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Nonprofits grow in numbers despite long odds

4:53 PM, Feb 2, 2013   |    comments
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By Mike Chalmers
The (Wilmington, Del.) News Journal

WILMINGTON, Del. - When Josh Wharton and his friends in Laurel heard about a family whose daughter had a malignant brain tumor last year, they wanted to help.

They raised money to give her an iPod Touch for Christmas, and that led to requests to help other families in need. That led to more donations, then more requests.

"We've been doing things for the community, but we haven't had a name or a tax ID or anything official," Wharton said. "I keep telling everyone, we've got to do this the right way. We want people to know we're legit."

So in December, they incorporated in Delaware as the Good Ole Boy Foundation and applied to the IRS for tax-exempt status. If approved -- most likely "when approved," since the IRS grants 98 percent of applications -- the group will become the newest in a growing community of Delaware nonprofits.

Over the past 12 years, the number of public charities registered in Delaware has grown 65 percent, from 1,925 in 2000 to almost 3,200 today. Nationally, the number of public charities is up 50 percent, from about 643,000 in 2000 to more than 965,000 today.

"Since 9/11, there's been more of a -- I don't mean this to sound pejorative -- knee-jerk reaction to start a new charity whenever something goes wrong," said Chuck McLean, vice president of research for GuideStar, which collects, analyzes and distributes information about nonprofits.

"Somebody gets excited about something and thinks, 'I can do this better than other people,'" McLean said. "Very few of these charities are going to last."

Most nonprofits are small: More than a third of the Delaware charities reported income of less than $25,000 on their most recent financial statements. Among those formed in 2012 are nonprofits focused on homes for pregnant teenagers and fleece blankets for foster children, a hemp-promotion festival in Philadelphia and Christian ministries around the world, hockey and baseball, old dogs and diabetic cats.

The newest charities are entering a tough world. A new report found that almost half of Delaware's 1,100 most active charities -- those filing annual financial statements with incomes more than $25,000 -- spent more money than they collected in 2010, the most recent year for which comprehensive statistics are available.

The growth of nonprofits has been a long-term trend nationwide, said Kirsten Gronbjerg, a professor at Indiana University's Center on Philanthropy.

"We tend to think of organizations as the way we do things," she said. "This is one of the ways that people become involved in their communities."

Many nonprofits survived the recession on federal stimulus money for child care, job training and other services, said Alan Abramson, director of the Center for Nonprofit Management, Philanthropy and Policy at George Mason University in Fairfax, Va.

Now some pruning of the nonprofit sector is likely because the federal stimulus largely has ended and because corporations, foundations and individual donors have become more discriminating with their limited dollars, Abramson said.

That's natural and healthy, said Tom Pollak, director of the Urban Institute's National Center for Charitable Statistics.

"Let a hundred flowers bloom, and if 98 of them die, at least there are two that are great," Pollak said.

The IRS has been trimming its nonprofit rolls in the past two years by revoking the tax-exempt status of charities nationwide that had failed to file annual financial statements for at least three consecutive years. Many of those nonprofits have since filed the reports and renewed their nonprofit status.

Christopher Grundner, president of the Delaware Alliance for Nonprofit Advancement, reminds people of the responsibility of those administrative tasks whenever they ask for help starting a nonprofit.

"You don't want to squash people's dreams, but you want to challenge them: Why do you want to do this?" Grundner said.

In 2005, after his wife died of a brain tumor, Grundner started the nonprofit Kelly Heinz-Grundner Foundation to make doctors and the public aware of the signs of brain tumors. It later merged with the National Brain Tumor Society.

"The first two years I had to spend building the organization, and all of that took me away from actually raising the awareness," Grundner said. "Once it was running, I was still spending 50 percent of my time keeping the lights on and filing the paperwork."

Grundner and other experts say more people should work with existing nonprofits to create or build a program, instead of starting a new organization from scratch.

Yet many people who've started nonprofits recently say they did so because no other organization was doing the work they wanted to do.

Venita Wood, of Wilmington, said she formed the nonprofit Diabetic Cats in Need last year after discovering many people who couldn't afford to care for their diabetic cats. The group now helps find new homes for about three cats a month and currently has 17 cats in foster homes around the country. The group gets about $60,000 in donations a year, more than two-thirds of which is earmarked for the care of specific cats in shelters or foster homes.

"If there had been another organization, I would have just helped them," said Wood, who is on Social Security disability and does not get a salary from her nonprofit.

Many of Delaware's new nonprofits are focused on animals, the data show. The number of animal-related charities in Delaware has tripled, from 22 in 2000 to 67 at the end of 2012, including nine formed last year. Nationwide, there are nearly 19,000 animal-related charities, up from 8,200 in 2000.

One of Delaware's newest is Senior Dog Haven and Hospice.

Dana Rubenstein, the group's treasurer, said she and three friends -- all of whom had volunteered with various animal rescue groups in the past -- share a love of older dogs and a desire to save them from languishing in shelters or being euthanized because they don't get adopted.

"Everybody walks into a rescue and it's the cute little puppy that gets their attention," Rubenstein said. "We realized there's this need for a rescue organization that can focus on senior dogs."

They organized last summer by drafting bylaws, becoming incorporated in Delaware and filing their IRS application for nonprofit status, which was granted in September.

They expected to grow slowly by helping just four or five dogs their first year, she said. Instead, they have so far helped find foster or adoptive homes for almost 50 dogs. They've raised about $15,000 through fundraisers and donations.

"It's spent on the dogs' care as soon as it comes in," Rubenstein said. "We manage to stay just a few dollars ahead of what we need."

Other nonprofits are born out of personal hardships.

When their 5-year-old daughter, Gabby, was diagnosed with an aggressive, malignant brain tumor in June 2011, John and Carolynn Vogel used a blog and a Facebook page to keep family and friends informed about her health.

"The next thing we knew, there were 30,000 people following the story," John Vogel said.

Gabby died five months later, and the Vogels soon became advocates for more research into pediatric cancers. The Vogels, of Ocean View, incorporated the Get Well Gabby Foundation in Delaware in February 2012 and received IRS nonprofit status in September. They wanted to be transparent with the money they raise and donate, he said.

"It's definitely an outlet (for grief), and there's a healing aspect to it," he said. "But more importantly to us is that we don't want anyone else to feel what it's like to lose a child."

Some Delaware nonprofits are affiliated with national organizations.

John Sykes, of Lewes, said he and his wife are concerned about the effects of climate change in Delaware and around the world, so they formed Delaware Interfaith Power and Light, which approaches the topic from a spiritual perspective. It's one of about 40 affiliates of the national Interfaith Power and Light, based in San Francisco.

The Delaware group works with a dozen churches and a religious schools to promote energy efficiency and conservation, he said.

"We wanted to do something more about it than writing letters to the editor or talking to legislators," Sykes said. "To raise money, you need the 501(c)3 status."

The (Wilmington, Del.) News Journal

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