The Central Park Conservancy fundraiser this summer.

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.

The ACRIA fundraiser.

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.”

kvelsey@observer.com

- Rob Lowe, Stephen Colbert, and the cast of Modern Family will be filling in for Robin Roberts on Good Morning America this week while the ABC host undergoes a bone marrow transplant. Hey, we'd take a soggy piece of bread over last week's substitute, Jessica Simpson.

- Would you like to go bowling with Paul Rudd, Rashida Jones, Denis O'Hare, John Oliver, and not one but two stars of a Law&Order franchise? Of course you do. We don't even need to mention that the whole thing's for charity. You were already sold.

- Candace Bushnell keeps having to resettle the same old lawsuit with former manager (and alleged Stanford inspiration) Clifford Streit. She keeps giving him money for his part in helping her get Sex and the City on HBO, and he keeps telling her its not enough. She should just stop and ask herself, WWCBD?

-Alec Baldwin's dream Portlandia role: "A meat salesman with all kinds of charts and graphs of the loins and the sections of the pig and the cow and the organs." Just no pig, please...we're keeping kosher this week.

They might have tried for a bank loan, or made do until they saved enough for the renovation, but neither option was very appealing, so the Hillises did what everyone with a creative vision and a lack of cash seems to do these days: they launched a crowdfunding campaign.

“I don’t think it’s any different or less valid than when PBS or NPR ask people to donate for a free tote bag, or the Kickstarter campaign in Detroit to build a life-size statue of RoboCop,” said Mr. Hillis, who has thus far raised about $7,000 (with two weeks to go on a $50,000 campaign) on Indiegogo. “As long as you’re transparent about where the money is going, you’re putting together something that people want to be a part of.”

Although it might seem counterintuitive—aren’t businesses supposed to get their money by selling things?—crowdfunding has become increasingly popular among entrepreneurs. Using online platforms like Indiegogo, Smallknot and Lucky Ant, businesses have raised money to cover everything from startup costs and special projects to operating expenses. For the business owner, the appeal is obvious: loans are hard to come by, while online fundraising provides access to what is essentially interest-free (and sometimes entirely free) capital, depending on the perks and in-kind services they offer in exchange—which run the gamut from being worth as much as the contribution to a thank you card.

In a place like New York, where hyper-gentrification has driven many popular businesses from neighborhoods, it’s clear that mom-and-pop’s, even popular ones, sometimes require more than patronage to stay afloat. And rather than bemoaning their demise, many people are willing to pay for the luxury of keeping them.

“I think that more and more people are recognizing that small businesses are integral to community identity and they’re also an endangered species in many places,” said Jonathan Bowles, the director of the Center for an Urban Future. “I do think that many people are going to be increasingly putting money up to ensure that their favorite small businesses stay viable.”

But what does it mean for the future of for-profits? Are small businesses capitalist enterprises whose success ought to be determined by the free market, or cultural institutions deserving of our protection and coddling? Can they be both?

“People want to buy local and be more connected to the businesses around them,” said Slava Rubin, the co-founder of Indiegogo, where small businesses have been crowdfunding since 2008. “It’s emotion and commerce coming together.”

Indiegogo is organized around the belief that anyone should be able to raise money for anything, as long as they’re upfront about where the money’s going and what they’re offering in exchange for contributions. Its many successful campaigns prove that people will “fund” or “contribute to”—both Indiegogo and Smallknot insist on using the language of investment and gently but firmly corrected The Observer when we referred to such monies as donations—every endeavor imaginable.

From opening a vegan donut shop (Brooklyn’s Dun-Well Doughnuts) to paying for a couple’s in-vitro fertilization (the first crowdfunded baby was born just recently), people can be surprisingly generous. Sure, some are motivated by the perks or in-kind goods and services that most businesses offer in exchange for cash (Video Free is giving away everything from free rentals to a private screening with comedian David Cross), but others seem moved by little more than the spirit of generosity. Dun-Well, for example, offered a coupon for a free doughnut in exchange for a $25 contribution. It was claimed by 58 people.

In Mr. Rubin’s view, crowdfunding allows for a shift from a basic transaction to a relationship, which is essentially the same thing as branding. “Now small businesses get to create campaigns, gauge interest in new concepts and create lasting relationships with their customers,” he said.

Sarah and Allon Azulai, a husband and wife team who operate Park Slope coffee shop Kos Kaffe, agree that crowdfunding had been an surprisingly fun way to connect with customers. The couple recently ran a Smallknot campaign that raised $4,500 for an awning to block the direct sunlight that routinely cleared out their coffee shop for several hours every afternoon.

“I don’t know if it will change the game for small business, but many small businesses, you’re just making a living,” said Mr. Azuli. “No one is putting away hundreds of thousands of dollars in reserve, so when you need an awning or a new delivery van, you almost always have to go outside to get the money.”

Kos Kaffe offered perks—like cards for free drinks in exchange for $10 investments or a coffee of the month club for $75—which made the whole thing more akin to selling goods ahead of time, Mr. Azuli said.

Indeed, Smallknot is quite insistent that perks be more than mere tokens. “It’s really important that they’re not out there shaking the cup,” Smallknot co-founder Ben Rossen said. “With patronage of the arts or a creative project, it’s easy to give for the sake of giving, but it’s really not the same when you’re giving to an existing business. I think among a lot of business owners, there’s sort of a perception out there that crowdfunding is kind of magical, this idea that people will give me money just because I’m there.”

And while crowdfunding is an excellent way to test whether a new concept will be popular, it does risk triggering resentment from customers who feel that patronizing a business should be enough. Mr. Hillis said that one customer came into the store recently and asked, “Are you the guy begging for money?”

“And while it is the digital equivalent of a handout, I wouldn’t have done it if our linoleum was crappy and we just wanted to replace it,” Mr. Hillis said, adding that he thought it was important that crowdfunding be limited to one-time projects rather than run-of-the mill replacements.

“If you’re a coffee shop and your boiler’s busted and you need a new one, well, you’re a business, you make money, why can’t you get that with your revenue?” Mr. Hillis asked. No one wants to seem like a charity case.
Yassir Raouli, who operates Bistro Truck with his wife, Elsa Leon, said that he was hesitant when Mr. Rossen, a fan of their food truck, first contacted the couple about using Smallknot to help fund Rustic L.E.S., the brick-and-mortar restaurant they’re opening.

“I wasn’t too excited, to be honest. It sounded like we were going to beg for money and I didn’t think it would be good for the brand,” Mr. Raouli said. But he was eventually won over by the platform’s focus on in-kind exchange (and his wife’s enthusiasm). The couple raised $8,000 to buy kitchen equipment, money that came through at a time when things were taking longer than expected and the couple was short on cash.

Jonathan Hack, one of the customers who contributed to Mr. Raouli’s campaign, said that he was moved to participate by his love of Bistro Truck’s food.

“The food is also definitely higher quality than a normal lunch I would get during a workweek and costs a whole lot less,” he wrote us in an email. “With Rustic, it is my understanding that they would bring this simple but creative cooking style to a restaurant setting. This is the sort of restaurant that I like to frequent.”

Many of the small business owners we talked to were, in fact, more than a little surprised by how many of their contributors were not friends, family, or even regular customers. Last year Aurora Anaya-Cerda opened La Casa Azul, a bookstore in East Harlem specializing in Latino literature and bilingual books for children. She raised almost $40,000 raised through Indiegogo. (A private investor matched the amount.)

“Seventy percent were people I didn’t know,” said Ms. Anaya-Cerda, who offered incentives ranging from t-shirts, discounts and autographed books to one’s name on a donor wall. “There were people from East Harlem, but also people from different states, London, South Korea and Australia.” Ms. Anaya-Cerda turned to crowdfunding because banks wouldn’t give her the amount of financing she felt she needed to make a go of it.

“I’m now working harder not just for myself, but for everyone,” Ms. Anaya-Cerda said.

But is crowdfunding really a solution to a lack of bank loans with reasonable interest rates, or retail rents that force out even beloved independents? Ami Kassar, the CEO and founder of MultiFunding, which advises small businesses on lending options, doesn’t think so.

“I’m all in favor of new ways for businesses to access capital,” said Mr. Kassar. “But as a country we shouldn’t be putting all of our eggs in one basket and think we’ve solved the problem. We should be focusing on getting banks to lend to small business. In my mind, crowdfunding is an experiment that’s nascent and I can’t see it having a big impact.”

The looming Securities and Exchange Committee regulations—which offer great promise in that they would allow for equity investing in small businesses—might also prove prohibitively onerous for a lot of mom-and-pop’s, Mr. Kassar said, possibly requiring them to provide costly audited financial statements to raise any crowdfunding capital at all.
“My frustration is that mostly it’s going to help tech startups,” he said. “I can’t personally see it being this magic bombshell. Nothing is as easy as you think it’s going to be.”

Even Amy Cortese, the author of Locavesting: The Revolution in Local Investing and How to Profit From It and a big booster of the practice, thinks that until crowdfunding can offer equity stakes and investment returns, its potential will be limited. Social returns are great, sure—Ms. Cortese noted that she’d contributed $40 to La Casa Azul bookstore even though she lives in Brooklyn and doesn’t know the owner—but she wouldn’t spend her savings on a small business unless she expected the money to earn a decent interest rate of 5 or 10 percent.

“If we really want to shift money from big, bad Wall Street companies to ones that we care about, people will need a return on investment,” said Ms. Cortese. “You can’t retire on a film credit or a t-shirt.”

kvelsey@observer.com

Rossi.

Yesterday The Observer trekked down to Sarah D. Roosevelt Park to watch a little football. And we mean real football.  Basketballer Steve Nash held his annual soccer match, Showdown in Chinatown, in which fellow kings of the court join forces with international soccer stars to raise money for Nash’s foundation.

The result? A hilarious mélange of sports phenoms, of giant and diminutive statures, kicking it for a good cause.  As Nash’s foundation focuses on children’s health and education, kids really were the centerpiece of the event. Before the game a smattering of young soccer players scrimmaged around the turf pitch and, when the stars showed up at the filed, ran around in energetic circuits asking for autographs. The players all obliged, smiling as they did so.

We talked with Steve Nash who described the philosophy behind the event. “Its about putting on a show for the fans in New York and this community. Its free to the public to just walk up to this field and see some of their favorite basketball and soccer players and at the same time raise some money for children’s foundations for my charity,” Nash excitedly explained.

Tony Parker, who displayed some fancy footwork of his own during the match, talked to reporters about trade rumors.  “The NBA’s a business, you can’t control that. I’m not going to worry about that. So hopefully I can stay in San Antonio,” Parker said. But when a passing New Yorker playfully shouted “You going to look good in that Knicks Uniform, man,” Parker chuckled knowingly, perhaps.

A whole section of fans, all donning Italian jerseys, chanted an impressive repertoire of cheers for Jersey-born player Giuseppe Rossi. With dual Italian and American citizenship, the talented Rossi played for Italy in the World Cup last summer.  At halftime, Rossi divulged his love of New York through an accent that would make even The Situation blush. “New York’s beautiful. I live in New Jersey so I come often. And it’s my favorite city,” he said. An American who plays for Italy and a Jersey boy who loves New York. We sense a theme.

The game its self was a sight to behold. The players ran up and down the kid-sized field trying not to hit any fans who were packed around the sides of the field and in the bleachers. The Observser stood just behind Steve Nash’s young son who spent much of the first half chewing on the dreadlocks of ESPN commentator LZ Granderson.

Unfortunately the ominous skies broke just after halftime and we were forced to flee the field in an increasingly see-through white dress.  Rain aside, the afternoon was a huge success for the Steve Nash Foundation and the fans, especially the kids, couldn’t have been happier.

The press release is below:

With your help we raised over $1,000,000 to fight HIV/AIDS in Africa and India. Your generous donations will help bring critical care and medicine to the millions affected by this horrible disease. But so many more still need help. Please continue to BUY LIFE – the one thing none of us can alive [sic] without.

$1 million for AIDS relief is undoubtedly a good thing, but for those of you getting used to a Gaga-less Twitterverse, you're out of luck.

nfreeman [at] observer.com | @nfreeman1234

Now Hughes, who is based in New York, has launched the Beta version of Jumo, a social network that hopes to connect individuals working for global change. He described his vision for Jumo on the company blog.

I have a problem: it's hard to find smart people doing meaningful work on the issues I care about. I'm sure they're out there, but I can't find them.

Occasionally, if I do find them, a second problem arises: it's hard to keep up with them. As fast as they enter my consciousness, they leave it. For all of our fancy tech ingenuity, it's a marvel to me that it's so hard to connect to the things I care about.

When I founded Jumo earlier this year, I had simple vision: use networking technology to connect individuals and organizations working for global change. I wanted to build a network to help everyday people find, follow, and support those working day in and day out to make change happen in our communities and in regions around the world.

The site's setup is intuitive for any Facebooker. Clicking on the tab marked HIV/AIDS from the Jumo homepage takes users to an issue page where they can follow a newsfeed about work related to the disease, join groups combating the problem and connect with other users working on this issue.

Malcolm Gladwell set off a heated debate recently when he wrote that social networks undermined real activism by making it easy for people to support a cause without committing to any real-world activity. Perhaps Jumo, which uses social networking to connect activists time, money and skills with ongoing projects, can help to disprove Gladwell's argument.

bpopper [at] observer.com | @benpopper

Gaga is just one of many high-profile celebs who have sworn off Twitter and Facebook for the greater good. Alicia Keys, who co-founded the foundation, has recruited Elijah Wood, Jennifer Hudson, Ryan Seacrest and Kim and Khloe Kardashian, among others. 

The fundraiser is slated to take place Wednesday, in order to coincide with World Aids Day.

While her Twitter followers - who she refers to endearingly as "Little Monsters" - may empty their bank accounts for the noble cause as they suffer from Gaga Tweet Withdrawal, what about the millions more who want her to stay off Twitter? Can there be a dueling charity we can donate to if we want that to happen?

nfreeman [at] observer.com | @nfreeman1234

Slim said that the "Santa Claus" route is not for him -- a surprising analysis, given his grey beard and slightly portly silhouette. "Trillions of dollars have been given to charity in the last 50 years, and they don't solve anything," says Slim.

The Journal is quick to point out that Slim does care about improving the lot of the less fortunate. He just thinks the wealthy are more effective at helping people when they grow their businesses and employ additional workers. He's also contributed hundreds of millions of dollars to his own foundation as well as that of Bill and Melinda Gates. Still, he hasn't signed up to give half his net worth to charity, brushing aside the gauntlet thrown down by the Gates and Warren Buffett.

mtaylor@observer.com

Twitter: @mbrookstaylor

But now David Kirkpatrick, who wrote the Zuckerberg friendly book, The Facebook Effect, reports that Zuckerberg and Co. didn't want to announce the donation for fear of seeming crass. The poor timing was the all idea of Newark Mayor and New Jersey Governor Chris Christy.

An insider told Kirkpatrick that the pols insisted the money be announced now, "In order to sync up the announcement with other events that were important to the potential revival of Newark schools." That's a funny rationale, since the negative press about the donation's overlap with the film is pretty sure to drown out any news about good works at Newark schools.

Bloomberg reports that Munger, speaking at the University of Michigan last week, said that people who're suffering in the current economic climate should "suck it in and cope." After praising bank bailouts, he breaks out this little gem: "Now, if you talk about bailouts for everybody else, there comes a place where if you just start bailing out all the individuals instead of telling them to adapt, the culture dies."

Saying that the economy would have been much worse without the bailout, and so "I think when you have troubles like that you shouldn't be bitching about a little bailout."

Then he said that Germany in the 1920s didn't manage its de-stabilized economy effectively, and what happened next? "We ended up with Adolf Hitler."