Nonprofit Collaborative Tracks Charitable Giving on Vineyard
By JAMES KINSELLA
Gazette Senior Writer
A new study shows that philanthropic giving to many Island-based
nonprofit organizations fell from 2003 to 2004.
The study, conducted by the Martha's Vineyard Donors
Collaborative, is based on the filings that the organizations are
required to do with the Internal Revenue Service as part of their
nonprofit status.
The collaborative conducted the study, which also is continuing, as
part of its mission to expand philanthropy on the Vineyard.
The 64 nonprofit organizations examined by the collaborative spent
slightly more than $50 million in operating expenses for fiscal year
2003. They raised a total of $14 million in donations for the same
fiscal year, or 26.4 per cent of operating expenses.
The following fiscal year, however, expenses for the 64
organizations rose to $56 million, while charitable donations fell to
$11.5 million, or 20 per cent of operating expenses.
Further, more organizations ended fiscal 2004 with a deficit -
26 - than the previous fiscal year - 17. Eight declared a
deficit for the second year in a row.
"The bottom line is that in 2003, less money was spent and
more money was raised than in 2004," collaborative president
Beatrice Phear said.
She said the collaborative is uncertain why donations fell from 2003
to 2004.
One suspect could be the Vineyard economy, which has been slowing
down. But Ms. Phear said the decline has been evident only the past year
or two, not in the period covered by the study.
Another suspect is political giving, since 2004 was an election
year. She said campaign contributions may have siphoned off money that
usually would have gone to charity.
The proof in the pudding likely will begin to emerge in the coming
months, as fiscal 2005 tax filings by the organizations become available
for analysis. Ms. Phear said lag time of up to a year is common between
the end of an organization's fiscal year and the public
availability of the tax filing for that year.
The collaborative believes the third consecutive filing may reveal
Vineyard nonprofits that are especially in need of help. Although some
organizations may be running deficits now and again as part of a larger
strategy, others might be turning to reserves to make up for a lack of
cash.
The Charities Review Council says that an organization should not
have a persistent operating deficit that occurs in each of three
consecutive years.
On the other hand, the collaborative found in its study that Island
nonprofits are reporting a healthy net asset base, totaling about $122
million. Assets include land, buildings, equipment, investments and bank
accounts.
To conduct the study, the collaborative reviewed form 990s filed by
the organizations with the Internal Revenue Service.
The study was somewhat limited in scope and excluded some of the
larger and smaller nonprofits operating on the Island.
Financial break-outs for donations to Island offices of some of the
larger organizations, such as The Nature Conservancy and The Trustees of
Reservations, are not available using the 990 form. Also, about 30 small
Vineyard-based charities have operating budgets under $25,000 a year and
are not required to file Form 990s, although some do. These
organizations were also excluded from the collaborative study.
Ironically, the study states that it "is often the very
smallest that do important work, and for which even a modest donation
makes a huge difference. Anecdotally, we believe many of these smallest
organizations are struggling."
At present, Ms. Phear estimates, about 100 nonprofit organizations
are active on the Vineyard.
A major question going forward is the effect of the $42 million
capital campaign for the renovation of the Martha's Vineyard
Hospital on giving at other Vineyard charities.
Indeed, the hospital campaign, which already has raised more than
$36 million, is just one of nine Vineyard capital campaigns that
together are seeking more than $103 million.
Ms. Phear said capital campaigns, with their allure of concrete
evidence of giving, can draw money away from the less visible but also
important nonprofit needs, such as operating expenses. Human service
agencies, she said, are especially vulnerable to declines in donations
in such scenarios.
Another question, Ms. Phear said, is to how the collaborative uses
the information from its study. That's still an answer in the
making, but two likely outcomes include the encouragement of more
philanthropy for Vineyard nonprofits, and offering some nonprofits
advice on management and fund-raising.
The study divides Vineyard nonprofits into six fields of service:
civic, conservation and environment, culture and arts, education and
recreation, health and human services, and housing.
Among the study's findings by field:
* Civic: The study placed six organizations in this category,
including the Martha's Vineyard Historical Society, which recently
changed its name to the Martha's Vineyard Museum, and the
Martha's Vineyard Preservation Trust. For fiscal 2004, they raised
$1.3 million in donations, $1.7 million in other income, and had $2.5
million in expenses. One reported a deficit.
* Conservation and environment: The study placed nine
organizations in this category, including the Felix Neck Wildlife Trust
and the Polly Hill Arboretum. In fiscal 2004, they raised $3.3 million
in donations, about $680,000 in other income and had $2.6 million in
expenses. Four ended the year with a deficit.
* Culture and arts: The study placed 13 organizations in this
category, including Featherstone Center for the Arts and The Yard. For
fiscal 2004, they raised about $735,000 in donations, about $722,000 in
other income, and spent $1.6 million. Eight reported a deficit.
* Education and recreation: The study placed 18 organizations
in this category, including the Farm Institute and the Vineyard
Montessori School. In fiscal 2004, they received $2.1 million in
donations, had $1.7 million in other income, and spent $3 million. Nine
reported a deficit.
* Health and human services: The study placed 13 organizations,
including Martha's Vineyard Hospital and Martha's Vineyard
Community Services, in this category. For fiscal 2004, they raised $3.2
million in donations, had $41.9 million in other income, and had
expenses of $42.7 million. Three had a deficit.
* Housing: The study placed six organizations in this category,
including Island Affordable Housing Fund and Island Elderly Housing. In
fiscal 2004, they had about $965,000 in donations, $2.8 million in other
income, and had expenses of $1.5 million. Three reported a deficit.
While Ms. Phear appreciates the information revealed by the two
years' worth of filings, she knows that the passage of time will
tell a truer tale.
"I would like to look at a five-year trend," she said.
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