Economic Damage to Nonprofits Clear, New Report Shows

(Washington, DC) At the National Council of Nonprofits, the most frequent question from journalists since last year has been "How is the economy affecting nonprofits?" The National Council's just-released eighth Special Report on the Economic Stimulus & Recovery reveals the unambiguous answer.

"Our report examines data from four national and nine state-specific surveys that show the undeniable truth: nonprofits are trying to meet increasing demands for more services at the same time that their operating costs escalate and their revenues decline," said Tim Delaney, President & CEO of the National Council of Nonprofits.

For the last year, nonprofits have described this dangerous misalignment of increasing needs and decreasing resources by sharing anecdotes about their struggles and pointing to separate studies. But anecdotes and individual studies often get dismissed as outliers. So presenting these studies together in one package, Delaney explains, "documents the facts in a way that can no longer get overlooked or ignored: the economic threats to nonprofits and the communities we serve are real and dire. It is both unrealistic and unsafe to those depending on services to simply assume that nonprofits will somehow be able to continue to deliver more services that cost more with declining revenues. The math just doesn't work."

Recognizing that government and nonprofits serve the same constituencies, the report's title tells the central story: "A Respectful Warning Call to Our Partners in Government: The Economic Crisis Is Unraveling the Social Safety Net Faster Than Most Realize." The report explicitly notes that it "is not a plea for a handout" from government because nonprofits recognize that "government officials face their own budget shortfalls." Rather, the report urges government officials and nonprofit leaders to work together more purposefully to meet increasing community needs. The report concludes with a sampling of ways that government officials can work with nonprofits to serve their communities together.

The strength of the report flows from the respected quality of the four groups that conducted the national surveys (The Bridgespan Group, Guidestar, the Johns Hopkins University Listening Post Project, and Nonprofit Finance Fund), the consistency of their overarching findings, and the alignment of the findings to those documented in research conducted by state nonprofit associations in nine geographically dispersed and diverse states. That more than a dozen independently conducted surveys agree on the increasing demands for services, escalating costs, and declining revenues merits serious attention.

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The National Council of Nonprofits is the network of state and regional nonprofit associations linking more than 20,000 member organizations across the nation. By bringing local nonprofit organizations together through state associations, the National Council helps small and midsize nonprofits manage and lead more effectively, collaborate and exchange solutions, engage in critical policy issues affecting the sector, and achieve greater impact in their communities.