Nonprofits strained to breaking point by recession

America’s nonprofits, including the safety-net or “lifeline” organizations that many depend on for food, shelter and other basic services, are being strained to the breaking point by the recession, according to a new survey of 986 nonprofit leaders from across the county conducted by the Nonprofit Finance Fund (www.nonprofitfinancefund.org).

According to the Philanthropy Journal article, A large number of respondents expect decreases in government funding (43 percent), foundation support (62 percent) and individual contributions (49 percent) this year.  Only 12 percent expect their organizations to operate at or above break-even, while 16 percent anticipate being able to cover their operating expenses in both 2009 and 2010. Some 31 percent of respondents said their organizations don’t have enough operating  cash on hand to cover more than a month of expenses, while another 31 percent said they have less than three months’ worth of cash on hand. Compounding the problem, 93 percent of safety-net organizations said they anticipate increased demand for their services in 2009.

The survey also found that 52 percent of respondents expect the recession to have a long-term (two or more years) or permanent negative financial effect on their organizations. Actions taken by respondents within the past 12 months or planned for the next 12 months in response to the downturn include reducing or eliminating programs (39 percent), reducing staff or salaries (41 percent) and delaying payments to vendors (23 percent). However, many nonprofit leaders expressed interest in exploring new methods to manage through the crisis and beyond, with 58 percent of respondents saying they are engaging in scenario planning and 34 percent devoting resources to analyzing the profitability of their programs.

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