Fiscal Stress of Nonprofits Measured in National Report

The Johns Hopkins Listening Post Project is monitoring in a systematic and timely way what is happening to nonprofit organizations in the Unites States. In a report released late last month, the majority of US nonprofits in the study report experiencing some level of fiscal stress. Except for arts organizations, the stress level of sizable majorities of organizations at present are “minimal” or “moderate”.

However, 40% of US nonprofits are reporting this stress is “severe” or “very severe”. Particularly hard hit are theaters and orchestras (half to three-quarters of them are in this category) whose heavier reliance on donations saw the worst revenue losses. By contrast, only 29% of museums are reporting severe or very severe stress, putting them with educational institutions at the lower end of the stress spectrum. Museums continue to report strong general audience visitation, an indicator of their importance to the public in times of economic and emotional hardship.

Nonprofits in the $500K-$3M budget category are reporting the highest levels of fiscal stress.

Substantial numbers of organizations in the study are taking a three-pronged approach to mitigating their financial stress:

Intensified Fundraising

For cultural organizations this is focusing largely on expanding individual and foundation donations, asking for smaller gifts from more diversified pools of potential donors, and reseeding endowment funds (one campaign is asking every member to make an endowment gift of $18.69 – 1869 was the year the organization was founded – if successful, $10,000 new dollars will be added to the fund).

Belt-tightening

Cost cutting measures are being augmented with energy conservation activities and expanding collaborations that look to share services, facilities and expertise.

Expanding Entrepreneurial Activities

For cultural organizations these activities are focusing largely on ramping up marketing and funding advocacy efforts. Instituting new fees and raising existing fees for services are also in the mix.

And what about those nonprofits reporting minimal stress? What have they been doing to protect themselves? Here are the top five responses:

Maintained a conservative management approach – 73%
Have strong community support – 41%
Have extraordinary board or staff – 39%
Increased demand for services – 32%
Engaged in effective strategic planning – 32%

Photo: Zoom by Still Burning

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