Donations Dwindle As Groups 
See Growing Risk

01/27/03

MICHELLE COLE and JONATHAN BRINCKMAN

Even as they scramble to respond to what they call the Bush administration's assault on the environment, conservation groups in the Northwest and nationwide are cutting staff and programs because a key source of their revenue has taken a hit.

Charitable foundations -- fueled by soaring high-tech profits and rapidly appreciating stock investments -- spent the latter part of the 1990s doling out millions to conservation organizations, more than doubling their level of support. But in the past two years, those foundations have seen the assets on which they base their giving plummet along with the stock market. They've scaled back on all giving, conservation causes included.

The nation's top 10 environmental grant-makers, led by the David and Lucile Packard Foundation, saw their assets drop by $12 billion from 1999 to 2001, from a high of $51 billion. A review by The Oregonian found their giving to conservation groups fell by $72.9 million from 2000 to 2001, the last year for which figures are available.

Save Our Wild Salmon, a Seattle-based conservation group, is among those feeling it. Cuts have reduced the staff from 18 full-time positions last year to 15.

There's still far more foundation money available to conservation organizations than ever before. Giving to such groups by the top 10 environmental grant-makers climbed 78 percent from 1997 to 2001. But some foundations have warned conservation groups to expect grants in 2003 to be 20 percent to 40 percent smaller than in 2002. A handful, including media mogul Ted Turner's foundation, are honoring past commitments but not awarding new grants this year.

As a result, large national organizations and scrappy local groups alike are forced to react to the downturn much like corporate America. Environment Inc., as the groups might be collectively called, has laid off employees, closed offices, cut salaries, capped spending and, overall, lowered its ambitions.

Small- and medium-sized groups are feeling the pinch the most. At Save Our Wild Salmon, executive director Pat Ford says he has a "contingency plan" to cut one more position by late spring.

"The corporate word is 'natural' attrition, but it's hurting," Ford said.

All of this is a departure from what conservation groups became accustomed to in the late 1990s. Those years were something like a Gatsby party. The money flowed like champagne.

The New York-based Foundation Center, which tracks grants from 1,000 of the top U.S. foundations, reports that grants for environment and wildlife preservation topped $987 million in 2000. That compares with $414.3 million in 1997.

"If you had a good idea and a good project, you could get it funded," said Sybil Ackerman, conservation director for the Audubon Society of Portland.

Not anymore. Conservation groups that let spending rise with the tide of foundation dollars now find they have to cut back.

The Alliance for the Wild Rockies, the Missoula, Mont.-based organization that forced the U.S. Fish and Wildlife Service to list Northwest bull trout under the Endangered Species Act, cut its 2003 budget to $150,000, down from $400,000 in 2002. The alliance laid off two of its three employees in Missoula and closed its Ketchum, Idaho, office.

"One of the people we laid off focused on ecosystem defense. He commented and appealed timber sales. So we probably won't be able to comment on as many timber sales," said Michael Garrity, the alliance's executive director.

For other groups, the party isn't exactly over. But it has moved from Gatsby's, and the champagne isn't as good.

American Rivers, with 50 employees and eight offices, will operate with a $5.3 million budget this year. That's more than double what the group spent in 1995. But it's about $200,000 less than it spent in 2002.

Heeding the warnings of its foundation funders, American Rivers laid off two employees and closed its office on the Mississippi River in Davenport, Iowa.

"These are times for austerity," said Charles McTier, president of the Robert W. Woodruff Foundation. "We're telling groups to be careful what they spend."

The Atlanta-based foundation -- which has 83 percent of its assets in Coca-Cola stock -- dropped in value from $3.7 billion to $2.4 billion from 1997 to 2001. Its grants to environment groups fell from $42 million in 1997 to $11.5 million in 2001.

Lack of diversification The usual guidance for nonprofits is to diversify their revenue base among foundation grants, membership dues, and corporate and individual contributions. But for many conservation groups, particularly smaller ones, that got out of whack in the late '90s.

Today, it's not uncommon for a conservation group to rely on foundations for 60 percent, 70 percent and even 80 percent of its total revenues.

Foundations "have people on their staff whose job it is to give away money. It's a system. So it's easy to milk the system. But sometimes you pay the price," said Andy Kerr, a longtime Oregon environmental activist and consultant to conservation groups.

In 2000, the top 10 environmental grant-making foundations gave $404 million to conservation groups. By 2001, their giving dropped 18 percent to $331.1 million. Last year's total is pending.

Earthjustice, a nonprofit environmental law firm, is one of the few conservation organizations that expects revenue from foundations to rise in 2003.

Based in Oakland, Calif., Earthjustice has filed suit against the federal government over everything from water distribution in the Klamath Basin to roadless areas in Alaska's Tongass National Forest.

Earthjustice estimates it will receive nearly $3.3 million in foundation grants in 2003, up from $1.5 million in 2000.

Bill Curtiss, vice president of programs, said he credits the Bush administration's move to weaken forest, clean air and clean water regulations for Earthjustice's continued financial support.

Shifting priorities Yet some tried-and-true environmental grant-makers have either stopped making awards or changed their priorities.

The W. Alton Jones Foundation, which in 2000 was the nation's 12th largest giver of environment grants, dissolved in September 2001 and distributed its assets of $400 million among three new charitable organizations to be headed by members of the Jones family.

Groups working to protect critical species habitat in the western Rockies took a particularly hard hit when the Turner Foundation announced it would honor its commitments in 2003 but not fund new requests. Turner, who funded his foundation with his personal fortune, saw the value of his AOL Time Warner shares fall by about 70 percent in two years.

"As soon as the stock market and economy rebounds, we really want to get back in the game," said Devon Finley, a program officer for the foundation.

Virginia-based Trout Unlimited, which received $25,000 from Turner in 2001, cut its salary budget by 20 percent this year and is not filling open positions. The decision was made even before the Turner announcement.

"We were projecting a weak economy," said Kenneth Mendez, Trout Unlimited's chief operating and financial officer.

Even with the cuts, Mendez said, "We're a lot better off now than when we were in 1995, and we're doing more now than we were doing in 1995. Our programs have grown."

Like most U.S. corporations, Environment Inc. has made a list of things it did in more prosperous times but won't be able to do this year: Oregon Trout, which cut its budget 12 percent this year, is not going to do as many snorkel surveys in which biologists count fish. "We're going to rely upon scientific data generated elsewhere," said Joe Whitworth, executive director. "That's fine. But you have more credibility if you've walked the ground, if you've been in the river." The Oregon Environmental Council will cut the number of "Business & the Environment" forums it sponsors across the state. It also has trimmed staff hours and given people unpaid leave. "Luckily, there have been a lot of babies born," executive director Jeff Allen said. Even the Sierra Club, with an annual budget this year exceeding $70 million, is feeling some financial uncertainty. "We're trying to hold the line," said Richard Dietrich, associate director for foundation and corporate relations.

Hard time for newer groups The rollbacks present a particular challenge for newer conservation groups.

"Older and well-known programs are competing for severely diminished resources, while new ideas and innovative strategies don't get a hearing," said Peter Lavigne, president of the Rivers Foundation of the Americas, a Portland-based foundation that finances watershed conservation and restoration.

A few smaller conservation groups may close up shop or merge with other organizations as a result of the current economic climate. But on the whole, Environment Inc. will survive.

It's just a matter of getting groups "past this era of extraordinary wealth and returning them to raising money as they ought to," said Denis Hayes, president of the Bullitt Foundation in Seattle.

That means the public can expect to receive more fund-raising appeals as conservation groups try to wean themselves away from foundation dollars.

"We're on a constant drive to diversify our income," said Ric Bailey, executive director for the Hells Canyon Preservation Council.

Based in La Grande, the council works to protect wildlands and wildlife in Northeast Oregon and Western Idaho. This year, the council will operate on a budget of $229,000, down from $305,000 last year. The staff has agreed to take salary cuts to help make up the difference.

"We're going to be creative," Bailey said. "We're not going to go away. The dedication of our people to the cause is what sees us through these tough times."

Michelle Cole: 503-294-5143; michellecole@news.oregonian.com Jonathan Brinckman: 503-221-8190; jbrinckman@news.oregonian.com