But I want to foster discussion on Nonprofit Finance Fund’s 2014 State of the Nonprofit Sector Survey, the results of which it released on April 7. NFF is a community development financial institution.
Leaders from more than 5,000 organizations participated in the sixth annual survey. The big takeaway: Nonprofits were hit especially hard when the economy crashed, and recovery hasn’t been easy. In fact, many nonprofits are seeking new funding sources.
Perhaps even more startling is that while 80 percent of nonprofits reported an increase in demand for their services, only 56 percent could meet those needs in 2013. And only 11 percent of respondents thought 2014 would be easier.
“Americans rely on nonprofits for food shelter, education, health care and other necessities, and everyone has a stake in strengthening this social infrastructure,” said Antony Bugg-Levine, CEO of Nonprofit Finance Fund. “The struggles nonprofits face are not the short-term result of an economic cycle; they are the results of fundamental flaws in the way we finance social good.”
Much of that “social good” is financed by government grants. But nonprofits that receive such funding have experienced a sharp decline in financial support, which means they’re exploring other avenues for financial stability.
According to the survey, 31 percent of nonprofits will change the ways in which they raise and spend money this year. In addition, 26 percent will pursue an earned income venture while 20 percent will seek funding other than contracts and grants, such as loans or investments.
In the survey, 41 percent of nonprofits reported long-term financial stability as goal. But 55 percent of organizations have three months or less cash-on-hand and 28 percent ended their fiscal year with a deficit.
As a result, nearly half of the nonprofits reported collaborating with others to cut administrative costs. Other strategies: cutting funds and changing the business model. As another cost saving tool, organizations are relying more on volunteers.
The good news, though, is that 37 percent of organizations plan to hire additional staff and 51 percent plan to invest in professional development in 2014.
As you well know, nonprofits are crucial to communities, especially those that serve low-income communities. Take Meals on Wheels, for example. In June, Associations Now reported that 70 percent of senior nutrition programs, such as Meals on Wheels, have reduced the number of meals they deliver while 40 percent of the programs have scaled back delivery days. According to the Meals on Wheels Association of America, many senior nutrition programs receive federal funding through the Older Americans Act, which took a huge financial hit as a result of the sequestration.
In short: It seems 2014 will continue to be tough for nonprofits, but they’re coping as best they can.
I’d like to write more about this topic as 2014 unfolds. So tell me: Has your nonprofit been affected by the economy? What do you think of the survey findings?