US NFPs Still Challenged by Economic Conditions - Report

Many Not for Profits in the United States are still facing challenges that threaten the stability of the sector and the well-being of the people they serve, a new study has found.

The Nonprofit Finance Fund (NFF) surveyed more than 4,500 employees at Not for Profit organisations across the U.S. about how they are adapting their organisations and finances to current economic conditions.

The survey, which the NFF says was supported by the Bank of America Charitable Foundation, reveals that 85 per cent of Not for Profits experienced an increase in demand for services in 2011.

“Over the past 3 years, the length of stays at our shelter has increased from 11 to 27 to 33 nights, because of a lack of affordable housing,” said Sarah Lange, director of Fund Development and External Relations for Abby’s House, which provides shelter, housing and advocacy to homeless women and children across central Massachusetts.

“We are scrambling to come up with creative solutions to shelter women for whom we have no room. Economic recovery is still not a reality here.”

The survey also revealed that 88 per cent of Not for Profits expect an increase in demand for services in 2012, while 87 per cent said that their financial outlook will not improve in 2012.

Nonprofit Finance Fund chief executive Antony Bugg-Levine said that American Not for Profits are adapting to continued economic pressure in many creative and substantive ways.

“For many, these are stopgap measures won’t make up for the bigger forces at play: decreasing government support, the unwillingness of some private foundations to evolve funding practices, and a lack of necessary support from some boards,” Bugg-Levine said.

“We must rethink the way we fund solutions to our most pressing social problems.”

However the results weren’t all bleak. The survey also revealed that many Not for Profits found ways to serve the most vulnerable and maintain employment levels in the sector.

Some results included:

55% of survey respondents added or expanded programs or services.
52% increased the number of people served.
50% hired for new positions.

Meanwhile, only 10 per cent of Not for Profits expect to cut staff in 2012, down 13 per cent from 2011.

“Nonprofits are an engine of the economy – providing critical services to people in need and providing employment to millions of Americans,” said Kerry Sullivan, President of the Bank of America Charitable Foundation.

“The changing funding landscape requires greater collaboration between government, private foundations and nonprofits in order to ensure that critical services remain in place and that the nonprofit sector remains a vibrant contributor to our country’s economic health.”

NFF said that this year’s survey underlined the need for a more open conversation among funders, boards, and Not for Profits with just 1 out of 5 NFPs comfortable talking with their funders about cash flow concerns and a large 73 per cent stating their boards don’t do enough to leverage their relationships to support fundraising.

“Year after year, our survey finds nonprofits, and many of the people they serve, in dire straits,” Bugg-Levine said.

“Many people believe the [economic] crisis is over, but our social safety net is still in peril.

“Nonprofits dipped into reserves last year to tide themselves over but expect 2012 to be even worse. Governments, funders, boards, and nonprofits need to work more collaboratively to ensure that crucial services can be delivered and secure a true economic recovery. ”