Thursday, March 25, 2010

Has the Recession Harmed Philanthropies?

This was just released in March 2010 - A recent report on the 2010 State of the Nonprofit Sector said that 18 percent of the more than 1,300 nonprofit leaders surveyed expect their organizations to end 2010 in the black. In 2009, 35 percent of organizations ended the year with an operating surplus. But, 12 percent have no cash and 61 percent of those surveyed said they have less than three months of cash available. (Source: The Foundation Center.)

Basically this means is that the field of philanthropy will become more strategic as a result of the world’s economic crisis.

About 80 percent of these nonprofits expect to see an increase in demand for their services in 2010. On the other hand, only 49 percent expect to be able to fully meet that demand.

Many charity organizations are taking steps to maintain, and expand during these recessionary times. 52 percent stated they have collaborated with other organizations to provide programs; 43 percent have expanded their offerings; 18 percent have expanded the geographic area served by their programs. A big 60 percent said that they have become more involved with their board.

Overall, the impact of the economic situation on foundations is as follows:
1) There is a clear expectation among grant makers that the field of philanthropy will become more strategic as a result of having weathered the economic crisis. 2) The long-term impact of the crisis on their own foundations are forcing engaging in “more robust strategic planning,” “more focused use of the foundation’s capabilities,” and being “more focused and disciplined in executing our strategy.”

There have been declines in overall consumer demand and our country’s highest unemployment figures in a quarter century, so it is no surprise that the future outlook for the nonprofit community has been impacted by the recession.

One charity thatI work closely with and sit on their Board, is known as Children of the City in Sunset Park near Brooklyn, New York, however, is not suffering at all since the recession. It is growing.

-- Rocco Basile

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