Nonprofit Finance Fund

Research Friday: Government contracting part II: Adapting in an era of less

 

posted by
Anjali Deshmukh,
Director

and
Angela Francis,
Manager
Nonprofit Finance Fund

Welcome to Research Friday! As part of a continuing series,we invite a nonprofit scholar, student, or professional to highlight current research reports or studies and discuss how they can inform and improve day-to-day nonprofit practice.

Conducted in January and February 2013, Nonprofit Finance Fund’s 2013 State of the Sector survey assessed the financial and management challenges facing 5,983 organizations across the country. As income disparity continues to grow, many nonprofits are struggling to meet overwhelming community need amid the stark realities of funding cuts. Many are recognizing that this dynamic may be here to stay.

When NFF began this survey in 2009, many of our clients were in “triage” mode: they were dealing with mission and finance-related emergencies, relying on short-term coping strategies—like reserve depletion and staff furloughs—to make ends meet until the financial crisis was over. Five years later, temporary stimulus funding has come and gone, replaced instead by ongoing cuts to government funding. Organizations reliant on government funding continue to experience a “death by a thousand cuts,” says NFF client Sharon Stapel, Executive Director of the New York City Anti-Violence Project. “In isolation, the cuts may seem small,” says Stapel, “but over time, they speak to a larger, more serious trend that will have an impact on the health, happiness, and safety of our communities.”

Research Friday: Government contracting in the new normal

 

posted by
Anjali Deshmukh,
Associate Director

and
Angela Francis,
Senior Associate
Nonprofit Finance Fund

Welcome to Research Friday! As part of a continuing series,we invite a nonprofit scholar, student, or professional to highlight current research reports or studies and discuss how they can inform and improve day-to-day nonprofit practice.

Nonprofit Finance Fund’s (NFF) 2013 State of the Sector survey explored a variety of financial and management challenges facing organizations across the country. The core story, as told by nearly 6,000 respondents, is of a fragile balancing act between rising community need and shrinking or stagnant resources for social programs. Particularly in the last several years, in the wake of the financial crisis, organizations have struggled with a variety of challenges related to government support.

In the United States, we rely on government to provide key economic supports. We expect the federal, state, and local governments to play a role in educating our children, helping communities rebuild after natural disasters, and improving our collective quality of life. To deliver on this mandate, services like public education are administered by the government, while many other complementary programs - such as job training and placement - are outsourced to nonprofits. According to a 2010 Urban Institute study, nonprofit organizations (with records of income data) reported that nearly one-third of their revenue sources came from the government.

Small nonprofits, big impact

posted by
Anjali Deshmukh,
Associate Director

and
Angela Francis,
Senior Associate
Nonprofit Finance Fund

Welcome to Research Friday! As part of a continuing weekly series, each Friday we invite a nonprofit scholar, student, or professional to highlight current research reports or studies and discuss how they can inform and improve day-to-day nonprofit practice.

There are over 1.5 million nonprofits in the United States. Of those, three-quarters (almost 1.2 million) have annual budgets under $1 million, and most are even smaller. What these organizations lack in size, however, they make up for in impact. They respond to localized needs, are absolutely critical to community building, and are staffed by people with deep knowledge and caring for the communities where they live and work. These organizations often serve communities that have been abandoned by countless others. Yet, in the Nonprofit Finance Fund’s (NFF) work with small nonprofits (most recently through our Capital and Capacity for Economic Recovery Initiative), we’ve found that these essential organizations often struggle to match available funding sources to their actual needs, which results in a number of challenges. So what are some of these challenges, and what makes small nonprofits different from their larger counterparts? Our new report, Small Organizations Solving Big Problems, explores this question.

Research Friday: Your story matters. Please share it with us

posted by
Jen Talansky
Vice President, Knowledge
and Communications

Nonprofit Finance Fund


Welcome to Research Friday! As part of a continuing series, we invite a nonprofit expert to highlight a research report or study and discuss how it can inform and improve day-to-day nonprofit practice.

Government funding hovers on the edge of a fiscal cliff. The economy and housing markets continue to tremble. And true natural disasters are sowing human tragedy across the globe.

We depend on the nonprofit sector to help alleviate these problems. Yet, in a time of so much uncertainty and such great need, many struggle to respond. How are our fellow nonprofits doing it? We want to know, and we want to share this knowledge with the world.

Nonprofit Finance Fund is conducting its fifth annual State of the Sector survey to find out what nonprofits and the communities they serve need most. This anonymous survey asks nonprofit leaders about the management and financial challenges they’re facing as they work tirelessly on mission. In a sector that often lacks data, this survey illustrates real-time financial and operational trends.

We share the aggregated results of the survey with foundations, government entities, media, associations, advocacy organizations and nonprofits themselves. The results improve grantmaking practices, help shape conversations on the needs of the social sector, and provide a rich source of data.

Research Friday: Why Take a Survey?

posted by
Jen Talansky,
Vice President, Knowledge
and Communications,

Nonprofit Finance Fund


Welcome to Research Friday! As part of a continuing weekly series, each Friday we invite a nonprofit expert to highlight a research report or study and discuss how it can inform and improve day-to-day nonprofit practice.

In our professional and personal lives, we are all asked to take a dozen or more surveys every year. At work, I receive email surveys on everything from how we use social media to how we like the services of our vendors. At home, I get opinion questionnaires from organizations ranging from political parties to movie ticket vendors.

Being the recipient of so many surveys, I pick and choose which I respond to. No doubt you do as well. As the Nonprofit Finance Fund (NFF) embarks on its fourth annual nonprofit State of the Sector Survey, I hope you will choose to spend a few minutes of your valuable and busy work time responding to ours. Here’s why.

Research Friday: Many Nonprofits Face Cash Crisis

posted by
Angela Francis
,
Senior Associate
Nonprofit Finance Fund

Welcome to Research Friday! For this week's post, we welcome Angela Francis, Senior Associate, from Nonprofit Finance Fund to discuss NFF's recently released State of the Sector survey findings. We've had a great response thus far to Research Friday, our weekly series on nonprofit research. We welcome your comments, feedback, and suggestions!

At Nonprofit Finance Fund (NFF), we use data and capital to drive our work with nonprofits and their funders nationwide. One source of data informing this work is our annual State of the Sector Survey. Earlier this year, nearly 2,000 nonprofit leaders completed the survey, and the results help us to better understand and communicate the economic reality facing nonprofit practitioners on the ground. In a previous Research Friday post, I covered some key survey takeaways on the increased demand for services in 2011, and how this is communicated to funders. This week, I want to delve a little deeper into the survey responses that we received in another key area: cash available to manage risk.

As we work with clients, provide workshops, and present on nonprofit finance issues, one question pops up again and again: how much cash cushion should a nonprofit have? One of my NFF colleagues recently explained why the answer is different for every organization and depends on a number of factors. As a rough benchmark, though, NFF recommends nonprofits should have enough cash to sustain operations for at least three months. Having less than one month of cash at your disposal is generally considered a cash crisis.

A more ideal situation is holding three to six months of cash, which makes it easier to start thinking long term and building up reserves: a rainy day fund, facility reserves, etc. Organizations with reserves are better prepared for an emergency (major building repairs, loss of a primary funding source, severe economic upheaval), and, in a crisis, it's more likely that they can continue providing their services uninterrupted.

Research Friday: State of the Sector 2011: All quiet on the nonprofit front

posted by
Angela Francis
,
Senior Associate
Nonprofit Finance Fund

Welcome to Research Friday! For this week’s post, we welcome Angela Francis from Nonprofit Finance Fund to discuss NFF’s recently released State of the Sector survey findings. We've had a great response thus far to Research Friday, our weekly series on nonprofit research. We welcome your comments, feedback and suggestions!

Nonprofit Finance Fund recently completed its third annual "State of the Nonprofit Sector" survey with the help of nearly 2,000 nonprofit leaders nationwide. Respondents came from large organizations and small, and from all sub-sectors, and include a small sample from Arizona.

Since we started this undertaking in 2009, we've heard each year that demand is on the rise, and that remains the expectation for 2011. To meet this growing demand—which comes on top of each previous year's increases—nonprofit managers continue to be resourceful in their efforts to balance mission, capacity, and capital. From collaboration to cost management, nonprofits are trying to protect their (precious little) infrastructure and enterprise while serving even more people.

This balancing act becomes increasingly difficult when organizations experience upheaval—whether due to a recession, the loss of a funding source, or unexpected expenses. Yet even smaller changes, such as a program expansion, can quickly overwhelm a nonprofit operating on paper-thin margins with no cushion to absorb the risks and expenses associated with growth. In Arizona, 35% of our survey respondents reported having less than 1 month of cash on hand (10% had none), which is fairly consistent with results nationally.

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