By Bruce Barton

Economy, Packard cutbacks mean rough road ahead for service organizations

While the flat economy continues to dominate headlines, area non-profit groups, either overlooked or depended on too much during desperate times, are cutting back and hanging on. They, like the Silicon Valley unemployed, are in survival mode looking to ride out the storm.

Despite a 2002 Community Foundation Silicon Valley report that shows nearly eight in 10 local residents still giving to their favorite causes, observers say people are giving less funding to fewer groups. In addition, the state funding on which many non-profits depend is simply no longer there due to the current budget deficit, and the cadre of foundations from which they drew funding also are cutting back significantly.

“We just get, ‘no, no, no, no’ from the foundations,” said Judith Steiner, executive director of Hidden Villa, a Los Altos Hills educational farm and wilderness preserve.

Steiner said she’s witnessed “a dramatic shift in the last two years,” with the number of foundations saying yes dropping from 80 percent of those asked to less than 50 percent. The preserve prospered from the high-times economy just a few years back with a flurry of new construction, including the Wolken Education Center, a new youth hostel and a manager’s headquarters. Now staff has had to take 10 percent pay cuts, with Steiner absorbing a 15 percent cut. “We’ve all shared the pain,” she said.

Last month’s news of the cutbacks in grants and staffing at the venerable David and Lucile Packard Foundation in Los Altos generated concern for people like Hidden Villa’s Steiner.

“They’ve been Hidden Villa’s all-time biggest supporter,” she said. However, Steiner added, “I feel fairly optimistic they’re not going to let go of what they’ve been funding traditionally.”

While the topsy-turvy stock market has rattled foundations such as Packard, which feeds on mostly Hewlett-Packard stock, Michelle McGurk, communications manager for Community Foundation Silicon Valley, said the current state budget woes hurt non-profits even more.

“Even with the impact of the cuts that some major local foundations have announced, the biggest impact on local non-profits will come from state budget cuts,” McGurk said. “Whether it’s direct state funding or local (county/city) funding, the state budget is having a huge impact.”

Tom Myers, executive director of the Mountain View-Los Altos Community Services Agency (CSA), said his organization is healthy financially, thanks to good planning, but its charge - helping needy residents - means there is so much more of the needy to address. This puts a strain on resources.

“We are assured CSA is not in any danger of folding, but we are having a heck of a time trying to get donations to keep up with the demand,” Myers said. “We’re seeing huge increases in people coming to us.”

He noted a 33 percent increase so far this fiscal year over last year. Christmastime will be a test for the agency as workers scramble to match toy and food donations with those asking for them.

“We’re going to take a look at things in January and make some tough decisions,” Myers said. “We’re really cognizant of what’s going on. We all need to be in a very cautious mode right now.”

The number of jobless - the 7.7 percent figure for Santa Clara County in September remains the highest of all Bay Area counties - means “the importance of a safety-net organization like ours becomes doubly important during these lean times,” Myers said.

This holds true as well for the Community Health Awareness Council (CHAC) in Mountain View, which provides free and low-cost counseling services to Los Altos-area youths and adults.

“We’re busier and busier because of the economy,” said executive director Monique Kane. “We’re having the busiest September and October ever in terms of cases.”

For the first time ever this summer, CHAC had a waiting list of clients. Currently, the staff comprises about 25 people, mostly clinical, and about 50-52 mental health interns.

Kane pointed to stress factors such as the down economy and the ongoing talk of war prompting more client visits. She said the stress of unemployment sometimes leads to domestic violence issues involving children. “We’re living with a cloud over our heads,” she said.

The cases they’re seeing range from those trying to find work while sending kids off to college, to poverty cases such as “10 people in one little apartment and kids who can’t do their homework - and kids going to school tired,” Kane said. She noted one woman who was laid off who had to take a job that paid a third of her former salary.

CHAC officials are gearing for their annual campaign kickoff Oct. 23 with the goal of matching the $220,000 raised last year, rather than trying to surpass it. But Kane noted local funding “is what’s keeping us above water a lot. Last year’s (annual campaign) helped a lot.” CHAC also draws funding from the state, county and school districts.

In Los Altos, non-profit organizations such as the Los Altos History Museum and the Los Altos Community Foundation continue to float along in generally good health. One reason is a loyal group of financially secure supporters who continue to help in bad times as well as good.

“New founders (members) are down compared to last year, but we ran a pretty strong campaign last year,” said foundation president Roy Lave. “We have had several new donor-advised funds so those are running ahead of previous years.”

Lave added that donations for the Bus Barn Stage Company, one of the foundation’s primary funding vehicles, were down last year despite good ticket sales.

“We have been discussing a major campaign to renovate the theater, but will probably postpone that because of what we are hearing from potential donors,” Lave said.

Despite the hard times, local non-profits still see strong public support and are trying different and creative strategies to draw more of that support.

“Our annual Duveneck dinner (the Humanitarian Awards held Sept. 28) was our biggest ever with over 500 at the dinner,” Hidden Villa’s Steiner said. “People seem to be rallying. Local people understand - this is a temporary situation.” She added Hidden Villa’s board members raised $200,000 in addition to what they usually give.

Myers said CSA went from one to two days of their monthly “Chefs Who Care” fund-raising dinners. Approximately 50 percent of the proceeds from the events go toward CSA’s Food and Nutrition Center.

McGurk said the Community Foundation Silicon Valley (CFSV), the premier foundation in the county, has taken a leadership role in helping non-profits, thanks to funding from key Los Altos Hills philanthropists and entrepreneurs: Jeff Skoll and Steve Kirsch.

Skoll, through his Skoll Community Fund, initiated a Silicon Valley Urgency Fund last October to help agencies meet increased demands for services at the same time they face declines in donations and government funding. CSA was among those benefiting from a second round of April grants, receiving $15,000.

Skoll, with help from Kirsch and others, contributed $2.5 million for a first round of urgency funding, followed by nearly another $1 million in April. The urgency fund helped 47 agencies in April and 38 from last October.

In addition to the grants, McGurk said CFSV has streamlined grants procedures, worked more closely with local governments, provided expert help to non-profits through workshops in fund raising, grantwriting, government relations and communications.