2006--The Good, the Bad and the Ugly

2006: The Good, the Bad and the Ugly

FS Advisor: Jan. 3, 2006

By Abny Santicola, associate editor, FundRaising Success

An increase in accountability and a decrease in government funding are just two of the major challenges that nonprofits will face in 2006, according to Anthony Knerr, founder and managing director of New York-based nonprofit strategic consultancy Anthony Knerr & Associates, which works with nonprofit organizations on issues of strategic positioning, program development and global campaigns.

Here, Knerr’s take on some hot-button issues looming on the horizon for the new year:

Accountability and transparency: “I think there’s going to be more demand for and interest in benchmarking nonprofits,” Knerr says, pinpointing metrics such as those that determine how nonprofits are fulfilling their mission and ensure that they’re using donated funds wisely and efficiently and have the proper governance.

“That’s an issue that, for a variety of reasons, has been moving more and more center stage, and I think that’s only going to grow for all sorts of reasons,” he adds. “Donors and founders are both getting much more keen on and interested in questions of accountability.”

Reduction in funding: Due in part to the Bush administration’s goal to cut the federal budget deficit in half, Knerr says, “States are being confronted with the mandate to balance their budgets. But with rising healthcare costs and other non-discretionary items, [they] are going to be reducing support for all kinds of nonprofits. Universities are going to be hit especially hard, he suggests.

With the “no-tax- increase atmosphere in the air,” Knerr says, it’s doubtful these reductions will abate in the next 12 months.

Large gifts: Knerr predicts that over the next year there will be a continuation of one of last year’s giving trends in which large gifts were given to museums, universities, performing-arts organizations, etc.