The ‘quiet crisis’ facing the nonprofit sector

If you are involved with the nonprofit sector in any way (and I know many of you are), then you have undoubtedly been affected by the money crunch in ways you would not have anticipated even one year ago.

This morning, I read an article on beliefnet that literally shocked me… and the title just about says it all.

“The Non Profit Sector: More Jobs than Finance & Auto Combined…and Sinking Fast”

According to this report 11% of the nation’s workforce are employed or volunteer full-time (think AmeriCorps, like me!) in the nonprofit sector, and that’s more than the auto industry and financial industry put together.

This “quiet crisis”  (quiet because it has flow quietly under the radar thus far) is the “triple whammy” of key factors.

The evaporation of wealth has decimated charitable donations; the state and local budget crunch is costing nonprofits their foremost paying clients; and the human need for nonprofit help is skyrocketing as nonprofit resources shrink.

Or in other words, the economy is hemorrhaging money, which has caused two things to happen. First, the need for services typically provided nonprofits has increased, i.e., people need emergency housing, clothing, and food. Second, because money is so tight, charitable donations have decreased which means nonprofits have fewer resources to offer while need is increasing. It’s a vicious cycle.

To put it in context with some startling numbers:

  • Churches, many of which deliver social services to the poor and needy, were expected to raise $3 billion to $5 billion less than anticipated in the last quarter of 2008;
  • United Way saw a 68 percent increase during the past year in the number of calls for basic needs such as securing food, shelter, and warm clothing, and is receiving 10,000 to 15,000 more calls every month compared to 2007;
  • Chicago’s Meals on Wheels is trimming its budget by 35 percent;
  • The State of Arizona reports an increase of more than 100 percent in the number of people who sought social services from 2007 to 2008, and Goodwill of Central Arizona reported nearly twice the number of visits to its centers on December 23, 2008, compared to the same day in 2007; and
  • Over the last year, more than 70 percent of Michigan nonprofits have seen increasing demand for their services, while 50 percent say their financial support has dropped.

Apparently, me not finding a job in the nonprofit world is the least of the sector’s concerns…/sarcasm.

The full report is available for download. You should be glad to find out it’s not all doom and gloom however. There are also some recommendations that you might be able to apply to your own work.

If you are involved in a nonprofit in any way (read: if you work for or attend a church), then this is worth at least a quick read.

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