Twenty-five executive directors from a wide range of local LGBT nonprofits met recently in a conference room at a downtown San Francisco office building to vent.
Running any agency comes with its fair share of headaches under normal circumstances. But lately the stress of the job has intensified as the downturn in the economy has strained nonprofits' fundraising abilities and put at risk government funding at the state and local levels.
"I think everybody is going through a very difficult stretch, whether you are a service provider or advocacy organization or a cultural institution," said AIDS Emergency Fund Executive Director Mike Smith, who attended the June 18 powwow hosted by the LGBT-focused Horizons Foundation. "Knowing everyone is under the same strain, many of us felt it couldn't hurt to get a sense of where everyone else is and get support from the group."
More such meetings are being planned through Horizons in coming months. The foundation's executive director, Roger Doughty, said the fiscal situation facing nonprofits will only worsen.
"We are just beginning to see the fall off in government funding. We know it is coming but the numbers are deeply alarming," he said. "Those are going to have a fuller impact later this year and in 2010 going forward. Most of that has not yet hit."
Discussions among nonprofit leaders have been ongoing for some time now, said LGBT Community Center Executive Director Rebecca Rolfe. Even before the economy began taking its toll last fall, LGBT agencies had begun re-examining their budgets and fundraising due to last year's presidential election and the fight to defeat Proposition 8, the anti-same-sex marriage ballot measure, diverting money away from social service agencies.
The fiscal challenges have yet to stabilize, said Rolfe, who is already bracing to have to compete for donations against a Prop 8 repeal effort, expected to be on the November 2010 ballot.
"We are just working on finalizing next year's budget and I can tell you things are tight. We have downsized, we have economized, and we are looking at any way to reduce short-term expenses while protecting long-term services," said Rolfe. "It is a real challenge."
AIDS agency officials have also been meeting on their own for months to deal with not only a drop off in funding but mounting pressure from their donors and San Francisco officials to consider merging or collaborating in order to save money.
"There is a sense from donors there is a lot of extra overhead in the system but no sense we are duplicating services. None of us are getting 100 percent funding from the government, if we were it would make sense to merge," said Smith, who also serves as president of the HIV/AIDS Provider Network, consisting of 45 various service providers. "It is a bit of a minefield. Everybody wants to do what's best for their clients but has to do it in a way that makes financial sense."
City leaders have already notified agencies it funds to expect an overhaul of how contracts are awarded. Rather than hand out small monetary awards and numerous contracts, city departments plan to bundle them into larger amounts to fewer agencies. Those nonprofits given contracts can then farm out subcontracts to other agencies. In effect, the city is forcing agencies to work together or consider merging.
"The AIDS office brought together AIDS agency executive directors to talk about collaboration recently. They are encouraging people to do it," said Project Open Hand Executive Director Tom Nolan.
The grocery center and meal provider already helps house several other AIDS agencies in its Polk Street building, and since last year, it joined a cooperative with other food pantry providers to save money by buying items in bulk. Due to the economic crisis, Nolan said he expects to see more and more agencies looking to combine their resources as a cost-saving measure.
"The problem is for all of us just keeping afloat and keeping up with the day-to-day stuff is hard enough. This has been on the back burner but increasingly is moving to the front burner. I think we will see some more movement this calendar year," he said.
The Stop AIDS Project and the San Francisco AIDS Foundation began discussions late last fall on a possible merger, similar to how the foundation absorbed Magnet, the gay men's health center, and the Stonewall Project, a harm reduction program geared to speed users, under its umbrella.
"We are always looking at ways of delivering our mission and accomplishing our goals better," said Barbara Kimport, the foundation's vice president for development. "We are just beginning to explore this piece now with Stop AIDS. These things deserve very, very careful attention."
Kyriell Noon, Stop AIDS executive director, said nothing formal has yet been presented to either agency's board.
"We are at the early stages of examining the feasibility and viability of an increased strategic partnership," said Noon. "In this environment of dwindling resources we have to examine if it would be better if we were serving the community better together than more apart. I think there are a range of collaboration options that are available."
Both agencies find themselves strained economically. The foundation has seen its charitable giving drop 20 percent over the last year and in December cut its budget and staffing levels. This year's AIDS LifeCycle saw fewer people riding, with donations down 4 percent.
For the fiscal year beginning July 1, SFAF has set a budget of $20 million, down from $25 million this past year. It could be further impacted depending on what the state and city do in coming weeks to balance their budgets.
"We are being prudent and are looking at lowering the budget in the next six months," said Kimport.
Stop AIDS is working on three contingency plans for its new budget beginning July 1, which will be determined by its state and city funding. Noon expects the cuts could range from $70,000 to $200,000 depending on the outcome of the budget negotiations and said staff furloughs are one possibility. Its total budget had been $2 million this past year, with half coming from government funds.
"We are trying to prepare," he said. "We are expecting it to go down and are planning for the cuts."
Other agencies are exploring renting office space together. AEF's lease expires in December, and Smith said he is in talks with two other small nonprofits about moving in together to not only save money in rent but also through office supplies and equipment.
"Rents are falling. I think we could find cheaper space right now," said Smith.
Prop 8 repeal raises money fears
As the community prepares for a Prop 8 repeal campaign sure to cost tens of millions of dollars, nonprofit leaders are expressing concern about the impact the looming battle will have on their ability to raise funds.
Last year's Prop 8 fight cost the LGBT community and its allies $40 million, largely spent along California's liberal coastal areas. The repeal fight is expected to cover the entire state, ensuring the next ballot battle will be far more costly to the community.
"I don't know of any LGBT organization in the state that's focused on direct services and advocacy outside of marriage that isn't worried about fundraising in light of another ballot initiative," said Masen Davis, executive director of the Transgender Law Center, which has received more than 1,200 requests for assistance this year.
Dana Van Gorder, executive director of Project Inform, and several other AIDS agency leaders had hoped to meet with Equality California's Geoff Kors this past Monday to discuss how to fund the next campaign, while at the same time, ensure local agencies serving the community do not see their fundraising efforts adversely impacted. But Kors was a no-show and the AIDS executives said they're confused on just who is leading the repeal effort.
"I think everybody in AIDS and social service agencies working in the community are supportive of moving forward with another initiative. There is concern about the community's capacity to fund that and social services that may be cut in the coming year or two years," said Van Gorder, who said it was unclear how much the initial Prop 8 campaign impacted donations to other LGBT groups. "On its face it would seem as though an initiative could result in fewer private donations to AIDS and other social services agencies. I don't think that means a same-sex marriage campaign shouldn't occur.
"I think collectively the civil rights groups and the queer health and welfare groups are going to need to come together in a way we haven't in the past to appeal to the community to reach deeper into their checkbooks than they have in recent years," added Van Gorder.
Backers of same-sex marriage have already increased their fundraising efforts this year, and it remains to be determined how much the repeal effort will cost.
"These are very serious questions. I am so worried about our community groups and the impact of budget cuts on our community. We need to rally the forces to do what we can to protect them," said Shannon Minter, the National Center for Lesbian Rights' legal director. "The only thing I heard on how much money our side would need to spend is it depends on a significant part of how much the other side is spending. I know it is very daunting to run a comprehensive field operation in a state like California, which is bigger than many countries."
Many nonprofit directors are urging the community wait until 2012 to mount the Prop 8 repeal fight. They argue next year does not present enough time to build up support to ensure that the anti-gay measure will be overturned.
"Many of us are concerned if we were to mount a campaign immediately of the need to raise money from the LGBT community and how that would impact many organizations that serve the community. Many of us have experienced a decrease in revenue at the same time we are seeing greatly increased demand for services," said Rolfe. "I think the challenge is we all see marriage equality as critically important but we also see the social and safety net services that are provided as also critically important.
"The question for us is how to maintain both for the steady progress toward marriage equality and ensure that the critical safety net services that really support the survival and needs for the LGBT community remain in place," added Rolfe. "We need to be really honest and realistic about how much we are going to have to raise this time."
Due to the economy, a wide array of agencies serving the LGBT community is scrambling to raise enough money to meet an ever-growing demand for services.
"In fact, our client requests have increased by 30 percent over the past 12 months compared to previous years," said Davis, who said the "marked increase" was because of the economy.
At the same time Davis said the agency, whose budget for 2009 is about $540,000, lost "a number of individual donors" as people have become unemployed or switched their focus to marriage equality. A few donors have contacted the center since the May 26 state Supreme Court decision upholding Prop 8 to notify the agency that they intend to focus all their contributions into the marriage equality fight until Prop 8 is repealed.
"The Transgender Law Center has been part of the marriage equality battle and has been educating and mobilizing transgender people to get involved in the marriage equality struggle, but we're really mindful that many people in our community face basic bread and butter needs, like housing employment and health care," said Davis. "Ideally, we would have one-third of our budget coming from individual donors. Right now, we are more dependent on foundations than we would like to be."
He said the center anticipates costs will be more than revenues. Asked about cuts, he said, "We are holding steady," but "when we lose individual donors we typically have less general operating support or flexible funding to meet the responsive needs in the community."
Tenderloin Health, which operates in a low-income, crime-plagued neighborhood where many residents are people living with HIV/AIDS or are struggling with drug addictions, will close down its popular community drop-in resource center Tuesday, June 30.
The agency's budget this fiscal year is about $8 million, but the budget is dropping to $7 million next year because of a contract with San Francisco's Human Services Agency being de-funded. The drop-in center, which served more than 12,000 unduplicated clients every year, has offered everything from bathroom access to help with shelter reservations.
Colm Hegarty, Tenderloin Health's executive director, said, "We're dealing with an enormous financial crisis in the city and state. We're going to rely more and more on people to donate money and time."
However, said Hegarty, "I have had individual donors see gay marriage as the issue strategically that they need to have addressed."
The rest of the agency will remain open, and Tenderloin Health will continue providing help through its HIV services and housing programs. Those programs, which serve 1,300 unduplicated clients a year, include primary medical and urgent care, HIV testing and counseling, supportive housing, and workforce development.
Hegarty said the majority of the agency's clients are LGBT and "Our clients have relationships just like everybody else."
"It's absolutely essential at this time that we have as much support as possible from our community," said Hegarty, although he added, "I don't think we can pit marriage equality against gay people's issues around HIV and the epidemic."
In May, Maritza Penagos, HIV services director at Clinica Esperanza at the Mission Neighborhood Health Center, told the Bay Area Reporter in an e-mail that, "Despite our having provided over 1,300 tests last year alone, and identified over 46 HIV+ individuals over the last four years, we are being targeted for elimination."
But last week, Penagos said 50 percent of their funding for counseling and testing has been restored, and at first it looked like the state budget crisis was going to impact them, but it doesn't look like the effect will be as "dire" as they thought.
The health center's budget this fiscal year for HIV care, including counseling and testing, is $1.6 million. It cut $75,000 from the budget for next year, and already cut one staff position and reduced the number of testing sites. Last year, they tested about 1,200 unique clients.
Despite the reprieve from seeing its governmental funding cut further, Penagos said that going forward the center would likely have to depend on fundraising "more and more." This past year, the center raised about $40,000 through individuals and foundations. The looming rematch over Prop 8 has Penagos "somewhat" worried.
"I think overall we've been impacted by the larger economy ... not specifically to Prop 8 dollars and the fundraising that's gone to Prop 8," she said. "I think for people of color community-based agencies, I think we do want to see more of a linkage of the Prop 8 fight within the larger context of what's happening" in terms of getting money for basic medical and HIV services.
The center has many gay clients, Penagos said, but the marriage issue is somewhat "divorced" from their everyday experience. She said fighting Prop 8 is "definitely a wonderful and righteous goal," but there are people with more pressing questions like "Is my rental subsidy going to go up?" or "Am I going to lose basic dental services?"
Bobbi Lopez is with the Central City SRO Collaborative, which works with tenants of single-room occupancy hotels. The collaborative is not funded by the private sector, but Lopez still expressed concern about the amount of attention given to Prop 8.
"Working in ground zero, the Tenderloin, it is disconcerting to see how many members of our community live in poverty and struggle with mental health, drug addiction, and gaining proper care for long-term illness including HIV," wrote Lopez in an e-mail. "I see young queers in the Tenderloin struggling with meth and heroin addiction. I see our seniors living in substandard SROs. I see our trans brothers and sisters unable to find employment and resorting to survival sex work. The LGBT community has been in crisis way before Prop 8."
In a phone interview Lopez, who's rallied against Prop 8 and is also a vice president of the Harvey Milk LGBT Democratic Club, said, "I think Prop 8 was an attack on the whole LGBT community regardless of whether you believe in marriage or not, but I think we cannot let other things fall to the wayside."
"We have limited political capital. How we use that capital is really important," she added.