No Cash On Hand At 12% of Charities

One more problem facing nonprofits: no cash!

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America’s nonprofits expect that 2010 will be financially more difficult or as difficult as 2009, according to a survey, the results of which were released by Nonprofit Finance Fund (NFF). And, some of them don’t have enough cash on hand to get through a dry patch of more than 100 days.

The survey of more than 1,300 nonprofit leaders in markets nationwide also found strong evidence of the dramatic and creative steps that organizations are taking to maintain and even expand service delivery to meet increased demand during this time of continued economic uncertainty.

Key findings include:

•The majority (61%) has less than three months of cash available; 12% have none.

•Nearly 90% expect 2010 to be as difficult or more difficult than 2009; only 12% expect 2010 to be financially easier for their organizations.

•80% of nonprofits anticipate an increase in demand for services in 2010; less than half (49%) expect to be able to fully meet this demand level.

•Only 18% of organizations expect to end 2010 above break-even; 35% of organizations ended 2009 with an operating surplus.
“We expect 2010 to be another treacherous year for many nonprofits that routinely take heroic measures to meet demand for services,” said Clara Miller, president and CEO of the New York City-based NFF. “The economic ‘recovery’ has not yet reached people in need, or the organizations that serve them. We must do more to repair the tattered social safety net.”

For “lifeline” organizations that provide critical services to people in need:

•68% expect 2010 to be financially more difficult than 2009 for the people they serve.

•64% do not expect to be able to keep up with demand for lifeline services in 2010.

•56% expect 2010 to be financially more difficult than 2009 for their organizations.

•39% are planning to add or expand programs in 2010; 26% anticipate reducing programs.

“A tough economy is straining families and the child care programs they use,” said Pam Tatum, CEO of Quality Care for Children in Atlanta, Ga. “One approach we’ve taken is to assist families with child care fees. This ensures the child’s access to stable, quality care, and protects the fiscal health of quality childcare programs that would lose revenue with high vacancies. We can’t in good conscience allow quality child care to deteriorate, with so many children in need.”

Nonprofits are taking significant steps to ensure service delivery. During the past 12 months:

•52% have collaborated with another organization to provide programs.

•43% added or expanded programs.

•18% expanded geographies served.

•60% engaged more closely with their board through more reporting and increased communication.

•39% relied more on volunteers.

“Nonprofits aren’t rolling over in the face of economic strain,” said Miller. “The sector is filled with determined individuals and inspiring organizations focused on the most critical issues we face as a society. While the ‘coping mechanisms’ we’re seeing are encouraging, we also need to make fundamental changes to the way the sector is financed.”

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This article is from NPT Weekly, a publication of The NonProfit Times.

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It’s always good to see what steps other organizations are taking–it can perhaps provide a new idea to yours.

Using knowledge for success,

Dr. Rick Hoefer

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