What's the world to do when nonprofits lose their funding?
The safety net for the disadvantaged that stretches across the country, discretely interwoven into all branches of business and government, is
fraying. The North Carolina unemployment rate hit 8.7 percent Jan. 27
and is continuing to rise. Foreclosures increased 66.5 percent from
2006 and 135 percent from 2005.
Though interspersed throughout society, a great majority of the work is handled by nonprofit organizations. Organizations as local as the Alamance County Meals on Wheels or the Alamance Partnership for Children or any of the multitudes of local churches of all denominations have long been dedicated to assisting those in need.
After years of success, the very survival of such organizations is in jeopardy. In December 2007, nonprofits accounted for close to 213,000 jobs in North Carolina — 6 percent of the workforce — and provided $25.8 billion for North Carolina’s general economy.
Nationwide, the trend is even greater. Nonprofits employ 11 million people — 10 percent of the workforce — more than both finance and transportation.
Such contributions often go unnoticed. When job losses are reported, they rarely contain nonprofits. Sectors such as finance, banking, insurance and real estate all provided fewer jobs in North Carolina as of 2007.
Elizabeth Clawson, communications and development associate of the National Council of Nonprofits, attributed the problems facing nonprofits to a squeeze on both sides.
On one end, there is a rapid decrease in revenue, a decline in grants and corporate sponsorships coupled with less state and local funding. The other end is composed of an increase in service needs.
The effects have been immediate. The Delaware Association of Nonprofits combined with its counterpart in Maryland because having its own headquarters became too expensive. Other nonprofits are beginning to do the same.
Joseph Mann, chair of the board of the North Carolina Center for Nonprofits, has witnessed joint efforts beginning to take hold.
“They’re finding a way to collaborate, finding out what their essential areas are. Those that are not central are going to be honed down,” he said.
Returning to contributors who in the past have consistently sustained nonprofits and reminding them just how needed they are is another strategy, but ultimately there are going to have to be losses no matter what course of action is taken.
“With so few dollars, only those acting effectively with a long history are going to be able to stay in business,” Mann said.
That is, unless a third party jumps in. The National Council for Nonprofits posted a description of various allocations imbedded in the recent federal stimulus package.
“Federal, state and local government officials will be severely challenged to deploy this volume of funding with such rapid deadlines — not because they are inept, but because few have ever experienced such demands in their careers.“Therefore, nonprofit leaders need to step forward now to claim a seat at the policy table,” the report said.
The list is lengthy but contains several highlights: $53.6 billion for the State Stabilization Fund, $3.95 billion for job training and employment services under the Workforce Investment Act, $2 billion for the emergency assistance of foreclosed or abandoned homes, $19.9 billion for food stamps, $24.7 billion in subsidies for COBRA coverage for the unemployed, $160 million for the Domestic Volunteer Service Act, $50 million for the National Endowment for the Arts and another $50 million for a new initiative in nonprofit capacity building grants.
Obviously, federal measures are mostly focused on alleviating costs for states and, indirectly, nonprofits. The link between government and nonprofits in regard to executing the goals of these stimuli cannot be forgotten in the spending splurge. About 29 percent of the nonprofit sector’s revenues comes from government, after all.
Money alone cannot solve a problem. Cash only momentarily feeds and clothes, and eventually, like any resource, it runs dry. The key is making the most of those limited resources, and to do so requires initiative and training, something the nonprofit sector can readily match to the government funds.
Nonprofits, Mann said, reflect the genius of American society. They’re born when an individual sees a need or a cause and immediately begins to formulate a solution. What must be kept in mind during this reorganization is the spark that brings about solutions: the human element.
Both Clawson and Tim Delaney, president of the National Council of Nonprofits, highlighted the importance of this. There must ultimately be recognition of needs and a realization that it is the issue of how the economy is affecting individuals and communities, not organizations and sectors, that is most important.
Though interspersed throughout society, a great majority of the work is handled by nonprofit organizations. Organizations as local as the Alamance County Meals on Wheels or the Alamance Partnership for Children or any of the multitudes of local churches of all denominations have long been dedicated to assisting those in need.
After years of success, the very survival of such organizations is in jeopardy. In December 2007, nonprofits accounted for close to 213,000 jobs in North Carolina — 6 percent of the workforce — and provided $25.8 billion for North Carolina’s general economy.
Nationwide, the trend is even greater. Nonprofits employ 11 million people — 10 percent of the workforce — more than both finance and transportation.
Such contributions often go unnoticed. When job losses are reported, they rarely contain nonprofits. Sectors such as finance, banking, insurance and real estate all provided fewer jobs in North Carolina as of 2007.
Elizabeth Clawson, communications and development associate of the National Council of Nonprofits, attributed the problems facing nonprofits to a squeeze on both sides.
On one end, there is a rapid decrease in revenue, a decline in grants and corporate sponsorships coupled with less state and local funding. The other end is composed of an increase in service needs.
The effects have been immediate. The Delaware Association of Nonprofits combined with its counterpart in Maryland because having its own headquarters became too expensive. Other nonprofits are beginning to do the same.
Joseph Mann, chair of the board of the North Carolina Center for Nonprofits, has witnessed joint efforts beginning to take hold.
“They’re finding a way to collaborate, finding out what their essential areas are. Those that are not central are going to be honed down,” he said.
Returning to contributors who in the past have consistently sustained nonprofits and reminding them just how needed they are is another strategy, but ultimately there are going to have to be losses no matter what course of action is taken.
“With so few dollars, only those acting effectively with a long history are going to be able to stay in business,” Mann said.
That is, unless a third party jumps in. The National Council for Nonprofits posted a description of various allocations imbedded in the recent federal stimulus package.
“Federal, state and local government officials will be severely challenged to deploy this volume of funding with such rapid deadlines — not because they are inept, but because few have ever experienced such demands in their careers.“Therefore, nonprofit leaders need to step forward now to claim a seat at the policy table,” the report said.
The list is lengthy but contains several highlights: $53.6 billion for the State Stabilization Fund, $3.95 billion for job training and employment services under the Workforce Investment Act, $2 billion for the emergency assistance of foreclosed or abandoned homes, $19.9 billion for food stamps, $24.7 billion in subsidies for COBRA coverage for the unemployed, $160 million for the Domestic Volunteer Service Act, $50 million for the National Endowment for the Arts and another $50 million for a new initiative in nonprofit capacity building grants.
Obviously, federal measures are mostly focused on alleviating costs for states and, indirectly, nonprofits. The link between government and nonprofits in regard to executing the goals of these stimuli cannot be forgotten in the spending splurge. About 29 percent of the nonprofit sector’s revenues comes from government, after all.
Money alone cannot solve a problem. Cash only momentarily feeds and clothes, and eventually, like any resource, it runs dry. The key is making the most of those limited resources, and to do so requires initiative and training, something the nonprofit sector can readily match to the government funds.
Nonprofits, Mann said, reflect the genius of American society. They’re born when an individual sees a need or a cause and immediately begins to formulate a solution. What must be kept in mind during this reorganization is the spark that brings about solutions: the human element.
Both Clawson and Tim Delaney, president of the National Council of Nonprofits, highlighted the importance of this. There must ultimately be recognition of needs and a realization that it is the issue of how the economy is affecting individuals and communities, not organizations and sectors, that is most important.
Updated March 3, 2009
