raises, to combine services.
And to chop away at others. Its program to provide high-tech training for students with disabilities, aimed at giving them employable skills, has been dramatically scaled back. It was funded solely through contributions.
"The revenue (for it) has dropped by almost half in this period," Hough said.
Revenue from the state also is down because of less oil activity, which affects fee-for-service programs run by Easter Seals. As for the foundations whose sole purpose is to support worthy nonprofit endeavors, those with properties or investments that are oil-and-gas related likewise don't have as much money to give.
In other words, the year promises to be a lean one even for operations that have no obvious connection to the energy business. For Martin Cominsky, CEO of Interfaith Ministries of Greater Houston, the next budget could be as much as $1 million short of the $17 million total of 2015.
"Our economy in Houston is resilient, but there is no way around it when a big sector is hit that hard," said Cominsky, whose organization runs the Meals on Wheels program for seniors and another program devoted to refugee services. "Big companies that were big donors are not giving as they did, or in some cases at all. Our donations, while remaining large in volume, are smaller in nature. Uncertainty and instability is not good for charitable giving."
Unable to help others
He vows not to cut back on a promised meal to any person now enrolled in Meals on Wheels. Beyond that, he doesn't know. Interfaith likely will stop enrolling new participants until the squeeze is over. That could be a year, two years, maybe longer. The only good news is that gas prices are down, which has a beneficial impact on food delivery costs.
"But it's not enough compensation," Cominsky said. "There are people who have a need for our services and simply won't get them."
It's a refrain that will be heard across Houston for the indefinite future. At Boys & Girls Harbor, Sweat wonders whether there will be children who need a temporary home whom he'll be unable to take. Outside his office, as a reminder of the times, is a nice new playground that was built for them by a contribution from an oil and gas company.
"They're not in business anymore," he said.