Chattanooga Nonprofits Face Challenges as Giving Declines
In Chattanooga, a city buzzing with nonprofit activity, a troubling trend is emerging. Local organizations, which play a crucial role in supporting the community, are experiencing a significant decline in charitable donations. This situation has left many leaders scrambling to find a way to keep their missions alive.
A Helping Hand Turns into a Struggle
Phil Trammell, the Executive Director of the Chattanooga’s Nonprofit Resource Center, is no stranger to the challenges faced by nonprofits today. He often fields calls from hopeful individuals looking to start new organizations or needing assistance with tax questions. But despite his best efforts, he has noticed a worrying trend. “It’s harder than ever to raise money,” Trammell expressed during a recent phone call. “And for medium and small nonprofits, it’s even tougher.”
The facts back him up. According to a recent report from the Fundraising Effectiveness Project, nonprofits across the nation have experienced a “near-universal decline” in both fundraising dollars and donor participation since the onset of the pandemic. Chattanooga, home to around 3,500 nonprofits, mirrors this national downturn.
The Shift in Donor Behavior
Interestingly, while the number of donors has decreased, the size of some donations has increased. This means that a smaller pool of generous individuals is stepping up to fill the gap, leading to a concentration of funding among a select few. While generous, this trend poses a long-term sustainability risk for the multitude of organizations that rely on a wide base of community support.
“There are two types of nonprofits that emerged during the pandemic,” Trammell explained. “Those focusing on the essentials of life—like food and shelter—and those enhancing our quality of life, such as arts and culture.” During 2020 and 2021, organizations providing essentials enjoyed a surge in support. However, when the government attention and assistance started to fade, those same organizations found themselves without sustainable funding.
The Food Bank’s Roller Coaster
One organization that witnessed this surge is the Chattanooga Food Bank. Spokesperson Jeannine Carpenter noted how community support skyrocketed during the pandemic. “We saw almost radical generosity,” Carpenter shared, “but unfortunately, that support is now declining.” Despite the drop in donations, the need for food assistance continues to increase every month.
As costs soar—just like everyone’s grocery bill—some long-time donors have chosen to give less. To combat falling donations, the food bank has set a brave goal to apply for 25% more grants. However, Trammell cautioned that relying on grants can be risky as they often target specific programs rather than general operational needs.
Changing Donation Trends
Interestingly, many donors are taking a more involved approach to their giving. Executive Director of the Southeast Tennessee chapter of the American Red Cross, Julia Wright, explained that many donors are eager to understand the impact of their contributions and want to get personally involved. “It’s not just about financial support,” Wright stated. “People want to make a hands-on difference.”
This shift has led to an increase in non-traditional giving options, such as donor-advised funds and stock donations, which offer greater flexibility and potential tax benefits for contributors.
Returning to Normal but Forgetting the Cause
The United Way is also feeling the pinch, reporting a decline in donations. Vice President of Community and Corporate Engagement, Terran Anderson, noted, “After being very generous during 2020 and 2021, people seem to have returned to their everyday lives, forgetting about the ongoing struggles many organizations face.”
Interestingly, the most common donation amount collected from workplaces partnering with the United Way is $52 a year, indicating many donors opt for small, consistent contributions. “I don’t care if you give a dollar a week or $10,000 a week; you are a philanthropist,” Anderson said, highlighting the importance of all donations, big or small.
The Road Ahead for Nonprofits
The rise in inflation and other economic pressures continue to impact both donors and nonprofits. As expenses for salaries and operational costs rise, the challenge will only become more significant. For Chattanooga nonprofits, adapting to changes while keeping their missions alive is more crucial than ever.
As 2024 unfolds, the collective effort of the community will define the future of these vital organizations. Whether through financial support or volunteer involvement, every contribution makes a difference.
