Some charities see good news and bad in the economyby Tom Robertson, Minnesota Public Radio
The bad economy is putting pressure on non-profit charities in the state. There's higher demand for services, but fewer funding dollars to go around. Some say a prolonged recession could put some charities out of business. For organizations like Goodwill Industries, which sell donated items in second-hand stores, these tough economic times bring both good news and bad news.
Bemidji, Minn. — Shopping at a Goodwill store is like discovering a really great rummage sale. There are racks and racks of second-hand clothing and shoes, books, electronics, furniture, knick-knacks -- you name it. And all at bargain prices. This store in Bemidji is bustling with shoppers.
At the checkout counter, rural Bemidji resident Dorothy Hughes is buying a few odds and ends, including some stuffed animals for her grandkids. Hughes says she comes here looking for bargains.
"I even did this before the economy got bad," said Hughes. "That's what you do, you save money. I even go to other second-hand stores, too, and I buy sheets and everything, you know. I buy my towels in here and stuff, too."
Goodwill stores across the state are seeing an increase in shoppers -- and revenue. That means more money for the organization's programs, which focus on job training for the disadvantaged. The sales boom is driven by the dismal economy.
Bemidji store manager Melanie Mathisen says if there's a stigma associated with shopping at second-hand stores, that stigma is fading as times get tough.
"We're seeing a lot of new faces in the store," said Mathisen. "There's a lot more people that are coming in that didn't come in before, and they're looking for those great deals. They're looking for ways to hold onto their pocketbooks a little bit tighter."
Okay, so that's the good news. The bad news for Goodwill Industries is that donations to its stores are way down.
The shelves are mostly full, for now. But Mathisen says with more shoppers coming in, it could mean trouble down the road if there's a prolonged recession.
"If the donations really slow down too far, then that does hurt," she said. "Obviously, we need donations to run the stores, all of our stores, and without them we cannot supply our customers with what they're looking for."
The story is the same across town at Bemidji's Restore, where manager Steve Strasser is testing a recently donated clothes dryer.
The Restore is one of six in the state operated by Habitat For Humanity. It sells used appliances and furniture, and all sorts of construction supplies. There are rows and rows of doors and windows, cases of shingles, kitchen and bathroom sinks, and stacks of lumber.
October was one of the Restore's best sales months ever. Used appliances are the hottest sellers.
Steve Strasser says these days people are reluctant to buy new ones, so they're looking for bargains.
But donations are slipping. They're way down from local building supply stores, which typically pass on their surplus material. Strasser says with an ongoing construction slump, he has to work harder to keep shelves stocked. He worries things will get worse.
"Everything will impact us," Strasser said. "It may bring us to the point of donations starting to dry up from local citizens. I think that goes for any place that is basically run on a donation basis. There are those who give and there are those who need, and people kind of want to hang onto what they've got."
Charity organizations are in a critical period right now. About 40 percent of all giving occurs between Thanksgiving and Christmas.
Charities Review Council of Minnesota director Rich Cowles says it's too early to tell how charities faired through the economic turmoil of 2008.
"There aren't hard numbers yet, but it appears that giving is just generally down," Cowles said. "My thought about this is just that people are retrenching and kind of waiting, because we don't really know where the bottom is, and so it's tough to be generous when you're not sure."
A recent study at Indiana University shows that giving typically declines in periods of recession. The study found one exception, though. Charities like food shelves and others that serve the most critical human needs actually see donations go up slightly during recessions.
- All Things Considered, 12/11/2008, 5:50 p.m.