February 19, 2008
By Aarthi Sivaraman
The Salvation Army is feeling the pinch as it competes with a growing number of charities, including trendy causes, for donations in tough economic times.
On Tuesday, the Salvation Army said it received $118 million through its Red Kettle fund-raising campaign during the 2007 Christmas season. That marks a mere 0.7 percent annual gain -- the smallest since 2002 -- as U.S. consumers wrestled with higher food and fuel costs, falling home prices and the prospect of losing jobs.
Holiday sales rose 3 percent in 2007, making it the lowest-growth period since 2002, according to the National Retail Federation.
"You stop and pause and (think) boy, this could be a real difficult year for us ... and the challenge is, if we don't raise the money, we've got to still respond to the needs of the American public being impacted by all of these negatives," said Major George Hood, National Community Relations Secretary for the Salvation Army.
Excluding 2002, when Red Kettle donations fell 1.3 percent, donations to the Salvation Army have grown in the range of 4.6 percent to 9.1 percent in the past four holiday seasons, which traditionally starts the day after Thanksgiving and ends on Christmas Eve.
Clothes, winter coats and toys add to the list of donations, though the focus is on the cash that U.S. shoppers drop into the red kettles in front of stores.
According to Hood, about 90 percent of shoppers who notice the kettle tend to drop some money into it.
But in 2007, consumers balking at spiking costs and decreasing home values applied the brakes on spending -- cutting holiday purchases, hunting for bargains and thinking twice about where their spare dollars should go.
Sandra Miniutti, a spokeswoman for Charity Navigator, a New Jersey-based nonprofit organization that evaluates charities, said that while the amount that U.S. consumers donate varies slightly with the state of the economy, other factors could also come into play.
One, she said, could be the larger number of charities that have cropped up, and are vying for donations.
But this year, the Salvation Army could have been hurt perhaps because charities for food, the homeless and utilities were simply not in style, Miniutti said.
"Right now, giving to environmental groups is really hot and trendy and it is really at the forefront of folks' minds," she said.
Another concern ahead of the U.S. presidential elections is that money earmarked for charity could be given to political campaigns instead, Miniutti added.
(Reporting by Aarthi Sivaraman, editing by Richard Chang)
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