Though demand for services continues to increase, many nonprofits don't have enough cash on hand to last more than three months.
The State of the Nonprofit Survey concluded that while nonprofits expect to see an 88% increase in demand for services this year, 57% of nonprofits only have enough cash on hand for three months or less.
"Nonprofits are adapting to continued economic pressure in all sorts of creative and substantive ways, but for many, these are stopgap measures that won’t make up for the bigger forces at play," the survey quoted Antony Bugg-Levine, CEO of Nonprofit Finance Fund. "We must rethink the way we fund solutions to our most pressing social problems."
The main issues nonprofits reported facing are decreasing government support, a lack of evolution in funding practices, and not enough board support, the survey noted.
Additional findings:
- 58% of human service organizations were unable to meet demand in 2011.
- 60% won’t be able to meet 2012 demand.
- 56% of human services respondents received federal government funding or contracts; 69% receive state or local funding.
- 52% reported late payments from the federal government; 62% said state or local government payments were late.
- 65% or more of human service nonprofits receiving late federal, state or local government payments used reserves to cover the gap.
The survey did reveal some good news:
- 55% of survey respondents added or expanded programs or services.
- 52% increased the number of people served.
- 50% hired for new positions.
- While 23% of respondents cut staff in 2011, just 10% expect to do so in 2012.