Nonprofit Finance Fund Survey: America's Nonprofits in Danger
New York, March 26, 2009 — America's nonprofits, including the "lifeline” organizations that many depend on for food, shelter, and other basic services, are strained to the breaking point, according to a survey released today by Nonprofit Finance Fund (NFF). The survey of 986 nonprofit leaders in markets nationwide captures the financial state and particular challenges facing these organizations.
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.
"The survey reveals the precarious state of a sector that is continually asked to do more with less, and brings a long-standing problem into sharp relief,” said Clara Miller, President and CEO of Nonprofit Finance Fund. "Lifeline organizations, 91% of which focus on serving vulnerable populations, simply will not be around to provide critical services if we continue with current practices. We must free the entire sector from the archaic assumptions and harmful constraints that keep many organizations perpetually on the brink of survival, and especially at risk in times of recession.”
Adjusting to a new financial reality
Nonprofits are taking steps to weather the recession that range from cuts to essential programs to layoffs. When asked to identify actions taken within the past 12 months or planned for the next 12 months: 39% identified "reduce or eliminate programs”; 41% identified "reduce staff or salaries”; and 23% identified "delay payments to vendors.”