nonprofit finance fund 2011 state of the sector survey: national summary

8/7/2019 Nonprofit Finance Fund 2011 State of the Sector Survey: National Summary

1/29

nonprofitfinancefund.org 2011 Nonprofit Finance Fund

Nonprofit Finance Fund

2011 State of the Nonprofit SectorSurvey Results

March 2011

For more information, please contact Jen Talansky or Anjali Deshmukhat 212.868.6710 or visit nonprofitfinancefund.org

For full survey results, please visithttp://nonprofitfinancefund.org/2011Survey

Data is based on a nationwide Zoomerang survey of nonprofit leaders conductedby Nonprofit Finance Fund, January-February 2011.

Generously supported by Bank of America Charitable Foundation


2/29

1nonprofitfinancefund.org 2011 Nonprofit Finance Fund


Adjusting to a New Normal

Nonprofit Finance Fund (NFF) recently conducted its third State of theSector nonprofit survey. The survey focused on the intersectionbetween finance and mission: what financial strategies are nonprofitsemploying to keep up with ever-climbing demand for services?

We asked nonprofit managers nationwide to assess the currentfinancial challenges they face, and to share the coping and adapting

strategies theyre using to manage through these times.

1935 nonprofit leaders responded to our survey. Respondentsstretched from coast to coast, representing 48 states. They came fromlarge organizations and small, and from all sub-sectors.

What did we learn from their collective reply?

While there are some signs of hope, many nonprofits arestraining under year-after-year increases in service demand.As an ever-resourceful sector, they are creatively respondingto these conditions.


3/29



Contents

Meeting the Survey Respondents

Examining the Financial Situation

Taking Action

Working with Government and Funders

Taking a Look at Lifeline Organizations

Conclusion

2


4/29


What Areas of Need Do SurveyRespondents Address?

Human Services organizations represent overone-third of respondents

rganizational Sectors

9%

4%

4%

9%

35%

9%

7%

%

%

%

rt , Culture, and Hu anitie

Education

En iron ent and

ni al

Healt

Hou e of or ip

Hu

an

er

ice

International, Foreign

ffair

utual/ e er ip Benefit

Pu lic, ocietal Benefit

Ot er, plea e pecif


5/29


What Are the Annual Expense Sizesof Respondents?

ost respondents fro s all- to id-sized nonprofits

7%

3%

33%

6%

9%

5%6%

$0-2 0,000

$2 0,001- 00,000

$ 00,001-2,000,000

$2,000,001- ,000,000

$ ,000,001-10,000,000

$10,000,001-20,000,000

greater t an $20,000,000


6/29



Contents



Taking Action



Conclusion


7/29


What Levels of Service Demand HaveNonprofits Experienced?

Service demand has climbed over the last years, witheach years increase coming on top of the prior years

! " #

$

$

%

& " #

7

0%

'%

10%

1'%

20%

2(%

) 0%

) '

%

0

0%

0 '%

a1ignificant increa

1e in

de2

and for1

er3

ice1

a1 4

ig5t increa

1e in

de2

and for1

er3

ice1

no c5ange in de

2and for

1

er3

ice1

a decrea1e in de

2and for

1

er3

ice1

2006

2007

2010


8/29


Are Nonprofits Able to Keep Up with theIncreases in Demand?

We see a growing trend of organizations struggling tomeet demand

8

9

@

9

A @

B

C D

E F D

9 9

@

8 A @

0G

10 H

20G

I 0 H

P 0 G

Q0

G

R 0 H

NoYeS

Able to full meet demand for ser ices?

2011 T xpected

2010

200 U


9/29


What Are Organizations OperatingResults?

More organizations reported a surplus in 2010compared to 200 . of respondents ended 2010with a surplus vs. in 200 .

Respondents' Operating Results

V2

W

V

X

W

V

Y

W

2X

W

Y

0W

V ` W

Y Y

W

V0

W

28W

2 a W

22W

Y Y

W

0 b

c b

10 b

1 c b

20 b

2 c b

d 0 b

d c b

e 0 b

e c b

c 0 b

2008 200f

2010 2011g h

p

an operating deficit

an operating i urplu i

p rea q -e r en financ ial re i ult i


10/29


How Many Months ofCash DoOrganizations Have Set Aside?

For therd

year in a row, 0 of organizations have0 days or less of cash on hand

s4

t

u 7 v

w u v

u

x

v

s

y

t

s t

s

t

w u v

u

x

v

0 v

u 0 v

s

t

t

u v

u

x

v

0 10 1 20 2 0

None

Enough to co er 1 month of

e penses

Enough to co er 2 months

of e penses

Enough to co er months

of e penses

Enough to co er more than months of e penses

Months of cash

2009

2010

2011


11/29


The Recession Is Officially Over. Does It FeelLike It Has Ended for your Organization?

8

0 20 40 60 80 100

No

e

Does it feel like the recession has ended?


12/29

11nonprofitfinancefund.org 2011 Nonprofit Finance Fundnonprofitfinancefund.org 2011 Nonprofit Finance Fund

Contents



Taking Action



Conclusion

11


13/29


What Personnel-Related Actions Did NPOs Takein 2010; What Actions Are Planned for 2011?

There were signs of personnel-related growth in 2010

0% % 10% 1 % 20% 2 % 0% % 0% % 0%

None of t e a o j e

Freeke a

l lrep

lace

ment

ires

n o

pro

e or increase staff

enefits

educe staff ours

educe staff

enefits

educe staff

Freeke or reduce sa

laries

etain a

current personne

e l m ore on j o l unteers

Gi

e raises

ire staff for ne positions

a e rep l ace m ent ires

Personnel: actions taken vs actions planned

z

a{en in 2010

| }anned for 2011


14/29


What 2010 Financial Management Actions DidNPOs Take; What Actions Are Planned for 2011?

Nonprofits are taking a range of actions to manage theirfinancial situation

0% 10% 20% 30%~0%

0%

0%

0%

None of t e abo e

erge

it

anot

er organization

e assets suc as a bui ding or securities

cquire ne assets suc as a bui ding or securities

pand

our space

o aborate it anot er organization on e penses

educe occupanc costs

e

a

pa

ents to

endors

peed up t e co ection of recei ab es

dd to reser e funds

ncrease annua e penses

o d funder con ersations to e p ain our situation

aise ess tota re enue t an anticipated

Use reser e funds

aise ore tota re enue t an anticipated

e

e

op

aintain '

orst

case' contingenc

budget

educe annua

e

penses

ngage

ore c

ose

it

our board

a endors on ti e

Financial management: actions taken s planned

a en in 2010 anned for 2011


15/29


What Service-Related Actions Did NPOs Takein 2010; What Actions Are Planned for 2011?

In spite of financial difficulties, many NPOs areproviding more service

0% 10% 20% 30% 40% 50% 60%

None of the abo e

educe or ignificant re tructure geographie er ed

ecrea e a ount of er ice per c ient

ecrea

e the nu

ber of c

ient

er ed

ncrea e a ount of er ice per c ient

E pand geographie er ed

educe or e i inate progra or er ice

artner with other N

to i

pro

e

increae

er

ice

ncrea e the nu ber of c ient er ed

dd or e pand progra or er ice

Service-related actions taken vs actions planned

a en in 2010 anned for 2011


16/29


Contents



Taking Action



Conclusion

1


17/29


What Are Nonprofits Experiences withFederal Funding?

Yes

No

o

eti

es

Federal go

ern

ent pa

s for full cost of ser

ices?

0% 10% 20% 0% 0% 0% 60%

ead of c edu e

Onc

edu

e

1

0 day

ate

1

0 day

ate

0+ day ate

When do

ou recei

e pa

ent fro the federal go

t?


18/29


What Are Nonprofits Experiences withState and Local Government Funding?

es

No

Sometimes

State/local govt pa

for full cost of services?

5

0

10

20

0

0

ead of

c

edu

e

n

c

edu

e

1

0 da

ate

1 0 da ate

0

da

ate

When do ou receive state/local govt pa ment?


19/29


Which Financial Topics Do NPOs FeelComfortable Discussing with Funders?

At , program expansion easily tops the list

2

2

21

1

2

0 10 20 30 40 50 60 70

rogra e pan ion

Faci it need

or

ing capita

need

a f ow concern

perating re

er

!e

" ui ding re er# e

$

ebt burden

% don & t fee ' funder are wi ing to

(a

#e open dia

ogue on t

(e

e topic


20/29


What Do Nonprofits Feel Funders Can Do toBetter Help their Nonprofits?

If I could ask funders to do one thing differently to be mosthelpful to my organization, it would be ______*

) 0

) 0

1 2

4 2

4 2

5 2

3

2

4

0

5 5 2

5 5 2

5 3 2

5 6 2

07

107

207

307

407

507

607

gi 8 e capita 9 for faci 9 itie @ & A ig proB

ect @

@upport & engage in co

9 9a

Aoration

paC

fu9 9

co@t of

@er

8ice

@

D e open to c E ange

giFe more mone

G

con@ ider ca @ H f9 o I concern @

ma P e t H e grant proce @ @ ea @ ier Q c H eaper

ot H er

pro 8 ide 9 onger term @ upport

fund R E at a S read G R or T U

Si

Uten

V

Searn

Vcommunicate

gi8e

W X Yor capacit

Cmone

C

*The themes Fund small nonprofits, provide or help us manage loans, and support theartseach represent 1% of the responses


21/29


What Types of Technical AssistanceWould Be Helpful?

` a b

c

d

e

c f e

c g e

h c e

h

i

e

g

p

e

g f e

a q b

r

b

s b

0t

10t

20t u

0t v

0t w

0t x

0t y

0t

Fundrai ing a i tance

oo to co unicate financia to oard funder

Organizationaperfor

ance

ea

ure

ent

upport

Financia cenario p anning

rogra finance ana tic

i

tance ana

zing

our current financia

ituation

or ing capita

ine of credit

o

a

oration or

erger fea

i

i

it

ana

i

i

tance negotiating

it

an

ot

er

ender

e

t re

tructuring and

or financing

Oter

Helpful technical assistance o capital access se vices


22/29


Contents



Taking Action



Conclusion

21


23/29


How Many Respondents PrimarilyProvide Essential Services?

Are you a "lifeline" organization?

j k

l 1 k

0m

10m

20m

30m

40m

50m

60m

nes

No


24/29


What Are the Trends Among TheseLifeline Organizations?

Lifeline organizations that provide critical services topeople in need are finding it hard to meet the demands intheir communities:

87 saw an increase in demand for services in 2010,compared with 68 of non-lifeline organizations.

60 of lifeline organizations increased the number ofclients served in 2010, yet only 43 were able to fullmeet the demand for services.

Just 37 of lifeline organizations expect be able to fullymeet demand in 2011.


25/29


Contents



Taking Action



Conclusion

2o


26/29


We learned to domore with littleand still maintainour budget

What Makes ou Proudest about how your NPOResponded to 2010 Financial Challenges?

We were able to keeppersonnel moves and budgetissues from affecting servicesto clients. We were veryproactive in reducing staffand overall expenses as wellas defining our core serviceofferings. This helped whenwe lost 85 of our funding in

ctober 2010...

We survived almost 4 monthswithout our major income sourcefrom the [local government] bylaying off 2/3 of the staff andoperating on minimal expenses.

ur laid off staff put in over 1000

hours of volunteer time duringthat period...

We reducedexpenses andended the F in theblack despite a verydifficult fundraisingyear. We "turnedthe corner" byengaging our boardin fundraising...

Im most proud of the way the staffhas come together, made hugesacrifices, increased their workload soas not to compromise our program

offerings - all the while, reducingexpenses while increasing revenues.Im proud of the staff's "We an DoIt" attitude. In addition to the budgetamendments, the organizationbecame debt-free.


27/29


Conclusions

Nonprofits face ongoing increases in service demand, whilethe financial situation for many continues to be difficult. alfthe respondents say they need funders to provide moreunrestricted or general operating support.

Nonprofits are responding to this new normal with creativity

and resilience, even finding ways to increase services in theface of funding uncertainty.

While some nonprofits are adapting to changed circumstancesin healthy ways, such as strategic collaborations and carefulexpense management, others are entering into situations that

threaten their survival, such as substantial layoffs or deficits.

Now more than ever, nonprofits need open dialogue withinternal and external stakeholders, and support for the overallorganization and core programs.


28/29


About Nonprofit Finance Fund

Where Money Meets Mission

Nationwide network of experts in nonprofit finance Served thousands of nonprofits funders since 1980

DFI with 235 million in loans and over 1.2 billion incapital leveraged for nonprofits

Financial consultant with over 1,000 customizedconsultancies/workshops

undreds of strategic partnerships to advance thesector

Debt, RI/MRI management, New Markets Tax redits

Assistance in structuring philanthropic equity forchange

Thought leadership to advance friendlier fundingpractices across the nonprofit sector

[NFF is]

arguably themostinfluentialvoice in theongoing effortto reshapethinking and

practice aboutnonprofitcapitalization.

-The NonProfitTimes


29/29


Nonprofit Finance Fund

Where Money Meets Mission

28

For the full survey results, please visit our website, nonprofitfinancefund.org,or click on this linkhttp nonprofitfinancefund.org 2011Survey

For questions related to the survey, please contactJen Talansky or Anjali Deshmukh at 212. . 10.

Thank you.

nonprofit finance fund 2011 state of the sector survey: national summary

Documents