Financial safety net for nonprofits is unraveling, survey finds

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Financial health of nonprofit groups nationwide is deteriorating rapidly, says investigation of some 900 leaders of nonprofit organizations across the country.

According to the survey of the Nonprofit Finance Fund, a charity that provides loans and services to nonprofit groups.

Almost a third said they did not have enough money on hand to cover more than a month of expenses, while about another third said they only had enough money for the three following months.

“It is very clear how weak many of these organizations are financially, and especially those that are on the front lines, the safety net or the vital organizations,” said Clara Miller, managing director of the fund.

More than half of those polled said they would like help in communicating their financial difficulties to their boards and donors, highlighting the growing belief in the nonprofit world that the government and the public do not understand the role it plays in American society.

“We don’t tell our financial story well,” Ms. Miller said.

The survey echoes other recent reports on the woes of the nonprofit sector, and Ms Miller said she hoped to use the data to advocate for new principles and operating practices for nonprofit groups. lucrative that would allow them to have a better financial base.

Connie Karasow is Executive Director of Freedom Inc., based in Bensalem, Pa., Which provides housing and other services for women with mental health and addiction issues and their children. Ms Karasow said Libertae was financially strong “for now”, thanks to money still owed from public sources and two unusual and large donations from the Robert Wood Johnson Foundation and GlaxoSmithKline.

“It’s not a new story that nonprofits like us are struggling,” Ms. Karasow said. “It’s because we’re reaching a critical mass of financial problems now.”

Libertae, which has a budget of $ 2 million, has no reserves, she said, and demand for her services is growing rapidly.

“Our women used to earn $ 8.75 an hour, but now that the jobs are tighter, they are finding that their pay has dropped from around $ 1, to $ 7.75, at all costs,” Ms. Karasow said. . “There is no such thing as affordable housing, let alone affordable child care. Who else can they turn to?

Patrick Héron, Managing Director of Catholic social services of Wayne Country, Michigan, which serves Detroit, said demand for his organization’s services had increased 15 to 20 percent, including calls for help from former donors.

“In a lot of cases, their homes are foreclosed, and that’s not something we can help them with,” Mr. Heron said. “People aren’t always happy to hear that.

In the year ending June 30, Catholic Social Services will receive approximately $ 750,000 from the local Centraide. The year before, he received $ 1.2 million. The organization has laid off employees, reduced services and is trying to sell one of its branches to make up for lost income from other sources. He also discusses sharing back office operations with other nonprofit groups.

While many nonprofit groups said they had difficulty obtaining lines of credit from banks, only a quarter of survey respondents said the recession had made it more difficult to obtain such financing. .

“We were also surprised by this,” Ms. Miller said. “The answers to this question do not match what we see on the ground, although the rest of the results do.”


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