The Nonprofit Finance Fund (NFF) launched its initial ‘State of the Sector’ survey in 2008, when economic crisis threatened the viability of many organizations. The last few years have seen some stabilization and recovery for nonprofit organizations and nonprofits are adding jobs and finding time and resources to focus on strategic initiatives.
But as they are emerging from the short term crisis that has occupied resources over the last seven years, nonprofits are being confronted with the realities of organizational sustainability. Organizations are looking to make the right investments to secure their long-term future, but are faced with some difficult challenges.
In 2014, the social sector experienced extremes of both promising innovation (the Ice Bucket Fundraising Challenge) and overwhelming challenges (New York City’s largest and oldest human services nonprofit bankruptcy filing).
NFF’s 2015 State of the Nonprofit Sector Survey focuses on the underlying causes of these dynamics by exploring the programmatic, financial, and operational issues facing nonprofits across the U.S.
2015 Key Findings
Under-resourced communities are going without because nonprofits can't meet demand. Americans —particularly those in low-income communities—are still struggling to secure jobs, affordable housing, and healthcare.
- 76% of nonprofits reported an increase in demand for services—the 7th year that a majority have reported increases
- 52% couldn't meet demand—the third year in a row that more than half of nonprofits couldn't meet demand
- Of those who reported that they could not meet demand, 71% said that client needs go unmet when they can't provide services.
Recovery of the U.S. economy hasn't addressed the systemic and perpetual funding challenges facing nonprofits. While we are seeing some positive economic indicators, in many cases nonprofits are still hampered by insufficient funding and a lack of investment in long-term sustainability.
- For some nonprofits, financial health indicators have improved: 47% ended 2014 with a surplus, the highest in the history of our survey
- However, 53% are reporting 3 months or less of cash-on-hand
- Nonprofits said that top challenges were:
- Achieving long-term sustainability (32%)
- The ability to offer competitive pay and/or retain staff (25%)
- Raising funding that covers full costs (19%)
Nonprofits are navigating a time of immense need and change, while pursuing ways to build long-term sustainability and viability. Nonprofits continue to prove their ability to survive and thrive in tough conditions. They are working to ensure their ability to meet community needs now and in the years to come. Here are some of the ways they are investing in their futures:
- 51% collaborated with another organization to improve or increase services offered
- 44% hired staff for new positions
- 33% upgraded hardware or software to improve service or program delivery
- 29% conducted long-term strategic or financial planning
Achieving long-term sustainability requires that nonprofits closely monitor both financial and operational measures of success. Learn how nonprofits have gained that visibility with Intacct's accounting software for nonprofits.