Nonprofits fight to survive as donations decline, demand increases

Monday, December 9, 2024
CHAPEL HILL, N.C. (WTVD) -- It's a busy start to the week inside PORCH Chapel-Hill Carrboro.

"I know that PORCH is currently serving more families, working families than ever before," noted co-founder Susan Romaine, who told ABC 11 that more than 700 families are participating in its Fresh Food Program.

Romaine said the idea was borne out of experiences volunteering at her children's public schools.

"I just became increasingly aware of some of the unmet needs in the community, especially around hunger and also other wraparound services," said Romaine.

Based on her experiences at PORCH, in 2015 she co-founded another local nonprofit, Orange County Living Wage.



"Almost all the families who receive food through PORCH are working families. And I had an opportunity while volunteering with PORCH, getting to hear some of their stories, understand some of their challenges. But so many of the families are working full-time jobs and still really, really struggling to make ends meet," said Romaine.

Orange County Living Wage works to encourage local employers to pay a "living wage," providing certification to those who do.

"When a business joins our roster, we promote them in the community as a living-wage employer and try to help bring more customers and patrons through their end clients through their doors," said Romaine.

This year, the living wage in Orange County is $17.65, which will bump up to $19.90 in 2025. The figure is lowered by $1.50 for employers who provide at least half of health insurance premiums. Both amounts are significantly higher than the state minimum wage of $7.25, which is in line with the federal minimum.

"Through the efforts of Orange County Living Wage and so many committed employers in the community, we've raised wages $3.5 million," said Romaine, who noted it onboarded 385 employers, a group that includes PORCH.



Despite that, it will be ending operations later this month. In an e-mail sent to supporters last week, the nonprofit wrote:

"With governmental and philanthropic grants increasingly devoted to direct services, OCLW has been unable to secure the needed funding to sustain its mission of raising wages as a catalyst for the financial security of workers and the economic development of the region."

"We did our best to look for ways to diversify our revenue sources," said Romaine.

She said she will continue her work with PORCH while shifting her focus toward advocacy regarding improving wages and standards of living, including seeking like-minded groups.

"The main funder of the nonprofit sector in the United States are government grants and government payments. Right. So that certainly if they go down, if there's less of them, that's problematic," said Dr. Hans Peter Schmitz, who is the Bob and Carol Mattocks Distinguished Professor in Nonprofit Leadership at NC State University.



"We kind of see it at the federal, state, and local level, and at all three levels there was a huge influx of a variety types of government funding ... that's just now finally ending this year," added David Heinen, Vice President of Public Policy and Advocacy at the North Carolina Center for Nonprofits.

According to the 2023 Nonprofit Work Survey Results, nearly 3 in 4 reported job vacancies, with Giving USA reporting total giving dropping by more than 2% last year when adjusted for inflation. According to the National Center on Charitable Statistics, about 30% of nonprofits close within 10 years.

"If you're looking at the annual reports of giving in the United States, the number of households is dropping every year. It used to be more than 60%, and today we're below 50%, which makes our more high-value donors, more high-wealth donors more powerful in the whole game of their controlling more of the nonprofit sector," said Schmitz.

Some nonprofits in the state have benefitted from that generosity, as philanthropist MacKenzie Scott has made sizeable contributions to Triangle Meals on Wheels, HBCUs, and Durham Public Schools. However, with more than 1.8 million nonprofits in operation, competition exists over limited funding mechanisms.

Another form of competition comes from fundraising platforms, where donors may prefer the immediacy of providing direct aid, rather than toward a larger entity.



"As fewer people are getting a tax deduction for their charitable contributions, if they want to help an individual that (they) know or a particular family, that they can do it more directly with a GoFundMe and the tax considerations aren't there anyway," said Heinen, who pointed to the change in the 2017 federal tax regarding standard deductions.

Both Schmitz and Heinen said they believe that nonprofits' value expands past the immediate monetary donations.

"The nonprofit sector plays a very important role in simply elevating some issues, in simply talking about issues at a more sustained and long-term level," said Schmitz.

"They're looking at where there's the greatest need and really having an impact for that and can be advocating for things that maybe will create some policy changes," Heinen explained.
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