Crains New York - April 1, 2013 - (Page 4)
IN THE
Nonprofits see brighter future MARKETS
as local economy recovers
by Aaron Elstein
BY THERESA AGOVINO
Executives at nonprofit groups in
New York City are feeling more
confident about the future, with an
increasing number saying they plan
to add new programs and serve more
people this year than they did in
2012, according to a new study.
This year, 61% of nonprofits surveyed planned to boost services,
while 57% expected to add clients,
according to the study by the Nonprofit Finance Fund, which makes
loans to charitable organizations.
Last year, only 53% of the groups
said they had expanded programs
while 44% served more people.
The executives’ optimism likely
stems from their organizations’ improved financial picture. According
to the study, 31% of nonprofits surveyed ended their 2012 fiscal year
with a deficit while 22% broke even;
yet 23% predict they will end their
2013 fiscal year in the red, while
38% believe they will break even.
Despite the brightening picture,
executives say many organizations
are still struggling in the aftermath
of the recession, which increased
need and decreased funding.
“I think they are getting used to
the new normal and accepting that
the money they used to get isn’t coming back,”said Anjali Deshmukh,director of knowledge and information
for the Nonprofit Finance Fund.The
organization surveyed 224 charities
in New York City as part of a bigger
survey of 6,000 nonprofits in the U.S.
in such sectors as health, the arts and
human services.
Raising record sums
Ms. Deshmukh said that some
organizations are also simply learning how to raise money more effectively and managing resources better.
That’s what Brooklyn Commu-
Groups are
‘getting used
to the new
normal’
nity Services did. Last year, its annual gala raised a record $500,000.
But it has made a point of reaching
out to younger donors through social media and has put auction items
online to expand the pool of potential buyers.
Meanwhile, the Brooklyn
agency broke even in its most re-
cent fiscal year after logging three
years of deficits. Its executives
made some tough choices to get its
financial house in order, like closing a homemaking program designed to help families stay together.
It also laid off staff from other programs, eliminating about 70 positions, bringing the total number of
employees to 375.
“You have to take a look at
whether your program made sense,”
said Marla Simpson, executive director of the agency that provides a
broad range of social services.
Some groups are growing after
retrenching. At Sunnyside Community Services, Executive Director Judy Zangwill said she plans to
add four or five people to her staff
because the organization initiated
two health care-related programs.
However,that may not happen if the
city’s budget is passed in its present
form because it will result in $1 million of cuts to the organization. The
city accounts for about 60% of the
group’s budget.
The organization, which provides a variety of services to about
14,000 people ranging from children to adults, is already smaller
than it was three years ago when it
served 18,000 people. That year it
also laid off about five people and
cut a food stamps program.
“The financial picture is better,
but I don’t feel we are out of the
woods yet,” said Ms. Zangwill. Ⅲ
ROBERT WILMERS,
M&T Bank CEO
patrick mcmullan.com
Lingering effects
of Great Recession
remain, survey finds
Buffalo banker
wings into NYC
I
n the coming months, New Yorkers will see many more
signs for M&T Bank Corp., a Buffalo, N.Y.-based
institution that’s poised to add 135 branches locally
when shareholders later this month sign off on its $3.7
billion acquisition of New Jersey’s Hudson City Savings.
M&T didn’t follow the herd by making crazy real estate
loans during last decade’s bubble, although it took grief from
some Wall Street analysts for not being more aggressive. But
its strategy paid off big-time, with its stock price returning
43% during the past five years, while its peer index has sunk
by 50%. One of its largest shareholders is Warren Buffett.
“This company has always
maintained it will protect the integrity of its balance sheet at the expense of earnings growth,” said
Gerard Cassidy, an analyst at RBC
Capital Markets.“The result is that
over the past 20 years, three banks
have consistently outperformed:
Wells Fargo, U.S. Bancorp and M&T.”
Besides outstanding performance, what interests most about
M&T is Chief Executive Robert
Wilmers,who has run the bank for 30
years. His annual shareholder letters read unlike anything written by
any other bank CEO.
In his latest, from early March,
Mr. Wilmers noted that fines,
penalties and legal settlements cost
the six largest banks $29 billion last
year, more than double 2011’s toll.
“To the average citizen, these figures imply that the problem [with
large banks] is getting worse—and
at an accelerating pace,” he wrote.
To restore public confidence,
Mr. Wilmers suggested, one step
bankers must take is reducing their
“astronomical levels” of pay. “The
6
time is right for boards and executives to right-size compensation
and make clear to the public what
the new limits will be.”
Mr. Wilmers was awarded $3.4
million in total pay last year.That is
one-sixth the amount awarded
JPMorgan Chase CEO Jamie Dimon,
whose bank during the past five
years has generated shareholder returns precisely half that of M&T.
On regulatory reform, Mr.
Wilmers wrote: “The most effective regulation must be based on
clarity and simplicity. Put another
way, when the rules are easy to understand and follow, there’s a
greater likelihood they’ll be followed.… Indeed,we might consider [complex new rules] a kind of
misguided regulatory chemotherapy—where the treatment meant to
eliminate cancer cells damages
healthy ones in the process.”
Can Mr. Wilmers maintain his
honorable stance amid the bright
lights of the big city? At 78,he probably doesn’t care what the New York
banking crowd makes of him. Ⅲ
THE NUMBER OF DAYS’ NOTICE that Berkshire Bancorp CEO Steven
Rosenberg gave after handing in his resignation on March 25. It isn’t clear
why Mr. Rosenberg said he’d leave after 20 years at Berkshire, but the New
York-based bank last week said it would be late filing its annual report because of
delays in “obtaining certain information.” A call to the bank wasn’t returned.
4 | Crain’s New York Business | April 1, 2013
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Table of Contents for the Digital Edition of Crains New York - April 1, 2013
IN THE BOROUGHS
IN THE MARKETS
THE INSIDER
BUSINESS PEOPLE
OPINION
BOB PREVIDI
GREG DAVID
REAL ESTATE DEALS
HEALTH CARE REPORT
CLASSIFIEDS
SMALL BUSINESS
NEW YORK, NEW YORK
SOURCE LUNCH
OUT AND ABOUT
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