Credit Crunch Leaves Charities in Cash Crisis

The God's Love We Deliver sought to generated much needed money for the beleaguered charity.

The God's Love We Deliver sought to generated much needed money for the beleaguered charity.

Gregory M. White

November 24, 2008

The leaves crunched beneath the runners’ feet as the first chilly winds of winter blew past the starting line. They had come from across New York City to queue for the 15th annual God’s Love We Deliver charity run on that November Sunday morning. They were not a moment too soon for those most in need.

As Wall Street’s wintertime chestnuts continue to roast under the flames of an ever-declining economy, New York City’s local charities are being burdened with a financial failure that will make their ability to fulfill their goals that much more difficult. The Dow Jones Industrial Average’s fall from heights of over 14,000 just over a year ago to lows around 7,500 points this month has symbolized an economic collapse compared to the Great Depression. But the struggle for charities to meet the needs of many Americans left impoverished by the crisis may soon become more an emblem of the times.

God’s Love We Deliver seeks to provide meals for people homebound by illness. Her 17 years as a volunteer have left Roz Gilbert adamant about the importance of this organization. But this year she has seen a cash drought.

“I couldn’t believe how many checks I didn’t get this year,” she said.

Gilbert said that God’s Love We Deliver provides more than 1,600 meals per day and that she was concerned the loss of funds could impact the organization’s ability to meet the needs of the community.

The race, with its goal of raising money for the year’s expenditures, has not been immune. “Even my group, I’m not going to get to $10,000 this year,” she said about her own running team.

The falls of Bear Stearns in March and Lehman Brothers in September have made the finances of New York’s charities particularly precarious. Both organizations donated heavily to charities, often doubling workers’ gifts as well as providing generous corporate grants.

God’s Love We Deliver received $1,865,799 in charity donations from corporations and foundations last year. This amounted to 19.7 percent of donations and nearly the same amount of yearly costs, much of which may be at risk from the financial crisis

There were no financial services corporations on the list of 2008 sponsors for God’s Love’s charity run, except for Bloomberg, the information services firm. Other sponsors included retail brands Nike and MAC Cosmetics.

Institutions like Meals on Wheels are also suffering through the crisis. Beth Shapiro, director of marketing and communications, described the decrease in funding as sizable. It includes a $500,000 loss in donations from the fall of Bear Stearns alone.

“Who anticipated the fall of Bear Stearns? For us to make up $500,000 it’s not going to happen this year,” she said.

Meals on Wheels lost both the Lehman Brothers and AIG corporate matching programs in just one week, Shapiro said, part of a $225,000 loss just from firms in the financial sector. With an annual budget of $20 million, this amounts to a sizable loss. The Bear Stearns loss alone equals 90,000 fewer meals for clients, Shapiro said. She hopes that holiday fundraising can overcome this deficit.

“If we don’t meet our demands now we will be in jeopardy, meals will be in jeopardy,” she said.

While Meals on Wheels is restructuring to streamline and make services more efficient, Shapiro is still fearful.

“We don’t want to not deliver meals to people who can’t get out,” she said.

The global economic collapse has brought down some of Wall Street’s largest banks, and the deep devaluations of stocks, bonds and other investments affects charities as well. Lehman Brothers alone donated $30.8 million to charities in fiscal year 2007, a number that will not be made up this year. But even for the survivors, their ability to donate has been decreased by plummeting stock values and advancing debt on the weakness of their balance sheets.

Some have even cancelled Christmas parties, including UBS, the Swiss investment bank caught in a tax-evasion scandal. Last year UBS donated $38.1 million to charity to groups such as the Children’s Aid Society of New York. UBS representatives were unable to comment on how a decline in profits would impact charitable giving or the employee-matching program.

Citigroup donated $145 million to charities last year globally. Citi refused to comment on donation plans for the year, though the recent government bailout for the group may suggest difficulties in meeting all charitable commitments.

Firms like Freddie Mae and Fannie Mac, whose donations to charities were sizable, were unable to say what changes they are making as a result of being under conservatorship.  Spokesmen for both said all programs were under review.

Charities that cater to less than immediate needs are also being affected by the crisis. The Henry Street Settlement, which supports cultural works and community development on the Lower East Side, has also seen the impact of the financial collapse. Susan LaRosa, director of marketing and communications, said that the now-bankrupt Lehman Brothers was the underwriter for the group’s annual gala art show, its largest fundraiser of the year. According to Lehman Brothers records, this underwriting amounted to $175,000 in 2007.

“We are not going to makes as much money from this show,” she said. “We’re not going to make that $1.4 million.”

LaRosa was also concerned about individual donations.

“These individual funders don’t have as much to give,” because they have lost their jobs or their wealth, she said.

While a loss in funding was evident, LaRosa didn’t anticipate any funding cutbacks.

“We are going to become a much more efficient machine,” she said.

The Food Bank of New York is also under threat from the encroaching financial crush. Brian Pham, while working a table at a university event intending to encourage students to volunteer, seemed less than hopeful about his charity’s current economic position.

“We’ve seen drops in some of our corporate donations,” he said. “It’s a hard time.”

The Food Bank receives the majority of its donations in  food donated by individuals and firms. Patrick Mooney, director of philanthropy, said the decrease in food donations has been alarming, with a loss of 10 million pounds this year.

“With financial firms we’ve definitely seen a decrease,” including a loss of a $10,000 donation for Lehman Brothers alone, he said. HSBC and Washington Mutual, which had its profitable divisions absorbed by JPMorgan Chase in September, have also made cutbacks in contributions.

Mooney said financial firms aren’t the only ony lost source. He said  Kraft and Nabisco, which previously donated large amounts of food, are now selling it in foreign markets because of  the global food shortage.

Mooney described a dire situation. He said that demand has increased from 1 million people in 2004 to 1.3 million in 2007. This rise in demand has already resulted in food shortages, where shelves are now bare in Food Bank warehouses. He said cutbacks are planned in the delivery program and less food is being provided. Even so, he said, “We’re solvent.”

Charities that otherwise may seem independent of the current financial crisis are being affected indirectly. Father Neil Connolly of St. Mary’s Church on the Lower East Side has seen demand for his church’s charity work start to rise as the economic crisis begins to affect more low-income workers.

Father Connolly said the city’s efforts to cut spending froma lack of taxable income would impact his church,  harming “the homeless and hungry.”

“Will we have a shelter, will we have a pantry? A lot of that depends on the city,” he said.

St. Mary’s has several programs that require funding from both the City of New York and the Catholic Archdiocese. This includes the shelter and pantry, but also counseling and support services. Those programs are largely funded by the Archdiocese, but also rely on community and private donations from firms. Father Connolly was concerned about the long-term health of those donations.

“We haven’t seen a big decline yet, but I think we’ll see one,” he said.

Father Connolly described the impact of the crisis on New York’s poorest as being exacerbated by the housing bubble.

“I think the real estate industry has become untethered,” he said, describing rising housing costs in the Lower East Side and other low-income communities.

St. Mary’s still plans to go through with its annual Thanksgiving turkey giveaway and its Christmas Day festivities that include a meal for the homeless and lonely. But Father Connolly has little faith in what’s to come next.“After this, who knows,” he said.

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St. Mary’s Offers Special Services to LES Residents

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Asthma Free LES Goal for New Initiative

by Gregory M. White

Winter upon its city streets, the Lower East Side’s air breathes with a crispness of cold encouraging its citizens to scarf wearing. But as children huddle and hurry to school something much more sinister than sub-freezing temperatures or icicle crystals is lurking in their lungs.

Asthma, the upper-respiratory ailment, is being brought to the Lower East Side’s attention. The Asthma Free School Zone initiative, which has been active in New York City since 2002, is beginning to take root in the schools of the LES. The goals of the organization are broad, but they are seeking to change the city’s views on air cleanliness. Lori Bukiewicz, of Asthma Free School Zone, said their plans for the Lower East Side are simple.

“We want to find out what people are breathing on the streets,” she said.

The initiative plans to do this by installing censors that test air quality in area schools and public housing. The censors will be deployed 4 weeks at a time every season to detect the polluting chemicals PM 2.5, black carbon, and ozone that cause and increase the risk of asthma.

The program is being instituted in PS 2, 137, and 142 on the Lower East Side. It is already functioning in 210 schools throughout Manhattan, the Bronx, and Brooklyn. Asthma Free School Zone focuses on elementary programs because of the unique threat of pollution in early age onset of the chronic condition. Bukiewicz felt the Lower East Side had a very real need for the program’s attention.

“There are a lot of schools there and a lot of people living in public housing,” she said.

The area is also full of pollutants, according to Bukiewicz. This is due largely to traffic in the area, as well as power plants that produce smoke further polluting the neighborhood. Bukiewicz hopes the initiative can help to reduce these emissions and that results of testing could lead to changes.

“Maybe it means tighter regulation on power plants…certainly traffic is a concern,” she said.

Bukiewicz said that their work detecting pollutants could be, “just the tip of the iceberg.”

The seriousness of asthma is something doctors are seeing in their daily work. Dr. Teresa Smith-Ball has found that the ailment is often a collection of symptoms as much as a chronic disease in need of diagnosis. In her 20 years of family practice, Dr. Smith-Ball has found exercised induced asthma her most common form of the condition. She cites the prescription of inhalers as a high sign of people exhibiting a form of the condition.

Of all her patients, “a full fifty percent, at some point, I’ve given inhalers to,” she said.

Asthma affects about 20 million Americans, according to the American Academy of Allergy Asthma & Immunology. Asthma comes in two key forms, non-allergic and allergic. The pollutants found in car exhaust and poorly ventilated buildings often trigger allergic asthma. The Asthma Free School Zone initiative seeks to find these sources of allergic asthma and construct ways to influence communities to change policies to confront them.

Since its initiation, Asthma Free School Zone has garnered several awards including the US EPA Children’s Environmental Health Excellence Award in 2005.

Idling is also an important aspect of the campaign. Cars often wait while still running outside schools across the city, and the Asthma Free School Zone would like to encourage parents to stop the habit to cut back on air pollution. The organization holds an Idle-Free NYC day yearly, and will be doing so in May of 2009.

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Eric Eagan’s Article on Real Estate Featured on Curbed

Well done Eric:

Curbed

Curbed

http://curbed.com/archives/2008/10/30/neighborhood_watch_renting_on_the_les_in_2008.php

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Healthcare Crisis Cuts Cross Party Lines for Small Businesses

By Jeremy Herb
and Gregory M. White

Slideshow by Jeremy Herb

With the presidential campaign in its final days, small business owners and workers hit by the financial crisis are worrying about the cost of health care.

For Lower East Side bartender Malati Malay, a lack of health care coverage meant $2,000 in bills after two emergency room visits this year. Malay’s friends have suggested she give a fake name when visiting the hospital to avoid charges, she said.

“I need to get it, but I don’t know the best one to get, or what I can afford,” said Malay, an Australian with American citizenship. “I don’t understand how this country is meant to be the leader — you can’t even see a doctor.”

For New Yorkers who work for or own small businesses, presidential candidates John McCain and Barack Obama offer different directions on health care reform. Sen. Obama says he will cut taxes for small businesses to encourage them to pursue health care coverage for their workers, while Sen. McCain says he will provide every American with a $5,000  health insurance tax credit so individuals can choose their plans, according to campaign Web sites.

The Tax Policy Institute, a division of the Brookings Institution, said Obama’s plan would reduce the uninsured by 18 million by 2009, costing taxpayers $1.6 trillion over 10 years. The same review shows McCain’s plan reducing the uninsured by 1 million by 2009 at a cost of $1.3 trillion over 10 years.  According to U.S. Census Department figures nearly 47 million people are uninsured.

David Trueman, a lecturer in law at Columbia University,  and who practices law in Manhattan, said Obama’s plan has been mischaracterized in the campaign.

“It is not a nationalized health care. It is not a government health care,” he said. “Obama wants to have a pay or play mechanism for companies.”  (Under such a system companies would  pay for employees’  health insurance or pay taxes to the  government to support their worker’s health care.)

The Obama plan will also create a National Health Insurance Exchange to help individuals pursue coverage at reduced costs.

Trueman, also a psychologist, said McCain’s plan is much more radical, because the reduced burden on business would not have a positive impact on workers.

“It would work to disincentive businesses from providing health care benefits,” he said. “If individuals are simply going to apply for coverage…and there is no pooling of risks, I don’t see how this is going to reduce costs.”

Chris Remy, the co-owner of Cobble Hill gourmet cheese shop Stinky Bklyn, provides health insurance for his four employees, even though it cuts into profits.

“I do like Obama’s credit for small businesses that do health insurances,” said Remy, an Obama supporter. “In the long run that could encourage other small businesses to get in on the whole thing.”

For many small business owners, the weight of health care costs plays a primary role in voting decisions. Eighty percent of small business owners feel the issue is important to them, and 31 percent say it is the most important, according to the National Federation of Independent Business.

Rena Anastasi, owner of the Lower East Side’s Arena Salon, said she bought insurance for herself six years ago after living in this country since 1987.

“Since I got the shop six years ago, I realized I had to look into it,” she said.

Anastasi, who has an Obama sign in her shop’s window, felt it was impossible under any plan for her business to be able to afford insurance for its workers.

“We just don’t make the money to be able to,” she said, adding that the salon industry typically doesn’t provide health insurance. “I don’t feel it’s my job.”

Trueman feels a key to the Obama plan is how the Congress defines a small business. If small businesses are defined as two workers or more, it may put too heavy a financial weight on the tiniest operations. Trueman, however, doubts this will be the case.

“I think the plan will be responsive to the needs of small business,” he said.

Peter Morgano, who works at Boerum Hill Food Company, is currently insured under the state’s child Medicaid plan with his 2-year-old daughter. But he’s worried that insurance will soon expire, and  Morgano and his wife then plan to pay for their child’s insurance but go uninsured themselves.

Morgano, originally a Hillary Clinton supporter, who now a supports  Obama, doesn’t receive insurance from the Boerum Hill café and can’t afford a family plan.

“John McCain talks about $5,000. When family group coverage is $1,100 to $1,200 a month, $5,000 doesn’t get you very far,” he said. “Having your employer provide insurance is much more favorable to us people that work a day job. I work 50 hours a week and have no insurance,” he said.

Trueman said the health insurance burden will be difficult on small businesses in the current economic climate. But McCain’s plan could lead to increased demand and increased prices for consumers, Trueman said.

“McCain’s plan would look to do away with the employee-based system,” he said.

Malay, who hasn’t figured out how to pay her $2,000 bill, said business should help their employees.

“I don’t think they should have to pay all of it,” said the Lower East Side bartender, “but a least a little bit.”

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Rental Rates Down as Demand Crippled by Economic Crisis

by Eric Eagan

Oct. 29, 2008

The apartment is tiny.  None of its three bedrooms holds a bed bigger than a twin.  But it’s renovated, clean, and it’s in the middle of the fast-moving Lower East Side – the perfect place for three newly-minted Yale graduates to make their first mark on the city. Apartment hunters Andrew Cedotal, Allison Guy and Danielle La Rocco are on the fence, however.  For almost $3,300 a month, they expect more space.

“It’s a great apartment, but it’s a little smaller than we’re looking for,” La Rocco says to the agent showing the place.

What happens next is something that would have been unheard of even a year ago, but that real estate experts say is becoming more common: the agent offers to broker a better deal if the three will take the apartment today.  Within minutes, the trio has reduced their rent by a few hundred dollars a month, and La Rocco is dispatched to get a money order while the other two fill out applications.  The deal is done.

Do episodes like this mean Manhattan’s notoriously bullish rental market is softening?  Daniel Baum, a broker who runs the Real Estate Group, an industry organization that puts out an analysis of Manhattan rental prices each month, says yes.

“This past year, 2008, is the first year we’ve seen rental prices come down from the year prior,” he said.  “There’s a lot more inventory on the market now.”

According to the group’s latest report, the average rent for a non-doorman, two-bedroom apartment in Manhattan (the report does not look at three-bedrooms) decreased 3.82 percent from 2007, from $4,151 to $3,992.  Last week, the brokerage Citi Habitats reported that Manhattan rents from July to September were down over rents from the same period a year ago, for every category except one-bedrooms.

The reason for the slight drop in rents, Baum believes, is the recent economic downturn and the resulting layoffs. City unemployment rose 12.2 percent from August 2007 to August 2008, according to the Bureau of Labor Statistics.  More recently, with the collapse of the financial sector, wealthy Wall streeters are leaving their apartments, and landlords are finding it hard to replace them without lowering their rents or offering deals, like one month free.  For the first time in a long time – at least since 2001, Baum said, when 9/11 caused a brief dip in home and rental prices – renters are learning what it’s like to be wooed.

A perusal of Craigslist listings shows the modest incentives landlords are offering potential renters.  At the high end, there’s an “ULTRA LUX” studio in Midtown for $3,550 a month, but you “DON’T PAY RENT UNTIL JANUARY!” if you sign today.  A two-bedroom on the Upper East Side is going for $2,400 a month, but you get two months free, and, as with the other listing, this one is advertised as no-fee.

No-fee listings are more common on Craigslist than they were even a year ago.  Landlords are paying fees to lure renters who would otherwise be scared off by the expense, Baum said.  Broker’s fees are typically 10 or 15 percent of a year’s rent.  Cedotal, Guy and La Rocco did not pay a fee for their three-bedroom in the Lower East Side, likely saving thousands of dollars.

Of course, even with the freebies, not everyone should expect a bargain in a popular area like the Lower East Side.  The softening trend is affecting neighborhoods to varying degrees.  Non-doorman two-bedrooms in the Lower East Side averaged $3,588 a month in September, actually a slight increase over the year before.

“Rents are still a good deal higher than they were a few years ago,” said Baum, so it’s best to be flexible.  The Upper East Side near First and York avenues, is a good place to look for deals, he said.  A non-doorman, two-bedroom that rented in that neighborhood  for $3,496 a year ago would go for $3,309 today.

As for where these rents will go, the forecast is not certain.  Baum believes a glut of empty apartments will send prices lower, and keep them there.

“It doesn’t appear that there’s enough demand to push rental prices up to where they were,” he said.

So, at least for now, renters are in the catbird seat, and landlords are sweating.

“They’re certainly concerned that they’re not getting the rents they used to,” Baum said.

That’s music to the ears of tenant advocate Sondra Rutherford, 76, who has been fighting landlords ever since she organized a rent strike in 1978 to force her landlord to make much-needed repairs to her East Village building.  She now assists rent-regulated tenants who believe they’re being overcharged.  Rutherford said she has not seen evidence that the market is softening, but she’d be happy if landlords were at the mercy of tenants for a change.

“The landlords are insatiable,” she said.  “They just go overboard with how much they can get.”

Just as high-flying investment bankers and hedge fund managers have had their wings clipped by a down market, Rutherford said, so should landlords who, she thinks, are driven by nothing but recklessness and greed.

“You have to see that kind of moderation come into play,” she said.

Baum said he could not predict how long the downward trend would continue, and that the Manhattan rental market usually defies neat analysis.

“This market never ceases to amaze me,” he said.

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Lopez Lifts LES with Life Lesson Lyrics

Gregory M. White

October 9, 2008

Rene Lopez strikes an unassuming pose on stage. He wears brown plimsolls, Levi’s, and a feathered fedora. He strums and stares, conjured up couplets that flow naturally. They aren’t forced onto his audience.

“You feel naked out there,” Lopez said.

In person he plays with all the innocence of a college-aged boy, perched in his dorm room frame. There is a bedside manner to his solo gigs that evokes the sweet nothings of a cuddle session with your significant other. He still finds the environment intimidating, even after years in music.

“Its hard going up there by myself,” he said

His lyrics flow with hearty, almost simple, earnestness in ‘Nothing’s Left,’ “When I fell from grace all I saw was your face. Stood against the wall as the stones broke my bones.”

“The majority of them come from my relationship with my wife and myself,” he said.

Living in Greenwich Village with his wife Susie and two children, Lopez leads the life of a caring father. The hurried voice of a busy Dad was evident during the phone conversation. He spent the summer on vacation with his family in Los Angeles, where he got back to recording.

“I think being in L.A really refueled me again,” he said.

It was in L.A. that Lopez tried out some new recording techniques that he found “liberating.” Every day he woke up and got to work.

“I’m gonna go in there and write a song and finish it,” he said

He is now tempted to record a stripped down album.

“Let’s make it like when were teenagers in our bedrooms on our four track,” he said.

Lopez has not always been so motivated. He’s been able to play music all his life without holding another job because he has, “some Angels on my side.”

This financial support was not something Lopez wanted to speak about, but he was willing to say he sometimes felt lazy because of it. He felt he wasn’t proactive enough in his career when he was younger and that he was taking advantage of his situation in the wrong way.

“I was living the life of a rock star without being a rock star,” he said.

Lopez has been in several bands in several roles. He started out playing drums then moved to lead vocals, a la Prince, one of his idols. He has played in a soul review and brings all this experience to his current music.

There is an undeniable influence of funk and Motown to the music that Lopez now makes. Its as if you have plucked the earnestness of a songwriter like Marvin Gaye, and stripped the politics off of it, leaving a household charm that evokes Depression Era simplicity. Those artists have a particular feel Lopez prefers.

“I love the way they feel the music,” Lopez said. “I love the way they sing the song.”

Lopez also felt for their ability to convey emotion.

“I love that the songs can be happy about sad things.”

That sort of raw emotion is something Lopez strives for in his acoustic sets.  He said he picked up the guitar to write songs for himself and that he never bothered learning anyone else’s. There is nothing private on stage, where every chord and chorus comes with a crooner’s commitment.

Lopez has been performing at The Living Room in the Lower East Side for the past few weeks and will take the stage there again Mondays in November. He has a show at the Dactyl Foundation, 64 Grand St. on Oct. 17.

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