Nonprofit Finance Fund Survey: America's Nonprofits in Danger
"Like many other nonprofits, we have had to make cuts that directly and negatively affect the people we serve," said survey respondent Felix Rouse, CEO of the Boys & Girls Clubs of Newark. "We have temporarily closed one of our five sites. We have reduced our program offerings from 47 to 30, and have had to lay off about 25 employees (28% of the workforce). We are having a hard time with cash flow due to the lack of unrestricted revenue."
Many organizations are experiencing a decline in funding even as demand increases. In 2009, 43% of respondents expect a decrease government funding; 62% expect a decrease in financial support from foundations; and 49% expect a decrease in contributions from individuals.
Change on the horizon
Nonprofit Finance Fund recommends that funders and nonprofits work together to address fundamental practices and strategies, along with tactics, that will improve the strength and readiness of the sector. Many nonprofits leaders who responded to the survey expressed interest in exploring new ways to manage through the crisis and beyond, to continue serving their communities: 58% would like to conduct scenario planning; 52% want help communicating their financial picture to board and/or funders; and 34% are interested in program profitability analysis.
"This crisis presents funders and government with an opportunity to substantively change practices that perpetuate inefficiency and stymie innovation and growth," said Miller. "The talent, resources, and passion that people in the sector bring to the goal of addressing society's most pressing issues must be protected and nurtured. This recession is forcing the issue of how to better invest in what works for the benefit of society."
ABOUT NONPROFIT FINANCE FUND
Nonprofit Finance Fund (NFF) is a national leader in nonprofit, philanthropic and social enterprise finance. Founded in 1980, NFF provides loans, access to capital and consulting services that build the capacity and the financial health of nonprofits. A leading community development financial institution with over $80 million in assets, NFF has provided over $190 million in loans and access to additional financing via grants, tax credits and capital in support of over $1 billion in projects for thousands of nonprofit clients nationwide. NFF has a staff of more than 75 serving nonprofits nationally from offices in Philadelphia, New York City, Newark, Boston, Detroit, Washington, D.C., and San Francisco.