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In Charlotte, a city with a national reputation for its can-do spirit, the old ways of meeting the greater good no longer work.
The recession, the banking crisis and a United Way CEO scandal have left local leaders staring at an uncomfortably near future in which hidden camps of homeless families sprout around the city, the symphony orchestra disappears, and more high school dropouts wonder where to turn.
Charlotte, once ranked second nationally in charitable giving and volunteering, has yet to come up with an answer. On July 1, the city begins a budget year of almost unprecedented community needs.
Brace yourself, one charity official warns.
“There is going to be greater need, right in the face of everybody,” says Georgia Krueger, executive director of the Ada Jenkins Center in Davidson. “In some cases, people have tried to hide from it. In other cases, people just didn't recognize it, because it wasn't in their backyard.
“But I don't think they'll be able to hide from it now. It's going to be in your face.”
The director of the Salvation Army's Center of Hope shelter for homeless women and children can see it coming already.
“I believe we'll see more camps of homeless people,” said Deronda Metz, “and I believe we'll see some with entire families.”
Michael Marsicano, head of the Foundation for the Carolinas, has been crisscrossing the city, warning civic leaders. He said nonprofits usually hedge against bad times by nurturing multiple streams of income.
“Never before have I seen all of those income sources decline so dramatically at one time,” he says.
Big banks, the city's charitable cornerstones, are laying off workers by the hundreds. The scandal-weary United Way is slashing gifts to its agencies by 40 percent. Churches are struggling, government support for nonprofits is shriveling, and private philanthropic foundations are reeling from stock market losses.
New solutions are needed. The foundation came up with one last December to help meet rising winter demand for food, clothing and shelter. The Critical Need Response Fund raised more than $2.7 million over four months, starting with $1 million from Family Dollar stores founder Leon Levine and his wife, Sandra.
More must be done. As tough as times are for nonprofits across the country, things might be even worse in Charlotte.
Consider:
The United Way's 2008 campaign, hurt by controversy over former CEO Gloria Pace King's pay, fell $15 million below the previous year, a 33 percent decline. By contrast, other large United Ways report drops of less than 6 percent, according to the United Way of America.
Conservatively estimated, falling income and soaring demand leave the 90-plus United Way charities staring at a collective shortfall of about $17 million.
Grants from foundations are expected to decline, too. Donations at The Foundation for the Carolinas, a key local grantmaker, fell from $263 million in 2007 to $78 million last year. So far, first-quarter grants have kept up with last year's pace, but national projections suggest they'll fall again.
The Charlotte region's unemployment rate is worse than most places, spurred by financial layoffs and by transplants who arrive without jobs.
Unemployment has risen to 11.4 percent – bad enough to rank the city 305th out of 372 metropolitan areas in a recent federal analysis. In February, the area shed 2,900 finance and insurance jobs – nearly triple the size of any previous loss.
Such cuts sting charities. Until recently, the banks' money and manpower made Charlotte's nonprofit sector “the envy of every city in America,” Marsicano says.
Nonprofits that serve poor people aren't the only ones struggling. Donations at the Arts & Science Council fell by about $4 million, a 36 percent drop, in its most recent campaign.
Churches are hurting, too. Love INC, a faith-based charity, has had a nearly 35 percent drop in donations from congregations.
“It just hasn't ever been like this before,” says Sharon Portwood, head of UNC Charlotte's Institute for Social Capital. “I hope we come out of this and I die before it ever gets this bad again.”
Trisha Lester, a vice president with the N.C. Center for Nonprofits, says the crisis can be overcome, but nonprofits can't do it alone.
“People really need to be supporting the charitable causes they care about,” she says. “This, more than ever, is when the rubber hits the road.”
Staff writer Kerry Hall contributed.
