Non Profit Sector Retrenching

"We know what we are, but know not what we may be." - William Shakespeare

NON PROFIT SECTOR RETRENCHING

The Summer 2003 issue of "The Nonprofit Quarterly" (www.nonprofitquarterly.org) addressed the financial difficulties of the US nonprofit sector.  In part, the publication observed . . .

"After 10 years of steady financial growth, nonprofit organizations are facing a major retrenchment.  As was the case in the last two economic downturns, nonprofits are experiencing the recession a year after the rest of the economy, and are likely to stay in recession two years longer.  Even while the Federal Reserve is detecting signs that the US economy is on the brink of recovery, nonprofit organizations in almost every activity area are in a steep slide. . . .

"We know that substantial numbers of organizations will disolve, and others will merge.  Organizations that depend on earned income will have to more closely manage each revenue center to make sure they make their numbers — and be prepared to act quickly if they don't.  A large number of organizations will operate at a flat or smaller size for a time, waiting for the economy to recover.

"For surviving and growing organizations, the world will also look different because whole sectors of essential community services may be lost, depending on shifts in funding. Within the shrinkage of collateral services, some of which an organization has relied on . . . a new round of planning and assessment is in order.

"In retrospect, organizations might have acted differently if they knew they were in an economic bubble, but who knew?  The management challenge now will be to stay abreast of indicators, assess what's going on in the community around the organization, and to take the long view beyond the current cycle."

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