Report update: Economic outlook darkens for many nonprofits

There are signs that the economy is starting to affect nonprofits, according to a recent Philanthropy Journal article.

At the halfway mark for 2009, nonprofits find themselves in a tougher place this spring than last fall, according to a new report from Bridgespan. As of May, more than nine in 10 U.S. nonprofits said they were feeling the negative effects of the recession, up from three-fourths of nonprofits that indicated the same six months ago. About half say their financial standing worsened from November to May, and about seven in 10 report their funding was reduced this spring, compared with only about half that reported cuts last fall.

To address these issues, the share of nonprofits that were restructuring programs grew to 67 percent as of May from 59 percent in November, and the share with a defined contingency plan in place increased to 62 percent from 48 percent. About 41 percent of nonprofits in May had reduced staff, compared with 28 percent in November, and 23 percent had cut salaries by spring, up from 16 percent in the fall. As of May, a third had dipped into their reserve funds to make ends meet, compared with 19 percent that had as of November.

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