How well the economy is recovering from the “great recession” is debatable. And in spite of an increase in charitable giving in 2013, two recent surveys paint a troubling picture for the nonprofit sector. The 2014 State of the Nonprofit Sector Survey*, involving more than 5,000 nonprofits, revealed the following:
- 80% experienced an increase in demand for services in 2013 -for the sixth straight year.
- 56% were unable to meet demands in 2013.
- 55% had three months or less cash on hand.
- 41% said achieving long-term financial stability is a top challenge.
On the positive side, organizations responded to the continuing stress in several ways:
- 49% collaborated with another organization to improve or increase services.
- 48% invested money or time in professional development.
- 40% improved efficiency by upgrading hardware or software.
Many organizations rely heavily on the government to pay for the services they provide. A recent study by The Urban Institute** examined trends in government contracts. According to that study:
- 54% said payments do not cover the full cost of contracted services.
- 72% said application and reporting processes are too complicated.
- 44% reported that agencies change their contracts midway through the contract period.
- 45% complained of late payments.
The study went on to show that funding cuts caused 38% of the organizations to end 2012 with a deficit. As a result, over half of them froze or reduced employees’ salaries, and 42% dipped into their financial reserves. Surprisingly, only 11% reduced services or programs.
Can We Help?
Our firm offers a broad range of audit, tax information, return preparation, and executive board consulting services to nonprofit organizations. If we can be of service to you, please call.
For more information, please contact Kathleen Flaherty or Charles Deppe .
* Conducted by the Nonprofit Finance Fund
** The National Study of Nonprofit-Government Contracts and Grants 2013: State Profiles, April 2014, The Urban Institute