Darn This Economic Downturn

Sluggish Economy.  Economic Downturn.  Harsh Economic Times.  Weak Economic Climate.  Uncertain Economy.  Any way you say it - it ain't pretty!

And, it is hitting all of us - individual, nonprofit, funder alike. 

We found in the study by the Center on Philanthropy at Indiana University that the majority reported the current economy is having a negative impact on their bottom line.    They also report that nonprofits are less optimistic about their current and future fundraising climates than they were just six to eight months ago. 

Let's go back in time a little further and its easy to see how the climate can change so quickly - and the importance of being prepared when it does...

NSC recently released a study completed through IFF, Missouri Nonprofits: Building Capacity in the 21st Century, that suggests Missouri nonprofits are adept at managing the constant challenges posed by uncertain and restricted income but are challenged to grow their programs without additional resources.  The same respondents said at the time of the survey that they perceived their organizations to be financially healthy.  Of course, this benchmark study was conducted in 2007 covering the years 2004 - 2006, prior to the current economic downturn.

So what now? Kim Klein in her book Fundraising in Times of Crisis suggests that although the news on the economic climate is not good she believes that it is possible to continue to raise money during these times.  To do so, she states "your fundraising must be built around two concepts - diversity and flexibility.  Beyond those you will need to pay more attention to your donors and develop a highly functioning fundraising team. One bright spot on the horizon? You will have an opportunity to hear from Kim Klein on November 11 either as a Nonprofit Board President at the Nonprofit President Breakfast Speaker Series or in an interactive workshop for nonprofit staff in the afternoon.

And, where it is usually comforting to hear that "you are not alone" this is one time where comfort is no where to be found because times are no different for corporate funders. In a June 30, 2008 blog post, Navigating An Economic Downturn, on the Cone, Inc. blogsite lists suggestions that came from a convening by the Northern California Grantmakers Association. They recently held a conference devoted to helping companies responsibly navigate their giving strategies during an economic downturn. Where the companies at the conference did not see a decrease in their giving at the time they did know it is coming soon.

Add to that, in a September 23, 2008 blog post by Rick Cohen in Nonprofit Quarterly, What the Financial Sector Meltdown Really Means for Nonprofits and Philanthropy, Cohen states "nonprofits should not look to philanthropy from commercial banks and investment firms to soften the blow of the ailing economy and the inevitable impact on the nonprofit sector."   

Your turn - Are you surviving the economic downturn? Where are you and your organization in this maze of financial dire-straights? Are you seeing more individuals/families accessing your programs? Are you keeping up with the demands of your budget vs. increased demands on your services? Where have you been going for help/ assistance/ information?   Here is your opportunity to sound off and express your concerns about our economic future. 

Photo: Downturn by boywonderky_2 on flickr.com

Comments

[Clarence Hauer]

Thank you for posting this thought-provoking article. Though the next period is going to be a difficult one for nonprofits, I believe it is also important to remember that times ahead can also provide opportunities for innovation in nonprofit practice. One such area that I would propose receive renewed focus is nonprofits developing greater interdependence particularly by sharing resources around the design, development and delivery of programs and services. The time of nonprofits being run like segregated entrepreneurial enterprises really needs to give way to a newer model of collaboration. In other words, there are but so many ways to slice an incredibly shrinking pie of available resources. Instead, nonprofits need to work together to determine the best ways of leveraging shared resources to accomplish the work that is so vital to the well-being of our communities.

[Deb Cottin]

I agree collaboration is the way to keep ourselves strong and get ahead. My nonprofit is big on noperating this way and pursuing grants collaboratively. It works!

[Byron Keelin]

I agree. These economic times are going to try men's souls.

This will be the time for organizations to reinvent themselves for the future. Be leaner and more effective in providing effective services and resources for their members and funders.

[Bev Pfeifer-Harms]

It's also a difficult time for funders, who are facing their own challenges with the impact of the market on asset value, but also know they will undoubtedly be seeing more requests from nonprofits for funds at the same time.