This week, Nonprofit Finance Fund (NFF) released the results of its 2012 State of the Nonprofit Sector survey. More than 4,500 respondents at nonprofits across the country shared the details of how they are adapting their organizations and finances to current economic conditions. Survey results reveal that while 2011 was a year of significant organizational and programmatic changes, many nonprofits are still facing fundamental challenges that threaten the stability of the sector and the well-being of the people they serve.
The Community Foundation has worked extensively with Nonprofit Finance Fund in recent years to learn how we can understand and address the financial concerns and health of nonprofits. We stay committed to working collaboratively to ensure the nonprofit sector remains strong, vibrant and equipped to handle these current challenges, as well as new opportunities before us.
2012 State of the Nonprofit Sector
- 85% of nonprofits experienced an increase in the demand for services in 2011; higher than previous surveys (2010, 2009, 2008)
- 88% expect an increase in demand for services in 2012.
- 57% have three months or less cash-on-hand.
- 87% said their financial outlook won’t get any better in 2012.
“Nonprofits are adapting to continued economic pressure in all sorts of creative and substantive ways, but for many, these are stopgap measures that 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,” said Antony Bugg-Levine, CEO of Nonprofit Finance Fund. “We must rethink the way we fund solutions to our most pressing social problems.”
Responses from human service organizations, which form the backbone of our social safety net, reveal that reductions and delays in government funding are of paramount concern and threaten services to vulnerable populations:
- 58% of human service organizations were unable to meet demand in 2011.
- 60% won’t be able to meet 2012 demand.
- 56% of human services respondents received federal government funding or contracts; 69% receive state or local funding.
- 52% reported late payments from the federal government; 62% said state or local government payments were late.
- 65% or more of human service nonprofits receiving late federal, state or local government payments used reserves to cover the gap.
There were bright spots as nonprofits dug deep to serve constituents and maintain employment:
- 55% of survey respondents added or expanded programs or services.
- 52% increased the number of people served.
- 50% hired for new positions.
- While 23% of respondents cut staff in 2011, just 10% expect to do so in 2012.
“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, which provides support for the survey. “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.”
This year’s survey underlined the need for a more open conversation among funders, boards, and nonprofits:
- Just 1 out of 5 nonprofits feels comfortable talking with their funders about cash flow concerns.
- Only 6% feel comfortable talking with funders about debt.
- 73% say their boards don’t do enough to leverage their relationships to support fundraising.
- 38% report that their boards aren’t able to sufficiently understand and communicate their expense drivers.
“Year after year, our survey finds nonprofits, and many of the people they serve, in dire straits,” said Bugg-Levine. “Many people believe the 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. Government, funders, boards, and nonprofits need to work more collaboratively to ensure that crucial services can be delivered and secure a true economic recovery. ”
Full survey results are available at: http://nonprofitfinancefund.org/2012Survey
NEW interactive NFF Survey Analyzer is available athttp://survey.nonprofitfinancefund.org.