Good bye, BLACK TIE Corporate donations are down, forcing Health Care for the Homeless and other charities to scramble for money.

November 18, 1991|By David Conn

Last fall, the downtown Hyatt Regency hotel was resplendent. More than 500 guests, in tuxedos and evening gowns, circulated through 12 artfully decorated rooms, each featuring a celebrity cook whipping up gourmet meals for the guests. The Baltimore-area March of Dimes' sixth annual "Gourmet Gala," raised more than $100,000 for the organization's fight against infant mortality.

But this year only three companies -- compared to 12 in 1990 -- agreed to donate $5,000 each toward the event. By mid-September, after Maryland National Bank, USF&G Corp., Signet Bank, First National Bank and others declined to sponsor a booth, chapter president James Donovan canceled the event.

"It became obvious with these losses early on that it was going to be extremely difficult to do it and do it profitably," Mr. Donovan says. "How could they dress up in a black tie and eat a gourmet dinner? It would project the wrong image."

A more fitting image for many Maryland companies might be T-shirts and TV dinners. The United Way of Central Maryland calculated that more than 10,000 people have been laid off this year from the charity's top 50 corporate donors. Bankruptcy filings in Maryland, which rose 22 percent in 1990, were up almost 50 percent through the middle of last month, to 11,657.

As the recession continues to ravage Maryland's economy, the second-tier victims are the non-profit organizations. The 10 percent annual increases, in real dollars, that corporations gave charities during the mid-1980s have deteriorated over the last five years. In 1990, gifts from corporations nationwide fell 2.4 percent after inflation, according to the Chronicle of Philanthropy, a newspaper for non-profits.

Businesses seem to be trying harder, the Chronicle reports: the share of pre-tax income donated to non-profits rose slightly to 1.96 percent last year. But because overall pre-tax profits fell by $3 billion -- to $305 billion -- the marginal increase in gifts was overcome by inflation. The paper says the same pattern can be expected this year.

And though a nasty cold among the non-profits may not give the rest of the community pneumonia, it should send an ominous chill.

That's because non-profits, sometimes called "the invisible sector" of the economy, are a sizable industry in themselves. According to a 1990 report, Central Maryland's non-profits in 1987 paid salaries of $1.3 billion to almost 71,000 employees, more people than the state's three largest manufacturing industries combined. Non-profit expenditures topped $2.5 billion in 1987, more than all of the region's local governments combined, according to the report by the Johns Hopkins Institute for Policy Studies.

And this recession has made the invisible sector visible to many more segments of society. In October, for example, the state Medicaid payroll reached its highest level since 1981.

Meanwhile, the Jewish Vocational Service has seen its caseload of unemployed clients increase 41 percent in the first half of the year, primarily because of laid-off middle managers.

Jackie Gaines sees the recession's effects at street level. As director of Health Care for the Homeless Inc., the only statewide organization providing basic medical and mental health care to the homeless, Ms. Gaines is seeing more families coming through her doors and being served on the streets through HCH's outreach program.

The primary cause of homelessness is shifting from dysfunctional persons to economic distress: They're not all mentally ill, most simply lost their jobs, according to Ms. Gaines. On a chill November afternoon, HCH's downtown Baltimore clinic is standing room only; the 20 or so waiting patients fill the small room. Ms. Gaines, smiling to some of the patients who greet her, says this is a slow day.

The recession has most human service organizations bursting at the seams. But when HCH held its second annual $50 a head "Comic Care" fund-raiser earlier this month, about 20 percent fewer people and companies bought tickets than last year.

" 'Yes, Jackie, your cause is really important, but we don't have any money to give,' " Ms. Gaines says companies are telling her. " 'We've closed our corporate giving office.' "

That's a common response these days among corporations.

MNC Financial Inc. is still meeting its long-term charitable obligations and its annual United Way contribution, according to spokesman Daniel G. Finney. But "since September of 1990 we haven't made any new contributions to charities," he says. That's a loss of about $2 million a year to the region's non-profits.

USF&G Corp., which gave $3.1 million last year, has cut back by more than a third this year. "The company is trying to balance the harsh realities of current economic conditions with its cost-reduction and business-refocusing programs," USF&G said in a statement.

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