America’s Nonprofits Brace for Tough 2010

America’s nonprofits expect that 2010 will be financially more difficult or as difficult as 2009, according to a survey released today by Nonprofit Finance Fund (NFF). 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 in order to maintain – and even expand – service delivery to meet increased demand during this time of continued economic uncertainty.

Key findings include:

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

” 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 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.

Nonprofits are taking significant steps to ensure service delivery. In 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.

Many nonprofits are facing year-over-year increases in demand and continually operate with little-to-no financial “buffer.” Findings from NFF’s 2009 survey, compared with this year’s results, paint a troubling picture:

• 73% of organizations experienced an increase in service demand in 2008.
• Then, in 2009, 71% experienced an increase in demand.
• On top of two years of increased demand, 80% now anticipate increased demand in 2010.
• It is getting harder for organizations to operate above break-even: 40% reported ending fiscal-year 2008 with a surplus; 35% reported ending fiscal-year 2009 with a surplus; only 18% are predicting a surplus in 2010.

You can visit the Annual Survey page for additional information.

About: Nonprofit Finance Fund connects money to mission success through consulting, innovation, and direct investment. Founded in 1980, NFF provides services that build the capacity and durability of nonprofits. A leading community development financial institution with over $80 million in assets, NFF has provided over $200 million in loans and access to additional financing via grants, tax credits and capital in support of over $1 billion in projects for nonprofit clients nationwide. NFF has offices in New York City, Philadelphia, Newark, Boston, Detroit, Washington, D.C., San Francisco and Los Angeles.