Nonprofits in Trouble

Okay, so as I was not able to find too many lectures or events of interest this week, I thought I would post on something current, topical and that also hits close to home.

Like every other industry, the nonprofit sector has been all over the news of late with stories and reports discussing the impact of the recession in the charitable world. A recent survey by the Nonprofit Finance Fund found that a significant percentage of organizations are feeling an intense strain from the current economy. Some of the key findings include:

-- Only 12% of all respondents expect to operate above break-even this year.
-- Just 16% anticipate being able to cover their operating expenses in both 2009 and 2010.
-- 31% don't have enough operating cash in hand to cover more that one month of expenses, and another 31% have less than three months' worth.
-- 52% of respondents expect the recession to have a long-term (2+ years) or permanent negative financial effect on their organizations.
-- 93% of lifeline organizations that provide essential services anticipate an increase in demand in 2009.

As a former, and hopefully future nonprofit professional, this report does not surprise me at all. As the economy worsens, the ability and willingness of the donor community (both individuals and institutions) to continue making contributions at the same level has diminished. At the same time, the demands on those cash strapped organizations have only increased as they are forced to meet a greater demand with fewer financial and human resources. I can only hope that the tide will turn soon enough to prevent permanent damage.