Northeast Ohio Nonprofits Brace for Tough 2010; Turn to Collaboration and Financial Planning

CLEVELAND, October 8, 2009 — Nonprofits in Northeast Ohio are facing decreased revenue and an increase in demand as they look toward 2010, according to a survey released today by Business Volunteers Unlimited (BVU) and Nonprofit Finance Fund (NFF). More than 100 respondents painted a grim financial picture of the sector, but also detailed extensive and promising collaboration efforts that outpace national counterparts.

Key findings include:

* Only 17 percent of respondents expect to be above break-even for the current fiscal year, down from 35 percent the prior fiscal year.
* Of the nonprofits that receive each type of funding, 67 percent expect a decrease in foundation revenues, 54 percent expect a decrease in government revenues, and 40 percent expect a decrease in gifts from individual and corporate donors.
* 80 percent of nonprofits predict an increase in demand for services for the remainder of 2009 and in 2010.
* Fewer than half of nonprofits that expect an increase in demand are planning to reduce programs.
* Nonprofits are responding aggressively to economic challenges in order to meet the needs of their constituents. They are taking action in myriad ways:
o 59 percent have collaborated with other organizations on programs and/or administration in the past 12 months.
o 51 percent have developed a "worst-case scenario" contingency budget.
o 56 percent have engaged more closely with their board.

"Northeast Ohio nonprofits are working together and getting creative in the face of significant financial challenges," said Ann Kent, Vice President, Services to Nonprofits of Business Volunteers Unlimited. "If there is a silver lining to the economic uncertainty, it is that organizations are going beyond survival mode to pursue fundamental improvements in strategy, finance, and service delivery."

In addition to steps that Northeast Ohio nonprofits have already taken, 55 percent of nonprofits expect to collaborate on programs in the next 12 months, 26 percent will collaborate to reduce administrative expenses, 55 percent are planning closer board engagement, and 50 percent plan to hold conversations with funders to discuss financial realities. Local interest in collaboration is high when compared to findings from Nonprofit Finance Fund's March 2009 survey of nonprofits nationwide, where 42 percent of respondents either had or were planning to collaborate on programs, and 13 percent had or were planning to partner to reduce administrative costs.