As charities prepare to kick off their annual holiday donation drives next month, many are bracing for dismal earnings even as they're already seeing big increases in need from families struggling to pay bills.

Holiday campaigns often raise the bulk of funds for the following year, so now is a critical time.

"Everyone's worried," said Howard Garval, chief executive officer and president of Child and Family Service, which has seen dozens more people seeking help over the past few months because of the nation's foundering financial system. "When the economy goes south, funding goes south, but the need goes up."

A preview of how donation drives could fare in the winter came yesterday at Hawaii Public Radio — which for the first time in at least a decade had to continue its semiannual pledge drive for a full 10th day. In the past, the drive to raise $741,000 has lasted as few as seven days.

Michael Titterton, HPR president and general manager, said the drive has been a "different animal" altogether than any he has encountered.

Overall, the number of donations are up, but the amount of each donation is down by about $12 on average.

"Obviously, we had no small trepidation going into it (the drive)," said Titterton, adding by yesterday afternoon the station had received about $690,000.

The worries over decreased donations from the public during the holiday season come as charities statewide are also seeing other sources of funding dry up. The amount doled out to charities from state contracts and grants dropped considerably this year as revenues to government decreased, and local and national foundations also are decreasing their funding because of losses in the tanking stock market.

Meanwhile, nonprofits are reporting skyrocketing levels of need from working families, who are struggling to make ends meet as prices rise and paychecks don't.

The situation isn't expected to get much better anytime soon: The downturning state economy is tipping into a recession, according to a recently-released University of Hawai'i economic report, which could trigger more job losses.

The state already has seen a recent string of layoffs at major Hawai'i companies and is weathering increasingly alarming declines in visitor numbers. Nonprofit leaders say working-class families are seeing the brunt of the financial storm, and are struggling even to put food on their tables. Lines for free-food pantries are growing, they say, while charities are getting more requests for help to pay rent and bills.

"People are hurting out there," said Daniel de Castro, spokesman for Salvation Army Hawai'i.

NEED FOR AID BOOMING

So far this year, Helping Hands Hawai'i has assisted more than 2,057 households with emergency checks for rent, bills or other household expenses — providing a total of $209,906 to needy families. The totals represent a 62 percent increase in the amount of money given out, compared to last year over the same period, and a 35 percent increase in the number of families helped, Helping Hands officials said.

The Salvation Army helped about 48 households last month with rental assistance, up from 30 in September 2007. Some 407 people were helped with food assistance, from 261 in September of last year.

And Aloha United Way's 211 telephone services — where residents can call to link up with nonprofits — has seen a big increase in calls for assistance. In the three-month period ending Wednesday, 211 got some 779 calls for food pantries (up from 556 in the same period in 2008), 368 calls for rental assistance, and 171 calls for help filing for welfare, nearly triple the number compared with last year

"Our clients are feeling more squeezed than ever," said Brian Schatz, Helping Hands executive director.

To stretch their family budgets, people are flocking to thrift stores to buy nearly-new things for a fraction of the price. Salvation Army Hawai'i stores have seen a 30 percent increase in sales in recent months. Goodwill stores saw a 6 percent increase. And the Assistance League thrift shop on Young Street is similarly buzzing these days, with people looking for everything from clothing to appliances.

Marti Frensley, Assistance League thrift shop manager, said she is seeing a lot of new faces.

But sales, she added, aren't up by much because donations of household items are down.

At the Assistance League on a recent weekday, there were about a dozen people in the store shortly before closing.

Cho Gillespie, 68, was looking through the aloha shirts for any his size. "Only $2.50," he exclaimed, holding out a shirt. "This shirt would cost you $100 new."

Gillespie, who is retired, said he has been coming to thrift stores more often because his fixed income isn't going as far as it used to.

"I have a fixed income," he said. "I can't go out and splurge."

NONPROFITS OPTIMISTIC

With the increased financial strains on residents, many charities are moving ahead with their fundraising drives without significant changes, hoping to raise just as much or more than previous years.

They are also remaining optimistic, pointing to the outpouring of support for local charities after the Sept. 11, 2001, terrorist attacks. That year, despite a big impact on the state's tourism industry and scores of layoffs, charities in the Islands actually saw no significant decrease in donations.

It's difficult to say whether that will hold true in the current economy.

"Obviously, people are anxious. But people in Hawai'i are very generous when times get tough," said Jerry Rauckhorst, president and CEO of Catholic Charities Hawai'i.

He and others pointed out nonprofits get their funding from different sources, and some depend more heavily on individual and corporate giving than others. "When it comes to fundraising, this is just a very important time of the year," Rauckhorst said.

Lisa Maruyama, president and chief executive officer of the Hawai'i Alliance of Nonprofit Organizations, said many nonprofits are talking now about the tough decisions — such as layoffs or program cutbacks — they might have to make next year if funding falls short.

"I think the effects of the economic crisis have not quite materialized for most organizations, but the specter of it is still enough to shake things up," she said, adding that some nonprofits could start donation drives earlier this year or make more urgent appeals of donors.

She said nonprofits are also adopting "more frugal spending practices" to save money and avoid "being frivolous ... and impractical during hard times."