Nonprofit Services Center

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

Results of AB624: Funding Communities of Color in California

A Sacramento Bee article on June 24, Pressed by legislator, nonprofit foundations agree to invest in minority-led organizations, stated that Assemblyman Joe Coto's (D-San Jose) proposed legislation AB 624 has led ten major California foundations to agree to commit to increased grantmaking and investment in minority communities. As a result to this agreement, Coto has dropped his legislation which would have required foundations with more than $250 million in assets to publicly disclose the number of grants and dollars awarded to minority organizations and the ethnic, racial, and gender composition of their boards and staffs. This issue came about from the Greenlining Institute's 2006 research that found "only 3.6 percent of grant dollars from the nation's top 24 private foundations went to minority-led organizations."

Does this government involvement help or hurt the nonprofit sector in California?  Some readers of the article have commented that this is "another example of extortion," and that the "government is getting out of hand."  However, others have expressed that this "public benefit tax-exempt status can build capacity for [their] community based organizations that mirror California."

In reaction to a post by Rick Cohen in The Cohen Report, Negotiating Diversity in Foundation-land and What it Means for the Rest of Us readers have commented that it is "pretty sad that it took a scare like that to actually force these foundations [to work on] diversity and inclusion."   

Will this cause foundations to look within and change the ethnic composition of their staff and board?  Will it cause added racial tensions or start tensions in an area where there weren't any to begin with? 

Could this be the beginning of a "trend" in legislation in other states? If its any indication there was a comment by the Florida Minority Community Reinvestment Coalition to their listserv on the topic of AB 624 stating, "Question To Florida Legislature: What about Florida Minority Organizations?” 

So, what do you think?  So many questions.  I'm sure that they will continue to be asked as the conversation continues.

Photo provided by Sarah Solie through Flickr