Monday, December 14, 2009

Daunting for Nonprofit Enterprises

According to a recent survey by The Chronicle of Philanthropy, the nonprofit world is about to face the toughest year in its history. By every measure, the trade publication says, 2010 could be the most painful year charities have known.

The Chronicle of Philanthropy's annual ranking of the 400 nonprofits that raise the most money found that, by year's end, these groups expect a median decline of 9 percent in donations, meaning half will see giving drop even more starkly.

“At the same time, need is growing fast — some 49 million Americans now don't get adequate nutrition every day which is an increase of 13 million over last year,” the paper says. “And the demands from the nation's most-vulnerable residents fall not just on emergency food and shelter groups, but on other organizations, such as health clinics that must serve the uninsured and colleges overwhelmed by demands for student aid.”

Meantime, the survey says, nonprofit organizations have had to lay off thousands of employees this year, even at places like Stanford University, where jobs once seemed protected forever. Meanwhile, workers at organizations around the country are taking pay cuts and cuts in retirement pay and health benefits. “Some groups told Congress this fall that their very survival was on the line as they sought to meet federal pension rules and keep their organizations afloat,” the Chronicle says.

Here’s what the Chronicle says are 10 trends that will shape how nonprofits – including a wide range of social enterprises – will fare in 2010

1. Governments in Crisis – “Nonprofits that rely heavily on government grants and contracts will find little relief in 2010 as the recession continues to take a bite out of tax revenues,” the Chronicle says. More than 40 states have reduced spending on services, including health care, education and help for the elderly and disabled.

2. Strains in the Safety Net – “While the economy is improving, the recovery from the recession is expected to be long and difficult,” the Chronicle says. “Nonprofits can anticipate a continued surge in requests for food, housing, and many other social services as recovery from the recession is expected to be long and difficult.”

3. Modest gifts – As nonprofits face cutbacks in state aid, as well as in grants from foundations and corporations, they are turning more intently to individuals and focusing more seriously on small and medium-sized donations.

4. Lower grants -- Hit hard by investment losses, many of the nation’s largest foundations and corporations will probably trim their giving next year or keep it steady at 2009 levels.

5. Weakened charity workforce – “Many nonprofit employees will enter the new year under conditions ripe for burnout,” the Chronicle says, as 2009 was marked by layoffs, salary freezes and other cutbacks in pay and benefits. “Employees who have retained their jobs will take on expanded workloads with no additional compensation.”

6. Cuts in nonprofit salaries

7. Rising donor-nonprofit tensions

8. Rising demand for ROI for each donor dollar spent

9. Volunteerism becomes cool – More people will donate their time to nonprofits as fewer are able to donate cash.

10. Online revolution slows: Nonprofits will continue to strain to figure out how to raise money using new social networks.

What are your predictions for the nonprofit landscape in 2010?

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