With inflation rates rising nationwide, nonprofits across North Texas are struggling to keep up with increased demand for their services and the potential for fewer private donations to sustain that growth.
These issues are wreaking havoc on nonprofit groups just as they prepare for the Communities Foundation of Texas’ North Texas Giving Day, an 18-hour online giving event designed to encourage community members to donate to local nonprofits.This year’s event is set for Sept. 22.
“Nonprofits are often dependent on people’s generosity,” said Megan Fitzmaurice, professor of philanthropy at University of Texas at Arlington, which offers the only bachelor’s degree program in philanthropy in Texas. “As the economy starts to decline, people become protective of their own assets and turn inward and limit the amount they give to charities.”
While several studies showed a growth in charitable giving during the COVID-19 pandemic, those dollars aren’t going as far in today’s economy.
“During economic downturns, there’s an increase in demand for services for clients that nonprofits are serving and a decrease in the capacity of their donor base – it becomes a fundamental mismatch,” said Rose Bradshaw, president and CEO of North Texas Community Foundation.
Smaller organizations are more dependent on individual donations for their work, but they have fewer revenue options, according to the Urban Institute, a nonprofit research organization.
“The need for us (the nonprofit) has grown tremendously from the time we started five years ago to where we are now,” said Kelli Graham, founder and director of Laundry Love Fort Worth. “Because of rising costs and inflation, it’s extremely expensive to do laundry. A lot of people don’t realize that.”
Laundry Love Fort Worth provides laundry assistance to those in need. On the third Saturday of every month, the nonprofit provides cost-free laundry services at a Turbo Laundry at the corner of Hulen Street and Granbury Road. Laundry Love serves about 60 families in the area, equating to about 200 people, Graham said.
“Supplies cost much more – we used to pay $3.25 for a washer. Now it’s $4.25,” Graham said. “Dryers used to be 50 cents to activate. Now it’s a dollar. We also fund all of the detergent, the dryer sheets and the children’s area to keep kids occupied while parents do the laundry.”
The monthly events used to cost about $1,000, but now they’re upward of $1,300 to do the same thing, Graham said.
For Cuidado Casero Foundation, the increased price of services has forced the nonprofit to reduce the number of scholarships it gives to students who desire to get a college degree in nursing and who would otherwise not have the financial means to fulfill their educational goals.
“Normally, we give out 22, 23 scholarships per year, but this year we only gave out 13 scholarships,” said Doris Martinez, president of Cuidado Casero Foundation.
Martinez saw the need to create more bilingual nurses after a personal struggle to translate medical jargon from English to Spanish.
“A lot of medical care gets lost in translation, so we created the Cuidado Casero Foundation to provide scholarships to Spanish-speaking Latino students pursuing a degree in nursing in the DFW area,” Martinez said.
Cuidado Casero Foundation solely relies on private donations from fundraising events to provide its scholarships.
Traditionally, the organization hosts an annual fundraising event to raise money. But because of the COVID-19 pandemic, the event was canceled in 2020 and 2021. The foundation was able to put on the fundraising event this year, but attendance and sponsorships significantly decreased.
“With the course of the economy, a lot of businesses are reshuffling and budgeting more strictly, so sponsorships have gone down, which has decreased the amount of scholarships we give,” Martinez said.
“I’m a one-man team now,” Martinez said. “We had a few individuals working part time, but with the economy, it is hard to keep up with increasing wages. Luckily, we have a board of directors and great volunteers to help.”
The struggling economy has also forced Cuidado Casero Foundation to internally downsize.
How food bank is surviving higher food, gas prices
But even for large nonprofits – those with expenses of $10 million or more – individual donations are still important, according to the Urban Institute.
Tarrant Area Food Bank distributes food to pantries in 13 counties across Texas. The massive organization also relies on individual donations to keep up its operations.
“We have continued to receive generous donations from individual donors and historical foundations,” said Julie Butner, president and CEO of Tarrant Area Food Bank. “We have actually seen a drop in federal and state level government funding.”
The decrease in government funding has caused the food bank to dip into its reserves to purchase food. The organization is spending about $1.5 million per month to buy food because of a loss of government support, Butner said.
“We had not planned to spend that money on food, but to meet the needs of the community, we are,” Butner said.
Food prices skyrocketed during the past 12 months, contributing to the steep inflation rate. The food at home index rose 13.1% over the past year, or the largest 12-month period increase since March 1979, according to the Bureau of Labor Statistics.
The food inflation has impacted what the food bank is able to purchase, Butner said.
The increase in gas prices has also impacted Tarrant Area Food Bank’s ability to deliver necessary services to people in the community.
The energy index rose 23.8% over the past 12 months, as the gasoline index increased 25.6% and the fuel index rose 68.8% over the same period, according to the Bureau of Labor Statistics Sept. 13 Consumer Price Index Summary.
Tarrant Area Food Bank operates 18 vehicles that serve 13 counties across North Texas. Its gasoline budget has doubled since last year, Butner said.
“Ultimately, we are distributing less food to families who need it,” Butner said. “We typically distribute 100 pounds of food per family – now we’re anywhere from 65 to 80 pounds per family.”
The decrease in donations and funding are hitting nonprofits hard now, but it is important to remember that is not always the case, Fitzmaurice said.
“In crisis situations, people actually tend to become more generous,” Fitzmaurice said. “We saw donations skyrocket during COVID, (although) it was a financially difficult time for a lot of people.”
Laundry Love, Cuidado Casero Foundation and Tarrant Area Food Bank will all take part in North Texas Giving Day on Sept. 22.
How nonprofits can weather the storm
As of 2020, there were 28,009 501(c)(3) registered public charities in North Texas, with 6,962 located within Tarrant County – many of which will be involved in North Texas Giving Day.
“It’s important to remember economic downturns last, on average, 15 to 18 months,” Bradshaw said. “We have to keep the long game in mind and be prepared for these periods when the market rises and falls.”
Fitzmaurice said nonprofits can take three big steps to weather economic downturns: Ramp up donor retention efforts and volunteer recruitment, apply for grants, and diversify their funding.
Donor retention refers to the ability to get existing donors to repeatedly give to an organization. Nonprofits across the world are struggling with donor retention, with the average rate of retention at 45%.
“If you look at reasons why people stop donating, it may be because they were never thanked or they had no idea how their gift made an impact or they were never presented with another opportunity to give,” Fitzmaurice said.
Turning one-time donors into monthly donors can also be achieved by creating a positive volunteer base that become storytellers for their nonprofits mission.
“The more people you have volunteering, the more likely they are to partner with you financially and more likely to share your story with others,” Fitzmaurice said.
About 63 million Americans – 25% of the adult population – volunteer their time and energy to nonprofits and spend about 52 hours per year volunteering their time.
People give to what they know, so it’s important to engage as many people across the community as possible, Bradshaw said.
When it comes to diversifying funds, it is much easier said than done, Fitzmaurice said. Diversifying funds refers to creating different avenues of funding so a nonprofit is not solely reliant on one funding source.
Cuidado Casero plans to apply for government grants soon as it tries to expand, which means private funding and individual donations would no longer be the organization’s sole source of funding, Martinez said
In order to receive grants from the government or foundations, nonprofits must prove they have the capacity and resources to fulfill the needs of their programming, Fitzmaurice said. However, grant funding often diminishes over time as foundations look for new efforts to support. Laundry Love’s biggest funding had come from grants, but they recently were denied, Graham said.
“I don’t know why, but we’ve been denied grants we’ve written for – maybe they’re being a lot more selective or maybe giving grants to larger nonprofits,” Graham said.
Regardless of funding sources, nonprofits in North Texas, both big and small, are determined to continue to provide their services to the community and are looking to find the light at the end of the tunnel.
“We all have to keep the long game in mind, and be prepared for these periods,” Bradshaw said. “We need our nonprofits to stay focused on their mission.”
Disclaimer: The North Texas Community Foundation has previously provided grant funding to the Fort Worth Report. The Fort Worth Report is also participating in North Texas Giving Day.
Izzy Acheson is a reporting fellow with the Fort Worth Report. Contact her at firstname.lastname@example.org. At the Fort Worth Report, news decisions are made independently of our board members and financial supporters. Read more about our editorial independence policy here.