Nonprofit Finance Fund (NFF) has released the results of its 2012 State of the Nonprofit Sector survey. More than 4,500 respondents at nonprofits across the country shared the details of how they are adapting their organizations and finances to current economic conditions. The survey reveals that while 2011 was a year of significant organizational and programmatic changes, many nonprofits are still facing fundamental challenges that threaten the stability of the sector and the well-being of the people they serve.

• 85% of nonprofits experienced an increase in the demand for services in 2011.
• This is on top of years of increased demand: previous NFF surveys found that 77% of nonprofits experienced an increase in demand in 2010; 71% experienced an increase in 2009; and 73% experienced an increase in 2008.
• 88% expect an increase in demand for services in 2012.
• 57% have 3 months or less cash-on-hand.
• 87% said their financial outlook won’t get any better in 2012.

“Nonprofits are adapting to continued economic pressure in all sorts of creative and substantive ways, but for many, these are stopgap measures that won’t make up for the bigger forces at play: decreasing government support, the unwillingness of some private foundations to evolve funding practices, and a lack of necessary support from some boards,” said Antony Bugg-Levine, CEO of Nonprofit Finance Fund. “We must rethink the way we fund solutions to our most pressing social problems.”

Responses from human service organizations, which form the backbone of our social safety net, reveal that reductions and delays in government funding are of paramount concern and threaten services to vulnerable populations.

• 58% of human service organizations were unable to meet demand in 2011.
• 60% won’t be able to meet 2012 demand.

There were bright spots as nonprofits dug deep to serve constituents and maintain employment:

• 55% of survey respondents added or expanded programs or services.
• 52% increased the number of people served.
• 50% hired for new positions.
• While 23% of respondents cut staff in 2011, just 10% expect to do so in 2012.

This year’s survey underlined the need for a more open conversation among funders, boards, and nonprofits:

• Just 1 out of 5 nonprofits feels comfortable talking with their funders about cash flow concerns.
• Only 6% feel comfortable talking with funders about debt.
• 73% say their boards don’t do enough to leverage their relationships to support fundraising.
• 38% report that their boards aren’t able to sufficiently understand and communicate their expense drivers.

The complete survey results are available here.