Last month, more than 700 tuxedoed and ball-gowned revelers gathered in the Museum of Natural History’s Milstein Hall of Ocean Life for the annual S.L.E. Lupus Foundation gala. As the attendees feasted on black American caviar, Margaret Dowd, the foundation’s executive director, was marveling at something else: the size of the crowd.
The foundation had not seen so many people at its annual gala since 2007. “It’s been very tough the last few years, and we had to cut expenses drastically,” she said. “In 2009, many of our donors said, ‘Our portfolios were really harmed and we have to cut our donations, but we’ll be back.’ And they did come back. This year has been much, much better.”
The benefit raised $2.5 million—a significant jump from the $2.2 million raised at last year’s. Things have not returned to the 2007 level, when the gala’s $3.2 million haul set a national record, which has yet to be topped, for lupus research funds collected at a single event, but the foundation is on track to raise 10 to 12 percent more this year than the previous one. Ms. Dowd added that the nonprofit’s spring luncheon saw such a dramatic spike in attendance this year—a 30 percent increase—that next year they plan to hold it in the Plaza.
In the months after Lehman Brothers collapsed, when it looked like the country’s financial system might fall along with it, the city’s nonprofits, long buoyed by Wall Street successes, learned that they would also share in its misfortunes. Staffs were sheared, budgets slashed, plans delayed, visions clouded. Charitable giving fell by 15.2 percent in 2008 and 2009, according to Giving USA, the annual tally of American philanthropy.
During the depths of the recession, flashy parties, even if they were for a good cause, could seem a little déclassé. Making a show of how much money one had to give away called attention to one’s ridiculously good fortune, even though the recession left nonprofits more in need than they ever had been before.
“We have donors who, like many others in New York, are so wealthy that if they never saw another nickel of earned income it wouldn’t matter. They have more than they could ever spend,” said the head of a nonprofit who asked not to be identified. “For the people who really have the means, what you really want is for those people to give more and not less in tough economic times. And yet they were cutting back.”
From 2007 to 2009, giving by people with incomes of $200,000 or more dropped by $31 billion. Now, for the first time since the recession struck, a number of New York nonprofits say that 2012 looks like the year when the tide has finally turned. Gifts are more generous, long-dormant donors are reappearing and philanthropists are once again crowding cheek-by-jowl at charity galas, dining and dancing with checkbooks in hand.
On Monday afternoon, New York real estate billionaire Mort Zuckerman announced a $200 million gift to Columbia University to study brain behavior. The gift is twice the size of the $100 million donation that hedge fund billionaire John A. Paulson made to the Central Park Conservancy this October—the largest ever to a New York City park. The previous record had been set just a few months before, in April, when amateur track cyclist Joshua P. Rechnitz pledged $40 million to Brooklyn Bridge Park to fund a field house and a velodrome with seating for 1,200 spectators. But even in April, $40 million paled in comparison to the $60 million gift David Koch made in February to redo the Metropolitan Museum of Art’s Fifth Avenue plaza.
The Central Park Conservancy was already on the path to one of its best years in a long time. Not only have smaller donations grown in 2012, but so has the pool of people making them; like many agencies, the conservancy has been recruiting younger philanthropists via social media and special events.
Conservancy spokesperson Dena Libner called 2012 a “strong year,” but, like virtually all the other nonprofits we spoke with for this story, she warned that the official tally would have to wait until 2013. Typically, the last few weeks of the year are among the busiest in the fund-raising world, with many racking up 25 to 30 percent of all annual funding during the holidays.
At its annual dinner this November, the AIDS Community Research Initiative of America hosted the largest crowd it’s had in years—275 guests, up by about 70 from the previous year. The low point for the nonprofit’s major fund-raiser came in 2008, when the dinner drew only 170 people.
“We certainly have donors who make a good living by general American standards, but they’re upper middle class by New York standards,” said executive director Dan Tietz. “For them, in bad economic conditions, they think twice about whether they should buy a ticket or not.”
Mr. Tietz explained that this year, he and several other colleagues have noticed that the hesitation is gone—charity event attendance seems to be up across the board. “Now, we’re definitely seeing a willingness to give.”
Also tracking about 25 percent ahead of last year is the Breast Cancer Research Foundation, according to foundation president Myra Biblowit. She noted that the November 2011 ovarian cancer death of Evelyn Lauder, the businesswoman and socialite, may have encouraged people to give. “People also adored and revered Evelyn Lauder. Her passing was a huge loss to the world. I think people want to pay tribute to a remarkable person.”
Among performing arts groups, BAM, Lincoln Center and the Atlantic Theater Company are all reporting 2012 increases in fund-raising, an impressive feat, given that both Lincoln Center and the Atlantic Theater Company are also in the midst of capital campaigns.
BAM president Karen Brooks Hopkins noted that the academy has seen some major gifts this year, largely in conjunction with its 150th anniversary. Chase sponsored the anniversary with a gift of $1.95 million over two years, the Irene Diamond Fund contributed $5 million, McGarryBowen gave an in-kind contribution for the “BAM and Then It Hits You” campaign and the Stavros Niarchos Foundation coughed up another $1 million.
The Atlantic Theater Company has seen a 40 percent increase in gifts from individuals this year over the same period last year. As new donations have increased only 5 percent, the 40 percent increase is coming predominantly from larger gifts from renewing supporters.
Walter Sweet, the vice president of Rockefeller Philanthropy Advisors, told The Observer that while he has seen a bump in charitable giving among his clients, they’re not necessarily giving in the same way they once did.
Donors are no longer content to blithely hand out signed checks and continue on their way. Now they want to see results, to know how their money is being used, to feel actively involved. “They want impact,” Mr. Sweet said.
It’s worth noting that not all groups have been so lucky—the Metropolitan Opera is preparing to sell bonds for the first time since its 1883 founding to cover operating losses.
What’s more, outside of the New York area, nonprofits have had a more mixed record of success. Although the 400 most successful charities nationwide saw 7.5 percent growth in 2011, according to The Chronicle of Philanthropy, they expect flat growth this year, along with donations from some of the 166 largest companies in the United States, the majority of which said that they expect to keep their philanthropy budgets flat this year (although some, like Starbucks, increased their giving by 197 percent).
Kathleen McCarthy, the founding director of the Center on Philanthropy and Civil Society at The CUNY Graduate Center, said that the disparate performance between nonprofits either based in New York or with strong New York connections and the rest of the country boils down to the wealth gap.
“I think what you’re seeing may be a phenomenon of the social gulf,” said Ms. McCarthy. “The rich are giving more, and they’re giving more now because now is when they can get the tax break.”
The end of the year is generally a time when wealthy individuals take account of their tax situations, but this year in particular the looming fiscal cliff and less favorable tax breaks for the wealthy have encouraged potential donors to give now rather than later. One of President Obama’s proposals would drop the tax break that households earning more than $250,000 can get for their charitable gifts from 35 to 28 percent.
Lauren Katzowitz Shenfield, who leads Philanthropy Advisors, an organization that advises individual, corporate and foundation philanthropists, including heavy-hitters like Exxon Corporation and the Ford Foundation, told The Observer that the likelihood of a smaller tax exemption is fueling a flurry of year-end donations.
Hurricane Sandy, of course, is the wild card of 2012. David Saltzman, the executive director of the Robin Hood Foundation, said that the antipoverty group will be holding its breath these next few weeks to see if holiday giving is as strong as it usually is.
“Our fear is that people who have been so generous giving to Sandy relief might not be able to donate to poverty relief. Our hope is that they can dig a little deeper,” said Mr. Saltzman. “I think that people are remarkably generous when they know they can make a difference, and this is a year where people can make a difference.”
The HOPE Program, another antipoverty initiative, also admitted that Sandy had left it a little bit nervous about holiday giving, but at the moment, the nonprofit is about 20 percent ahead of schedule.
Sandy proved a more direct challenge for the Hetrick-Martin Institute, a nonprofit that provides services to LGBT youth. Its annual gala was scheduled for October 29, the day the hurricane hit. It had to be canceled and replaced later with a more modest cocktail reception. But despite the setback, Hetrick-Martin is still on schedule to meet its fund-raising goal this year.
Glenn Yabu and George Pushelberg of international design firm Yabu Pushelberg were two of the donors who stepped up to help make up the difference, sponsoring an emergency initiative that raised more than $70,000.
“While our personal donations reflect increasing support as the agency’s needs have increased this year, we also looked to other ways to reach even further,” they wrote in a joint e-mail to The Observer. “Sometimes it’s making a donation directly to your charity of choice, and sometimes it’s working with the development staff on creative ways to boost donations.”