On July 22, I joined Brad Smith, president of the Foundation Center, on a teleconference to talk about the future of the nonprofit sector. It was the first time GuideStar and the Foundation Center have collaborated on such an event and only one of a few things our organizations have ever done together. It was great fun, and I really enjoyed working with Brad and his staff. After many years working for foundations, Brad brought interesting insight into the world of how foundations think and work. After such a great start, we are pursuing other activities to do together.
With moderator Katherina Rosqueta, founding executive director of the Center for High Impact Philanthropy at the University Pennsylvania’s School of Social Policy & Practice, ably guiding the conversation, Brad and I discussed the impact the economy is having on the sector and what we believe it means for the future. I presented the results of our latest nonprofit economy survey, which covered March through May of this year. Some 52 percent of participants said contributions to their organizations had decreased compared to the same period last year, 58 percent reported that demand for their organizations’ services had increased, and only 36 percent said that they had adjusted their 2009 budgets in response to the recession.
I was surprised by how similar these results were to the findings from our previous survey, which covered October 2008 through February 2009. In particular, I expected more organizations to have altered their budgets after several months of reduced income.
I see changes coming in the near future as the year unfolds. I suspect many nonprofits are living off reserves, which they can’t do forever, or making only minor adjustments to their current budgets, hoping things will improve soon. I also believe that different types of nonprofits are feeling the recession’s impact in varying degrees. Some subsectors and some regions of the country are being hit harder than others. Still, I believe that overall, the sector’s going to have to come up with new ways to cope with fewer resources and greater demand. Outsourcing, more meaningful collaborations, pooling resources, and bartering are just some of the options we need to consider. In the end, I think that our individual organizations and the sector as a whole will be stronger because of these efforts.
We’ve posted a recording of the teleconference on our site. I invite you to listen, and I welcome your comments.