Mission Neighborhood Health Center serves more than 12,000 low-income patients at its three clinics.


For Christoph Sandoval, finding holiday gifts was especially difficult this year. Not gifts for his family, but for the dozens of children who showed up at Mission Neighborhood Health Center’s Christmas party, an annual food and toy giveaway attended by some of San Francisco’s neediest families.

Sandoval, the organization’s director of philanthropy, made cold calls, wrote emails, and sent faxes and letters—all trying to secure the necessary donations.

Mission Neighborhood Health Center serves more than 12,000 low-income patients at its three clinics.

“We had to pull things out of a hat,” he said recently, explaining how he spent three times as long fundraising for the event this year than in years past. AT&T and the U.S. Marine’s Toys for Tots Foundation eventually offered to help.

But for Sandoval, it was a portent of hard times ahead.

November and December are typically important fundraising months for nonprofits, as individuals open their pocketbooks for the holidays and consider the tax benefit of donating to charity. But economic woes this fall dampened expectations at nonprofits throughout the Bay Area, according to a survey conducted by United Way.

With the holidays over, the view last week from several community organizations providing education, health, legal and housing services to thousands of Mission District residents reiterated those results. All the groups pointed to looming financial challenges in 2009 as grants from charitable foundations dry up and city and state governments cut funds as well. Most have started to look for ways to reduce costs.

For Mario Paz, executive director of Good Samaritan Family Resource Center, the current economic climate has the makings for a “perfect storm.”

Roughly 75 percent of his budget is funded by foundation grants and government contracts. A few foundations have already sent letters saying they may have to reduce funding going forward. Many of their endowments took a big hit as the stock market plummeted this fall, he explained.

The view from the public sector isn’t rosy either. San Francisco has a projected $125 million budget shortfall for the remainder of fiscal year 2009, which ends on June 30. In December, Mayor Gavin Newsom announced $118 million in mid-year program cuts that would affect contracts with some nonprofits providing health and human services to homeless people and the mentally ill.

Mason Jeffrys, director of administration and development at Dolores Street Community Services, which runs two homeless shelters, said roughly 80 percent of his organization’s budget comes from city, state and federal contracts.

“Unfortunately we still don’t know what’s happening with a lot of those,” he said.

Some nonprofits have already taken a hit. The Central American Resource Center, a nonprofit that aids immigrants, had the contract for its Family Wellness and Empowerment program reduced by 15 percent at the beginning of the fiscal year, according to Joel Streicker, the organization’s development director.

Other organizations have had to lobby to keep their funding intact. In November, Mission Neighborhood Health Center fought a proposal to cut in half a $300,000 grant it receives from San Francisco’s Medical Access Program. The funding helps the nonprofit defray costs for primary care at three clinics.

Sandoval, the director of philanthropy, said it was still unclear whether those funds would be reduced.

In addition to the city’s economic woes, the state is facing an estimated $41.5 billion deficit for the remainder of this fiscal year and the following year.

Jean Ross, executive director of the California Budget Project, an independent nonprofit that analyzes state fiscal policy, said it was tough to estimate how extensive the cuts might be to San Francisco nonprofits. She said health and human services, education and the arts have been cut drastically in the past.

“We really are in uncharted territory,” she said. “The gap is so big … History may not be the best predictor of the future.”

Last week, Gov. Schwarzenegger proposed a 10 percent cut to every state agency. These agencies often fund departments at the county level, which in turn contract with nonprofits like Dolores Street Community Services and the Mission Neighborhood Health Center.

Rather than wait for the worst, Mario Paz at Good Samaritan has tried to find ways to cut back on operating expenses. Switching janitorial services cut costs by 30 percent, saving $100 a month. And installing compact fluorescent light bulbs and spotting other ways to conserve energy reduced the Pacific Gas & Electric bill by 25 percent.

So far he’s retained all his staff, though a few people have taken a voluntary reduction in hours. No services have been curtailed.

“We worked really hard this year to cut where we can … preparing for the worst,” he said.

Paz also reduced his year-end fundraising projections and convinced his board to make more personalized appeals to donors. As of late December, these efforts seemed to have paid off. Fundraising was lower than he projected in early 2008, but still on par with the previous year.

Mission Graduates was less fortunate. Jeff Feinman, the organization’s executive director, estimated that individual donations were down 20-25 percent for the year. These make up only a small portion of his budget but are a bellwether for larger fundraising initiatives. Like Paz, some foundations had already written to tell him he should expect less in 2009.

Feinman wanted to add a high school tutoring program this year. Currently his organization tutors 270 elementary and middle school students. At the high school level, the organization offers guidance counseling to about 60 students.

Mission Graduates helps neighborhood youth prepare for college through both of these programs, as well as outdoor leadership classes and a sex education and teen pregnancy prevention program.

Feinman is also delaying hiring a part-time development director and deferring a move to a larger office space. “A lot of those things we’re going to have to put the brakes on,” he said.

St. Peter’s Housing Committee met its modest fundraising goals for the year but was cutting back on staff hours, according to Mariana Vitturo, one of the organization’s co-directors. When a full-time caseworker left, they decided to replace the person with a part-time employee who works 20 hours a week, she said.

Melba Maldonado, executive director at La Raza Community Resource Center, which helps Latino immigrants, struck a more combative tone. Fearing a divisive budget fight this spring, she said she’d advocate in Sacramento and at city hall for her government-funded programs. If that doesn’t work, she added, “We’ll be selling tamales, just to make sure our doors stay open.”

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Noah Buhayar is print and multimedia student at the UC Berkeley Graduate School of Journalism. He reports primarily on business topics. His work has appeared in the Financial Times, The Wall Street Journal, CBS’s business site BNET.com and MarketWatch. Before coming to the Bay Area, he taught a semester of high school Spanish in Hawaii, spent a year in southern Chile on a Fulbright grant, and interned with the NewsHour with Jim Lehrer’s online division.

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