Insurance and Utilities and Philanthropy and Transportation, Distribution & Logistics

Charities are feeling pain of gas price spike: Groups scrambling for volunteers, dollars to beef up transportation

March 31, 2008

With gas prices on the rise-and expected to reach $4 a gallon this summer-local not-for-profits are losing volunteers and throwing money at skyrocketing transportation budgets.

Indianapolis Meals on Wheels Inc. Executive Director Barb Morris is used to fielding calls from reporters whenever gas prices fluctuate. In the past, she quashed their theory that high prices at the pump drove away volunteers. Not now, though.

"If you'd asked me four or five months ago, I would have said, 'Absolutely not,'" Morris said. "But now we are losing some of our volunteers and at a faster rate than normal. We think it's finally at the point where it's affecting our ability to recruit volunteers."

Indiana regular unleaded gasoline prices hovered at $3.25 a gallon in late March and are expected to rise this summer. The U.S. Department of Energy predicted recently that summer prices would hit an average high of $3.40 a gallon nationally. Independent experts say that's a low-ball estimate and predict prices above $4 a gallon.

That's not good news for not-forprofits whose missions include a lot of driving.

At Noblesvillebased Janus Developmental Services Inc., for example, officials have had to find an additional $16,000 to cover higher transportation costs.

Janus runs a shuttle service that picks up developmentally disabled students for vocational training. It also operates Hamilton County Express, a public shuttle that provides rides to individuals in the county.

"We're definitely feeling the crunch," said CEO Connie F. Sanders. That extra $16,000 represents more than 10 percent of the organization's $121,500 transportation budget. Officials have trimmed spending elsewhere and retooled shuttle routes to make sure they're as efficient as possible. Janus also has invested in newer, fuel-efficient vehicles.

The shuttle services cost $3 per one-way trip for the general public. Federal, state and local grants help subsidize the costs, keeping rates low, Sanders said. But if gas prices continue to rise, Janus might be forced to hike fees.

"We're not going to now, but I'm not saying that's not something we won't consider in the future," she said.

At Indianapolis-based Second Helpings Inc., paid employees drive 10 refrigerated box trucks to restaurants to pick up leftovers that job trainees convert into meals for local not-for-profits. Volunteers then use vehicles provided by the organization to deliver 2,900 meals a day to 50 agencies in Indianapolis.

Fuel costs make up about $25,000 of Second Helpings' $4.3 million annual budget. CEO Cindy Hubert said the hardship comes because not only are gasoline prices up, but so are costs for other utilities.

"We just finished an appeal letter reminding people what it costs to run a truck for a day and a week," she said. Second Helpings runs on a fiscal year that begins on July 1. For 2008, leaders looked ahead and budgeted assuming gas would cost $3 a gallon, which saved them from feeling the pinch until recently. Leaders now are planning the 2009 budget and are assuming $4-a-gallon gas prices to be safe.

"If we don't, we end up behind," Hubert said.

For charities such as Meals on Wheels that depend on volunteer drivers, the higher prices are affecting more than the bottom line. Some volunteers are driving less or dropping out altogether.

Meals on Wheels in Indianapolis has 1,600 volunteers to cover 41 routes, delivering 800 meals a day; but it also has paid drivers on standby in case a scheduled volunteer doesn't make it. Lately, it has been using the paid drivers more often.

In the last quarter, the agency had 16 percent of its routes uncovered, up four percentage points from the previous quarter. That translates into about $8,000 more in payments to the contract drivers over the past year.

"[Paid drivers] may normally do two routes a day," Morris said. "Now, they're doing three or four."

Morris said the agency is running ads and calling on existing volunteers to recruit new drivers.

It's a similar story at Meals on Wheels of Hamilton County Inc. There, staff members pitch in to cover route openings. Executive Director Marti Lindell said she's out as often as once a week now-which takes away from time she could spend networking at business events, where she often goes to recruit companies to volunteer for a route.

"It was easier for us to find drivers a year or two ago," she said.

To help recruiting efforts, the organization tries to make sure all routes are less than 25 miles.

"We figure, that way, an average car will use one gallon of gas," she said. "We've tried to be considerate of our volunteers."

Not-for-profits must expect some price volatility and are smart to set up reserves for special needs, said Kirsten A. Grønbjerg, Efroymson professor of philanthropic studies at Indiana University's Center on Philanthropy.

"But there aren't any easy solutions [for not-for-profits]," Grønbjerg said. "They usually operate quite close to the margin."

Further complicating the problem: Not only are gas prices on the rise, but donations also tend to suffer during an economic downturn, she said.

"It's a tougher sell because people themselves are struggling with health insurance costs and foreclosure," she said. "It's going to be a challenge, especially if this turns out to be a tougher recession than past downturns."
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