Bill Keveney, USA TODAY | November 26, 2021

Rising toy prices, up as much as 10%, and potential shortages of popular items could challenge holiday shoppers. Charity donation drives and the people they serve may be most significantly affected, as overall economic pressures raise the number of children in need of dolls, games and puzzles while also diminishing donors' ability to give.

"With the cost of toys going up, there are going to be families that (may) not be able to get what they need for their children at Christmas, so we do anticipate more of a demand from families across the country,” said David Cooper, vice president of operations for the Marine Toys for Tots Foundation, one of the nation's largest holiday toy providers.

Cooper, a retired U.S. Marine Corps lieutenant colonel, and organizers of other toy-related charities express hope that donations, which tend to rise as the holiday-shopping season gets into full swing starting on Black Friday, can meet the rising demand. That will be a challenge.

Although toys aren’t as essential as food and shelter, they are hardly a frill, with games and play serving a vital function in a child's social and psychological development, said Pamela Mastrota, executive director of The Toy Foundation, the industry's philanthropic arm. Toys and games are especially important in providing comfort and stability for children in the middle of family, financial or health crises during the holiday season, with Hanukkah (Nov. 28 to Dec. 6) and Christmas (Dec. 25) around the corner.

U.S. Marines collect donated goods as part of Toys for Tots, a campaign to provide gifts to children in need at Christmas.

Meghan D. Kelly, director of patient and family programs at The Children's Hospital at Montefiore in The Bronx, marvels at the way a small toy, whether it's a fidget popper or Play-Doh, can help calm an agitated child, an increasingly common situation encountered at the hospital during the mental-health emergency resulting from COVID-19.

Kelly, who is concerned holiday donations may be lagging after so many people increased giving earlier in the pandemic, received a message about the power of toys from a woman who was treated at the hospital as a child 16 years earlier.

"She said, 'I was very sick. I almost died. I know a lot of bad things happened and they took very good care of me, but the thing I remember most is that you came to see me every day and brought me toys to play with. And that made me feel better,' " Kelly said. The young woman "went through a very traumatizing experience, with all the pain, anxiety and fears, but what she remembered was the play and interaction with a person who was being playful. That encapsulates how important it is to offer these things to children."

Toy sales are up, but so are prices

Toy sales overall have been robust this year, up 17% over the first nine months with higher prices, the child-tax credit and "continuation of pandemic lifestyles" that have resulted in a spike in product buying among the reasons cited for growth, according to The NPD Group, which tracks industry sales.

However, third-quarter sales, while still up, had a lower percentage increase than the first two quarters, with an industry professional suggesting that may reflect supply-chain delays.

Toy prices reflect the pressures facing the overall economy: raw material, labor and transportation costs are up, much of it resulting from the COVID-19 pandemic, while snags in the supply chain, as evidenced by container ships stalled outside of major U.S. ports, have made toys scarcer and increased the cost of delivering them. Many toys come from China.

Priscilla Gonzales, a Family Resource Specialist at DePelchin Children’s Center in Houston, Texas, is seen picking up donated holiday gifts that she will deliver to her clients before Christmas in 2020.

The Toy Association, an industry trade group, estimates prices will be up 5 to 10% this holiday season, with Maddie Michalik, senior editor at The Toy Insider, pegging the rise at 10%. That means an extra $2 to $3 for a doll or action figure, with higher-priced items such as dollhouses costing $20 to $30 more, Michalik said.

As a result of higher costs and more limited inventories, donations from manufacturers this year are down 50% to 60%, Mastrota said. Demand is especially high for arts and crafts, puzzles and brain-teaser games for children 3 to 13, she said.

Toy "companies are incurring higher costs to ship product and having issues with getting (it) into the country. (Then) we're seeing problems in the time it takes to get it off ships into the ports and with trucking it through the country. It's increased prices and (reduced) inventory across the board," Mastrota said. Higher prices have "put a strain on families …but we're also seeing less product donation as a result of inflation and low inventory."

Isaac Larian, CEO of California-based toymaker MGA Entertainment, estimates manufacturing and shipping costs have surged by more than 20%, with most of that eventually passed on to the consumer.

MGA Entertainment CEO Isaac Larian, seen at the October premiere of "LOL Surprise: The Movie" in Los Angeles, heads a company that oversees many popular children's toy brands, including "L.O.L. Surprise!" and "Rainbow High" dolls.

He said his company, which has donated many millions of dollars in toys and other products over the years, and other donors can help make up the slack, but distribution problems mean some toys may be stuck on a cargo ship when they should be under a Christmas tree.

Of the multitude of containers stalled at the ports of Los Angeles and Long Beach, "750 of them (that contain millions of toys) belong to MGA. And they include hot toys like Rainbow High, L.O.L. Surprise!, Little Tikes, etc., that's never going to make it to Christmas," said Larian, who added that supply-chain delays are one reason MGA will only meet 65% of demand for its popular Rainbow High line. "Whether it's Hanukkah or Christmas, those are magical days for a child and they don't understand the supply chain."

So, even with donations, children are "not going to get as many toys as they had last year," he said. "My heart goes (out) to them."

A 'push down on the middle class'

The question of whether donations can match need comes after more than a year in which charitable organizations, companies and individuals rose to the challenge posed by the economic ravages of COVID-19 that were felt by so many. Overall giving was up 5% in 2020, reaching a record-breaking $471.4 billion, said Michael Thatcher, president and CEO of Charity Navigator, which provides prospective donors with data and evaluation of non-profits.

Although giving is up, the contributions come from fewer places, with a greater reliance on multi-billion-dollar mega gifts. Only 50% of Americans now give to charitable organizations, down from about two-thirds 20 years ago, Thatcher said.

That's partly a sign of "a push down on the middle class" that likely results in more families in need and fewer being able to contribute. Longtime donors continue to give, Thatcher said, but it's not as clear that first-time contributors during the pandemic will continue.

A child waves after receiving a gift at a First Responder Children's Foundation event.

The pandemic also shifted charitable giving, with money going toward COVID-19 health and financial relief that might previously have gone to other areas, including toy charities, Thatcher said. Although it's only a small sample, donations to top toy-related charities made on the Charity Navigator platform are 16% down year to date from 2020.

Charitable organizations are expanding toy drives and fund-raising efforts, with hopes of a late-season windfall, and many say they think they will be able to keep up with growing needs in the community.

The Holidays from the Heart campaign at Children's Hospital at Montefiore is raising money for children's gifts and has an Amazon Wish List that allows donors to pay for specific toys.

There's hope that late-season giving can save the day, whether it's in the form of individuals buying an extra gift when holiday shopping or corporations making a big cash or in-kind gift. "When there's an issue, they come to help," said Cooper, the Toys for Tots Foundation vice president.

After ordering nearly 50% more toys, books and games to make up for a 12% drop in individual donations in 2020, the foundation, which supplements and assists hundreds of local Toys for Tots drives around the country, made a logistical shift to soften the effects of product demand and scarcity this year.

In anticipation of supply-chain issues and continued COVID challenges, the foundation increased its holiday toy order by 21% and submitted it a month earlier than usual this spring, Cooper said. It will purchase more toys in the coming days to help meet demand.

A child shows the need for toys

The push to have enough toys to meet the needs of the growing number of families relying on toy donations is taking place at DePelchin Children's Center, which serves families and children, including those in foster care, in Houston and other Texas cities.

The center is seeking sponsors for 200 out of more than 1,100 children on its holiday gift-bag list – up from 960 last year, when a drop in in-person classes and events resulted in fewer sign-ups, said Kelsey Pett, DePelchin's volunteer and community engagement manager.

Families and children served by organizations like DePelchin often need help with basics, including housing and utility costs. But holiday toys are important, too, especially for children living with difficult family situations or in foster care.

Lisa Garces, left, a senior vice president at DePelchin Children's Center in Houston, and her daughter, Sky, take a Polar Express holiday ride in 2020. This year, they are sponsoring a child as part of a DePelchin gift program that provides toys and games to children at the holidays.

"For some kids, that's the first gift that's completely new, that's completely theirs, that they do not have to share," said Lisa Garces, the center's senior vice president of advancement. "It means a lot to them."

Garces learned the importance of holiday gifts firsthand after adopting her daughter, Sky, now 9, who had previously been in foster care.

"One of the things I recognized as the parent of a child who had been through tough situations (was the need for her to) cling to her childhood, cling to magic. Christmas is huge for her. It's like, 'This is my childhood. This is my choice. This is something that gives me joy,' " said Garces, adding that Sky's foster mother made the holiday into a festive occasion.

Setting an uplifting example, Sky, a straight-A student who is attending robotics camp, and her mother are now helping others celebrate the holidays by sponsoring a child through DePelchin, which they refer to as "Santa's Workshop."

"Now that she has the security of knowing she has her forever family that gives her her gifts, we're shopping for the first child we've sponsored," a girl around Sky's age with similar interests, Garces said. "She's going to get to shop for one of our children. There's a sense of her being free to give back, to give to others. … That's really a blessing."

This article originally appeared on USA TODAY: Inflation, supply-chain kinks squeeze holiday toy drives for children