March 28, 2009
More Evidence that Nonprofit Downturn Worsening
A recent study confirms that nonprofits continue to suffer from the "triple whammy" (declining donations, decreased state funding, and increased demand for services) described in the DLC report we blogged a few days ago. According to a New York Times summary:
The financial health of the nation’s nonprofit groups is rapidly deteriorating, according to a survey of some 900 nonprofit leaders around the country. Only 12 percent of those organizations expect to end the year with an operating surplus, compared with 40 percent who ended their most recent fiscal years with money on hand, according to the survey by the Nonprofit Finance Fund, a charity that provides loans and other financial services to nonprofit groups. Almost a third said they did not have enough cash on hand to cover more than one month’s expenses, while roughly another third said they only had enough money to get them through the next three months. “It’s very clear how fragile financially many of these organizations are, and especially the ones on the front lines, the safety net or lifeline organizations,” said Clara Miller, chief executive of the fund. More than half the respondents said they would like help communicating their financial difficulties to their boards and donors, highlighting the growing belief in the nonprofit world that government and the public do not understand the role it plays in American society. “We don’t tell our financial story well,” Ms. Miller said. The survey echoes other recent reports on the woes of the nonprofit sector, and Ms. Miller said she hoped to use the data to argue for new operating principles and practices for nonprofit groups that would enable them to secure a better financial footing.
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