Nonprofits Still Taking Hit From Recession

In the wake of recession, non profit organizations continue to struggle.

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Nonprofit groups continue to suffer in the wake of one of the nation’s worst economic downturns, according to GuideStar USA Inc.’s survey of public charity and private foundations.

GuideStar, which provides data on more than 1.8 million IRS-recognized nonprofits, conducted the survey online in June. “The Effect of the Economy on the Nonprofit Sector: A June 2010 Survey” elicited responses from about 7,000 organizations, 5 percent of which were animal-related.

Overall, about 40 percent of the respondents reported a further decline in contributions in the first five months of 2010 compared to the year-ago period. At the same time, 63 percent saw an increase in demand for their services.

"Our survey echoes what we’ve been hearing from the nonprofit sector for the past couple of years,” said Chuck McLean, GuideStar’s vice president for research. “The results prove that nonprofits have a long way to go to achieve the success they experienced before the recession.”

Among the survey's findings:

• 8 percent of respondents indicated that their organizations were in imminent danger of closing.

• In order to balance budgets, 17 percent of respondents reduced program services and 11 percent laid off employees.

• More than 60 percent of participants that reported decreased contributions attributed the drop to a decline in the number of individual donors and the size of their donations.

• Among organizations that have volunteers, 17 percent used one or more in what had formerly been paid positions.

• 32 percent of organizations increased their reliance on volunteers, whereas 9 percent experienced a decline.

“There’s no doubt that the nonprofit sector continues to face an incredibly difficult philanthropic environment,” said Bob Ottenhoff, GuideStar’s president and CEO. “It’s more important than ever that nonprofits are transparent about their earnings and offerings so that donors and grant makers will know that their dollars are going to organizations that will use their gifts wisely.”

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