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Donations rise but challenges remain for local nonprofits

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San Diegans have increased the amount of time and money they donate to charities over the past year, but the number of contributors has slipped, according to a quarterly index on nonprofits released Tuesday by the University of San Diego's Caster Family Center for Nonprofit and Philanthropic Research.

According to the index, there was an 8.8 percent increase in individual giving and a 3.2 percent increase in hours spent on volunteer activity between the third quarters of 2012 and 2013.

But during the same period, the number of households making donations slid 2.4 percent and the number engaged in volunteer activities slipped 1.2 percent.

Despite the slight declines, the nonprofit sector is making some headway as it tries to recover from the recession.

"Things seem to be stabilizing," said an executive from one local charitable organization, who was quoted anonymously in the survey. "Nothing is easy, but I feel like things are getting better, little by little."

Perhaps as a reflection of the growing economy — with a pickup in hiring and drop in unemployment — the need for charitable services slid 0.8 percent over the past.

But even though the jobless rate has dropped from 8.4 percent to 7 percent over the past year, it is still high by historic levels and for many local nonprofits, especially the ones that concentrate on delivering human services, the demand still outstrips the financial resources available, the survey said.

“Overall morale can move from feeling a sense of increased purpose, mission and need, to despair and the overwhelming feeling that the needs and demands are too great to respond to,” said the CEO of one local nonprofit, who was anonymously quoted in the survey.

Although individual donations are rising, it has become tougher to get corporate contributions, a number of executives said.

“Nonprofits have to jump through several hoops and wait several years to apply for grants for funding with corporations and private foundations," Pauline Martinson, executive director of I Love A Clean San Diego, told the survey. "Funding is restricted for programs mostly and favors hard expenses [related to specific programs]. It’s more and more difficult to get funding to pay for staff time or operating costs.”

Another executive said large donors are doing more to ensure that they are getting enough bang for the bucks they are donating, including "solid metrics and quantifiable results instead of anecdotal evidence.”

At the same time, federal budget cuts have acted as a two-edged sword to some nonprofits. Demand has risen "due to clients not getting the services they typically receive from the federal government," one nonprofit executive said. But at the same time, the nonprofits are getting less money from federal grants or from private-sector companies hurt by the cutbacks.

One nonprofit executive said that before the government shutdown in October, his organization was scheduled to receive a large donation from a home mortgage firm. "But their earnings fell during the shutdown and therefore our donation was probably half of what it should have been," the executive said.

To build more support, many nonprofits are exploring better ways of telling donors about the value of their services. "Nonprofits are calculating their impact in new and creative ways to better connect with and inspire donors and supporters,” the executive said.

The survey, which was conducted in conjunction with Luth Research, U.S. Bank, The Westreich Foundation and 2-1-1 San Diego, involved data from many sources as well as information provided by more than 100 local leaders of nonprofits.

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