Study: 76% of Not-for-Profits Report Funding Challenges During Economic Downturn
UHY Advisors (“UHY”) announced the release of its 2023 Not-for-Profit Trends Report, which polled over 225 executives within not-for-profit organizations across sectors including healthcare, education, social / community services, and others with annual revenues ranging from less than $250,000 to over $10,000,000.
“The recent economic downturn over the last few years has been felt in every corner of the business world but has been felt particularly acutely within the not-for-profit sector,” said Brian Kearns, partner and a leader of UHY’s Not-for-Profit practice. “Organizations throughout the not-for-profit space have had to juggle numerous priorities and economic stressors – from coping with increased turnover to stretching bottom lines – all while demand for their services has skyrocketed. This report digs into the pressure points and concerns these pivotal organizations are facing as they look to deliver much needed support during these incredibly uncertain times.”
Key findings in this year’s report include:
Over three-quarters experience funding challenges
Per the study’s findings, 76 percent of respondents said that their organizations have experienced either stagnant funding (41 percent) or decreased funding (35 percent) over the last year. This is a significant shift from 2022 when 40 percent of respondents reported an increase in funding while only 22 percent reported a decrease and 34 percent reported no change.
In terms of where the biggest losses in funding have come from, 29 percent of respondents said the biggest reduction was from individual contributions, followed by corporate contributions (19 percent) and grants (15 percent). In addition, 40 percent of respondents said they had seen a decrease in corporate engagement over the last year, while only 18 percent said they saw an increase.
Arts and culture and social / community services hardest hit
Per the research’s results, the arts and culture (44 percent), social / community services (37 percent) and education (30 percent) categories saw the biggest declines in funding over the past year, while the healthcare (44 percent) and trade, member and professional (33 percent) categories saw the biggest increases.
On the other hand, in terms of increased demand for services, the social / community services (67 percent), healthcare (56 percent) and education (41 percent) sectors reported the highest increases in demand over the last year.
Economy undermines not-for-profit recruitment and retention
Per the study, the down economy is also having a significant impact on the not-for-profit sector’s ability to recruit talent, with 60 percent of not-for-profits saying that it has become harder for them to find talent – while 10 percent said that it has gotten easier. In addition, 44 percent of not-for-profits said that turnover has increased during the economic downturn of the last year, while only 7 percent have said that it has decreased.
To read the full 2023 Not-for-Profit Survey and Trends Report and learn more about the challenges and opportunities facing the not-for-profit sector, click here.
The preceding press release was provided by a company unaffiliated with NonProfit PRO. The views expressed within do not directly reflect the thoughts or opinions of the staff of NonProfit PRO.