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Nonprofit news roundup for Jan. 19, 2009

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Ohio and Pennsylvania foundations seek Obama’s help

Five charitable foundations from Ohio and Pennsylvania have issued a dismal report on the economy to the Obama administration to make the case for including nonprofits in the economic-stimulus package, The Columbus Dispatch reported Jan. 16 (see needs story). Social-services programs in the two states have lost over $3 billion as a result of the economic crisis, says data compiled by foundations in Columbus, Cleveland, Toledo, Philadelphia and Pittsburgh. Requests for foreclosure-prevention services have jumped 50 percent in the five communities, while requests for help with utilities have surged by as much as 75 percent, the report says.

Interest-rate drop batters legal-aid services

The Federal Reserve’s steep reduction of its benchmark interest rate, a move meant to boost the national economy, has had unexpected and disastrous consequences for legal-aid agencies that help the poor with foreclosures, evictions and unemployment, The New York Times reported Jan. 18 (see rate story). The agencies got more than $200 million in 2007 from funds that are tied to the federal-funds rate, which was more than 5 percent at that time. Since the interest rate dropped to near zero last month, thousands of legal-aid agencies have had to slash staff and programs as needs for their services have skyrocketed by at least 30 percent.

Florida universities await much-needed matching gifts

Since last year’s decision to temporarily suspend matching-gifts programs, Florida has racked up $177 million in debt at its 11 public universities, The Palm Beach Post reported Jan. 18. The state already slashed $93.5 million from university operating budgets this month, and may cut an additional 14 percent from next year’s budgets. The University of Florida in Gainesville, which is trying to regroup after a nearly $104 million endowment loss during the first quarter of the 2009 fiscal year, is awaiting about $79 million in matching gifts from the state to support academic programs.

Washington couple monitored for improper use of charity funds

Though officials in several states are monitoring the finances of four Washington-state nonprofits, they have not made a move to keep the organizations from spending millions of dollars on salaries, transportation and telemarketing campaigns, The Des Moines Register reported Jan. 18. Despite raising more than $4 million in 2006, the nonprofits, run by Robert Friend Jr. and his wife, Shao Mei Wang, spent a total of just $15,800 that year on direct aid. Mitchell Gold, a former fundraiser for Friend and Wang, was sentenced to more than eight years behind bars for fraud in 2002.

In Brief:

* The endowment of the University of Illinois at Champaign has tumbled nearly 30 percent, or $400 million, since the summer, the Associated Press reported Jan. 17.

* New Jersey private schools, reeling from steep drops in their endowments, are scaling back on hiring and construction, The Times of Trenton reported Jan. 18.

* The evolution of corporate philanthropy from the 1800s to the present day is marked by many changes in how society reconciles profit-seeking with charitable giving, says an editorial in The Financial Times Jan. 17.

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