Lucy Cabrera says demand for aid is growing fast at the Food Bank for New York City.

Photograph courtesy of the Bill & Melinda Gates Foundation/Lou Linwei

Jeffrey S. Raikes has taken a global listening tour as he starts his new job at the Bill & Melinda Gates Foundation.

Arnold Adler, for The Chronicle

Anthony Romero, head of the American Civil Liberties Union, says his organization is bracing for losses because of the Madoff investment scandal.

From the issue dated January 15, 2009 About Charities and the Economy NONPROFIT GALLERIES AND THEATERS are bracing for a tough year that could see the closure of a number of small arts groups. THE CREDIT CRUNCH at the heart of the country's economic downturn has been particularly hard for charities, many of which rely on lines of credit to manage cash flow. NONPROFIT LEADERS hope President-elect Barack Obama and the new Congress will devote at least part of their much-anticipated stimulus plan to setting people to work on the country's most pressing social problems. AT LEAST 41 STATES and the District of Columbia expect budget shortfalls this year, grim news for charities that rely on government grants and contracts. IN SOUTH FLORIDA, the Community Foundation of Broward was better prepared for the recession than many, due in part to the slow progression of economic trouble in the state. AT WORLD CONCERN, a Christian relief group, the financial picture at the end of the summer looked promising; then came October, and a 30-percent drop in donations. TICKET SALES and donations at the Charleston Symphony Orchestra declined sharply in the fall, a problem made worse by management missteps during easier times that left the group vulnerable to an economic slump. THE FOOD BANK FOR NEW YORK CITY ended 2008 better than expected, thanks in large part to generous help from two foundations, but the difficult winter months are still ahead. About Giving PRINCETON UNIVERSITY HAS settled a protracted, and closely watched, lawsuit focused on how well its use of a major gift adhered to the donors' wishes. AT LEAST 16 PEOPLE made donations of $100-million or more last year, the largest number recorded in the 12 years The Chronicle has been keeping such a tally. NINE CALIFORNIA GRANT MAKERS have pledged $30-million over the next few years to assist minority-led charities or those that serve minority groups. JEFFREY RAIKES, the new chief of the Bill & Melinda Gates Foundation, hopes the Gates fund can encourage other wealthy grant makers to give more, not less, during the downturn. THE FACE OF PHILANTHROPY: Internews Network has trained more than 70,000 journalists in the world's poorest countries. RECENT GIFTS to nonprofit organizations and institutions. RECENT GRANTS by foundations, corporations, and other grant makers. About Managing BERNARD L. MADOFF and the pyramid scheme he reportedly admitted to perpetrating turned what had already promised to be a difficult year into a disaster for some charities and philanthropies. BOARD MEMBERS at charities and foundations that lost investment assets to the Madoff fraud could find themselves liable under state and federal laws that impose fiduciary responsibilities on trustees. INVESTMENT STRATEGIES at more than one-fourth of American charities have been revised in light of the stock-market tumult, a trend that is likely to accelerate, a new report indicates. AN INVESTIGATION has turned up new details of a controversial deal to sweeten the pension benefits of the head of the United Way in Charlotte, N.C. EIGHTEEN MONTHS after it set out the first proposed changes to the informational tax return that nonprofit groups must file, the Internal Revenue Service has released the final revised Form 990 (Tax Watch). CHARITABLE DEDUCTIONS in 2006 totaled $186.6-billion, 1.4-percent less than the preceding year after accounting for inflation (Tax Watch). TWO GROUPS have proposed increasing the limit on the amount people can donate to charity from their individual retirement accounts (Tax Watch). About Fund Raising GIFT ANNUITIES will pay donors slightly less under new terms recommended by the American Council on Gift Annuities in response to the troubled economy. FUND-RAISING COMPANIES hired to solicit donations for charities often end up keeping a large portion of the take for themselves, according to new reports from three states. A PENNY FOUND could be a boon for charity if more people followed Bob Levey's example. UPDATE ON CAMPAIGNS for endowments, capital improvements, and other needs. INTEREST RATES for planned gifts, issued by the Internal Revenue Service. About Technology AT LEAST TWO ONLINE GIVING SITES saw a growth in donations for 2008 despite the troubled economy, though at Network for Good the increase was less than in past years. AN INTERACTIVE MAP created by the Foundation Center tracks grants and program-related investments made to help alleviate the impact of the economic downturn. THE PEPSI BOTTLING GROUP has enlisted all of the company's 27,000 cellphones in a national effort to locate missing children. About Philanthropy Careers AFTER LEAVING VIETNAM as a child refugee in 1975, Le Nhan Phuong is back, in charge of a $56-million grant program. A VISIT TO A PRISON led a venture capitalist, who saw the potential talent pool behind the bars, to found a charity that teaches business skills and entrepreneurship to inmates (Entry Level). Also in This Issue OPINION: Clara Miller proposes a new way to think about financing charities over the long haul; Joel Fleishman and Edward Skloot urge more investment in national service as one way out of the economic morass; Lester Salamon suggests ways to draw charities into whatever recovery plan Congress and the new president devise; Mark Kramer and Amber Johnson see in the Obama inauguration a window for foundations to effect real change; Michael Peregrine offers advice for nonprofit investment committees; and Gary Tobin argues that a loss of trust is at the heart of the Bernard L. Madoff scandal and the damage he inflicted on Jewish charities. NEW BOOKS: A look at what motivates philanthropists to give, a handbook on using "the psychology of persuasion" to raise money, and a textbook to train nonprofit leaders. PEOPLE: Appointments and promotions in the nonprofit world. AWARDS: Honors for people and organizations in philanthropy.