Charities Worry As Cash Floods Into New York.

L.A.-area charities are bracing for a serious downturn in donations during the fourth quarter, traditionally their most productive period, because contributors have become so focused on supporting victims of the Sept. 11 terrorist attacks back East.

While the overall charity pie has gotten larger in the wake of the attacks, the recent wave of giving may leave local organizations with a smaller slice for causes ranging from disabled children to the environment.

"The other charities (not related to disaster-relief efforts) are going to feel Pain: Triggers outpouring of help. it," said United Way of Greater Los Angeles President Joe Haggerty. Campaign Chairman Dominic Ng concurred that the past two weeks "dried out a lot of discretionary donations."

King McGlaughon, director of the center of philanthropy and non-profit management for Merrill Lynch, said his client base of 32,000 non-profit organizations nationwide is worried. "There are growing concerns about the ability of non-disaster-related orgs to meet their budgets," said McGlaughon. "They fear that there will be a reduction in normal giving."

Most immediately affected were charities engaged in pledge drives when the attacks hit. "We were in the midst of a telemarketing campaign, and we just stopped that," said Kelley Skumautz, development director of Heal the Bay in Santa Monica.

As of late last week, an estimated $600 million had been raised for disaster relief nationwide, $150 million of which was generated by the "America: A Tribute to Heroes" telethon broadcast Sept. 21, according to The Chronicle of Philanthropy.

"You do have an unprecedented amount of private wealth that is being transferred to agencies providing disaster relief," said McGlaughon. "We knew Americans were generous, but we are stunned."

While the outpouring has been impressive, the $600 million in disaster-relief donations represents just 0.3 percent of the $200 billion that Americans typically donate to charitable causes each year. That's a point local charities want to drive home.

"There's a risk on the part of the public in general to almost think that we've given more than we can possibly give, and they change their normal behavior and step back (from giving to other charities)," said McGlaughon. "It's important for the non-profit community to say, 'This is a drop in your bucket.'"

Some fund-raisers believe the tragedy might unleash a new wave of broad-based giving. "It may have revived a tradition of philanthropy, hopefully creating donors," said Ritchie Geysel, president of Pasadena-based Ability First, whose cause is disabled children.

Skittishness prevails

Still, Americans are feeling very skittish, as reflected by a plunge in the September consumer confidence index. And nervous consumers tend to be less-generous givers. A related complication: the steep sell-off on Wall Street following the attacks.

"When you have a trillion and a half dollars (in stock value) disappear in five days, it affects people's mindset," said Michael Weinstein, president of AIDS Healthcare Foundation in Los Angeles.

Charities that are largely dependent on corporate donations may be more immune. Miyoko Oshima, president of Southern California Association of Philanthropy, noted that corporations, that set up charitable foundations often determine annual donation amounts before the beginning of the year. But both Judith Lewis, chief executive of Make-A-Wish Foundation of Greater Los Angeles, and Sknmautz of Heal the Bay said there would be an impact. "We're pretty sure, we're going to see a decline in corporate donations," said Skumautz, who oversees $2 million a year in donations. "We're prepared to take a hit."

Oshima, whose organization handled $500 million in grants from last year, also noted that the economic downturn, exacerbated by the attacks, would be reflected in the donation budgets that foundations set for 2002.

As for charities that receive a large portion of annual funds from individual donors, the effect on donations will he magnified because the fourth quarter is so important to charities.

Prime time for giving

While Ng said that United Way's donations are fairly even throughout the year, philanthropy expert McGlaughon puts the fourth-quarter proportion of annual donations at over 50 percent for the typical charity.

Not everyone is convinced that L.A.-area charities will be adversely affected by the attacks and recession.

Torie Osborn, executive director of Santa Monica-based The Liberty Hill Foundation, said that the Los Angeles riots forced Angelenos to take a closer look at social issues. She noted that Liberty Hill's funds doubled between 1992 and 1993. "That was a flash-point to more philanthropy being put into L.A.'s backyard," she said.

McGlaughon pointed out that the state with the highest growth rate of permanent charitable, foundations over the past 10 years was California, while 10 percent of his division's foundation clients are located in Los Angeles.