There’s much occurring in the nonprofit landscape. The astute observer should be and always willing to look behind the covers of what is happening. Here’s a few thoughts to help bring sense to what is happening:
1. 25% of nonprofits will lose their tax exempt status. Guidestar made this prediction as the result of nonprofits failing to file their annual 990. While many will seek reinstatement of their status, the implications behind this trend is a continued winnowing of the nonprofit field. The key trend is the push towards greater accountability and sophistication in how nonprofits are being run. No longer does or should nonprofit mean nonperformance. The message is being issued loud and clear. Some nonprofits will have to question if they are ready.
2. Because of the downturn, 8% of nonprofits will close their doors. The economic downturn has produced severe strain on many nonprofits. As many as 30-40% have reported decreased giving. Some have survived through budget cuts. Others are having to make the difficult decision of simply shutting their doors. The message? Unlike the 90s and the early part of the decade of 2000, nonprofits cannot open their doors and expect people will give. They must be intentional about developing clear and compelling messages and likewise be intentional about their fundraising.
3. The 40 million Boomers moving towards retirement means that more nonprofits will open their doors. As the Boomers retire, some will be well positioned to leave their jobs and turn to their altruistic nature. Some will start nonprofits. So even while many nonprofits will be closing their doors, there will more that will open. Competition for donor dollars will remain. It’s also important to note that some of these Boomers were funding ministries while they were working. But as they leave the work force and start their own nonprofits, they’ll become increasingly concerned about funding their own nonprofits.
4. Good news: the nonprofit sector will continue to experience a demand for services. In light of these troubled times, unemployment, financial stress, there will be an increased demand for nonprofit services. Mental health agencies are experiencing tremendous demands. Job location, networking, business oriented ministries are very much in vogue, but for different reasons. People need and want jobs. Homeless and rescue missions are straining at the seams. How is this good news in view of declining contributions? The demand for services allows the nonprofit to craft a compelling case statement for donor support.
It was Rockefeller who said that he made money when there was “blood in the streets.” While that adage may not sound particularly appropriate for the nonprofit sector, perhaps the mentality should be. Nonprofits who rise to the occasion in the midst of adversity will continue to excel and continue to carry out their mission.
William F. High is the President/General Counsel of the Servant Foundation (www.servantchristian.com). Servant’s mission is to inspire, teach and facilitate revolutionary biblical generosity. He may be reached at whigh@servantchristian.com.
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