Just about every U.S. state is facing budget shortfalls, some larger than others. "With a federal deficit also spiraling upward, the communities and nonprofits affected will turn instinctively to private philanthropy," said Raymond. "Assessing state philanthropic patterns, rather than national sources, is important, since so much of U.S. philanthropy is tied to the communities in which the givers (be they individuals or foundations) live or are headquartered."

However, Raymond said of the top 10 states with the highest projected budget deficits for 2004, only New York is in good shape to tap local philanthropy. The state ranks in the top 10 of state philanthropy as measured by the average contribution per tax return and philanthropic contributions as a percent of gross income.

Except New York and South Carolina, the other states have lower levels of philanthropy than the national average. Raymond foresees four consequences.

"First, philanthropies and philanthropists will feel the pain of state budgetary deficits," she said. "Second, making those choices will require philanthropies to develop and adhere to increasingly rigid decision criteria. Third, hard feelings will ensue. Not all nonprofits constrained by budget cuts will find solace in local philanthropies."

She said the fourth consequence is the most dangerous of all. "Disappointments on the part of nonprofits and a sense of being overwhelmed on the part of philanthropists could erode trust," said Raymond.

She added, "In states with major budget deficits and weak philanthropic records, nonprofits will be the 'have nots.' Philanthropies will be the 'haves.' The fruit of frustration could be distrust. And that fruit could be bitter indeed for years to come."