Wednesday, July 1, 2009

Two New Studies on Recession's Effects on Charities

Two new studies, one by the Johns Hopkins Listening Post Project and the other by The Bridgespan Group detail the effects of the recession on charities.  As one would expect, the news is mostly grim: the Johns Hopkins study found that 80% of charities reporting financial stress and nearly 40% of the respondents described that stress as "severe."  Theater and orchestra groups appeared particularly pessimistic, with one-third of theater respondents and almost a quarter of orchestras reporting concerns about whether they would continue to exist.

The Bridgespan report, which is an update of a survey first taken in November of 2008, found that the percentage of nonprofit that have laid off employees increased during the six months from the first survey and that more charities were making broad-based program reductions.  More organizations were drawing down on reserves, as well.

Still, some charity leaders see a silver lining.  Forty-five percent of those in the Bridgespan survey were optimistic that their financial position would improve over the coming year, while only 22% thought it would worsen.  And many saw a benefit to paring down services to their core mission - a chance to "refocus" their efforts on what they do best.


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