Charity circuit feeling financial pain
If you think this has been a dismal season for making money, imagine how hard it’s been to persuade people to give it away.
What has historically been the season for fund-raising dinners has hit a perfect storm: a tanking economy and a presidential race sucking away large amounts of donor cash.
A great example of how much is going to politics is the $10 million Barack Obama earned in one night in September at the Greystone Mansion event featuring a concert by Barbra Streisand.
Industry-related non-profits and charities have annual revenue that is probably well over $2 billion. Some non-profits, like the Motion Picture Academy with $80 million in annual revenue, are on relatively solid ground, but industry-connected charities with high-profile fund-raising dinners are having a hard time.
Dr. Gary Gitnick said donations to Monday’s Fulfillment Fund dinner benefiting his mentoring and college access org are down $1 million. This despite having a major honoree in Legendary Pictures’ topper Thomas Tull.
“What we’re seeing are people who normally buy a $25,000 table are buying a $10,000 one,” Gitnick said. “At the same time, the demands on the fund are intolerable because so many children are poverty stricken and need us to provide services to them.”
Gitnick said he had no choice but to layoff nine staffers. “You try to be prudent and keep the organization floating,” he said.
Two weeks ago, Tom Sherak raised $2.5 million at the annual MS Dinner of Champions he chairs, where Disney’s Orin Aviv was honored. Amount was slightly down from last year.
“This is the most giving industry in the world,” Sherak said. “I still think people will give to someone they have a relationship with but they won’t give what they gave in the past. It’s not in the cards.”
As the financial woe travels down the food chain, look for event planners and associated vendors to start taking a hit.
Arguably the most prestigious charity gala held is the Oct. 25 Carousel Ball. Event chair Barbara Davis said she feels fortunate in having sold out over a year ago. “I’m a nudge and a pain in the neck,” Davis said. “I try to get on the companies’ donation list way in advance. If you bother them early enough, your date is on their agenda.”
When the ball was last held in 2006, the dinner earned $3.9 million for children’s diabetes research. An additional $740,000 came from the silent and live auctions, which are areas that concern Davis this year.
“I have fabulous items but are people going to bid?” Davis said. “I don’t think anyone is beyond the current problems in the market.”
And there’s no escaping all the directions in which they’re being pulled.
“People want to give to both charity and politics but there’s only so much money in the community,” said event coordinator Judy Levy. “There’s always lots of competition for charity dollars but I’ve never seen it this challenging. A lot of charities are going to have to change the way they do things.”
Hollace Davids, who is a former president of Women in Film, said: “You have to prioritize where the money goes. You can’t be producing an extravagant event. You have to keep it bare bones and make sure the money goes to the charity.”
Event producer Jeffrey Best said what he sees are charities coming to him with their event budgets cut in half. He mentioned one gala where two out of three sponsors have dropped out.
“What you’re hoping is the sponsors’ underwriting takes care of the costs and the money from tickets all goes to the charity,” Best said. “Without the sponsors, you really start hoping those $25,000 and $50,000 tables start selling.”
While L.A. is feeling plenty of pain, Gotham is in the eye of the financial storm and the charity circuit is distinctly vulnerable given how intertwined the realms of Wall Street and giving became in recent years.
The Samuel Waxman dinner in November, hosted by Chevy Chase, raised $6 million in the fight against cancer. At the time Bear Stearns sent hundreds of employees and wrote a lot of big checks. This year, no more Bear Stearns.
Coppy Holzman, a former retail and Web exec who runs Charity Buzz, a Web-based auction service based in Connecticut, said some people who gave money “just for social recognition … are falling by the wayside.”
Donations are certainly threatened at major Gotham institutions such as Harlem’s storied Apollo Theater, which counted on now-defunct entities Lehman Bros. and Washington Mutual to help fund a range of arts charities. WaMu even had its name on the marquee for the famed Amateur Night.
In L.A., the problems have trickled down to vendors such as valet companies.
Chuck’s Parking prexy Chuck Pick who’s been providing valet parking in L.A. for 40 years said he’s seen ups and downs in the charity business before.
“These events get squeezed for money and they want to cut back on the parking manpower but I always refuse,” Pick said. “People waiting for their cars become animals. It’s not the way you want to end an evening.”