Nonprofit Organizations Under the Microscope

What are not-for-profit organizations doing – or not doing – in the face of declining revenues, growing governance and disclosure expectations, and closer scrutiny from regulators and donors? Each year since 2003, Grant Thornton’s National Board Governance Survey for Not-for-Profit Organizations has examined the governance of not-for-profit organizations in order to learn how they are handling these increased demands.

According to the 2009 survey, the vast majority of organizations have responded to these challenges by cutting costs, seeking new revenue streams, reducing endowment spending, enhancing their governance practices and reassessing their strategic plans. For example:

  • Nearly nine in 10 (87%) respondents reduced expenses, while more than half (54%) reduced personnel.
  • Boards made a number of governance changes in 2009, adopting or updating their policies relating to investment (39% of boards), record retention (32%) and whistleblowing (26%).
  • A volatile market and staggering losses for a number of organizations led nearly six in 10 (58%) to rebalance their investment portfolios.
  • Nearly three-quarters (73%) of respondent organizations now have formal policies in place to review executive compensation.

The complete 2009 National Board Governance Survey for Not-for-Profit Organizations is available for download on the Grant Thornton Website.