Charities reeling from the recession

By Aaron Smith, CNNMoney.com staff writer


NEW YORK (CNNMoney.com) -- Charitable organizations have been hit hard by the weak economy.

Donations are way down, even as demand for their services is on the rise, according to a survey from the non-profit research firm GuideStar.

Some 40% of respondents -- including charitable organizations and private foundations - said that contributions declined during the first five months of 2010, compared to the same period the year before, GuideStar said Tuesday.

During the same time period, these organizations said demand for their services surged by 63%.

As a result, 17% of the charities surveyed said they had to cut services, while 11% were forced to lay off employees. Nearly one third of organizations increased their reliance on volunteers, and 17% of them replaced paid staff positions with volunteer spots.

The report surveyed more than 7,000 employees of charitable groups, including 6,434 employees of public charities and 580 from private foundations. Some 8% of respondents said their organizations were in danger of closing.

The bulk of them reported a decline in both the number of individual contributions and the size of donations.

There was one group of charities that bucked the trend: food and nutrition organizations. About 56% of them reported an increase in contributions, while only 24% saw a decline.  To top of page

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