The State of the Sector survey results and my commentary

Nonprofits in the USA are being stretched, perhaps beyond their limits.  The Nonprofit Finance Fund released its State of the Sector survey results.  An overview of the findings (from http://nonprofitfinancefund.org/state-of-the-sector-surveys):

  • 85% of nonprofits experienced an increase in the demand for services in 2011.
  • This is on top of years of increased demand: previous NFF surveys found that 77% of      nonprofits experienced an increase in demand in 2010; 71% experienced an increase in 2009; and 73% experienced an increase in 2008.
  • 88% expect an increase in demand for services in 2012.
  • 57% have 3 months or less cash-on-hand.
  • 87% said their financial outlook won’t get any better in 2012.

I propose that this is not a matter confined to the realm of nonprofits.  This is a matter of concern to all of us, even those who haven’t donated a single penny anywhere and have no interest in volunteering.

This is a message to any of you who happen to fit into that above category, although it’s doubtful that you’d be reading this blog if you did.  Nevertheless, this needs to be said.

You’re going to have to pay for it somewhere.

If we don’t support the nonprofit organizations who are trying to smooth out those nasty rough edges like hunger, poverty, disease, etc. we’ll either have to fund bandaid solutions through our taxes, or tolerate living in a society of crime, hatred, and needless premature death.

Wow.  I’ve gone all dark.

But surely I’m not the only one who puzzles over the multitudes who simply don’t get it.  Where is the logic in thinking that a “blame the victim” mentality makes the problems go away?  Why do some of us think that as long as the problem belongs to “them,” “we” don’t have a problem?  Why do we see nonprofits as “nice to haves” rather than essential for the greater good?  Few people seem to like the alternatives – higher taxes or an even messier world.

And why do we hold the nonprofit sector, whose mission is to make the world a better place, more accountable than we’ve been holding the banking industry, whose mission is to make shareholders richer?  I’m not suggesting that the nonprofit sector not be held accountable.  But if we’re going to hold it up to intense scrutiny with demands of transparency and accountability, perhaps we should be prepared to fund the sector as lavishly as we’ve been funding the banking industry.

Granted, one might argue that there are simply too many nonprofits out there.  The National Center for Charitable Statistics estimates that there are over 1.5 million not-for-profit organizations in the U.S.  The law of supply and demand might indicate that duplication of services exist, the public doesn’t perceive a need for some non-profits, and that they are “voting” simply by not supporting them.  One might argue that the “lesser needed” non-profits should probably close up shop.  Fewer non-profits means each non-profit gets a greater share of the philanthropic pie.

While these might be valid arguments, the pervasiveness of the across-the-board struggle among the sector indicates something more systemic.  Not only does a broad swath of public misunderstand the non-profit sector and underestimate its necessity, but because of the economic downturn, people are focused on their own survival and lack any resources of time or money to spare.

The Fast Company has offered some advice for the nonprofit sector and its funders:

1. Funders must invest in organizational vitality and effectiveness.

2. Boards must take their roles seriously in advancing nonprofits.

The recommendations are offered in detail at http://www.fastcompany.com/1826938/nonprofit-finance-fund-state-of-the-sector-2012-a-system-under-pressure.  The article is well worth a read.

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