January 23, 2008
What a Recession Would Mean for Nonprofit Groups
Mounting evidence is pointing to a recession, and nonprofit groups could start feeling the pinch, writes Michael Seltzer, a philanthropy expert and author.
Among the possible scenarios: Corporate giving will fall as profits tumble, foundations will cut back on grant making as returns on endowments decline, individuals will reduce their donations as unemployment and economic insecurity rises, and local and state governments will cut social services and spending on health and education as tax receipts fall.
“Nonprofits are survivors though,” Mr. Seltzer writes on PhilanTopic, a blog published by the Foundation Center. “We’re accustomed to wearing our belts snugly—and tightening them when the economy takes a turn for the worse.”
Mr. Seltzer recalls that during an economic downturn in the 1980s, many nonprofit groups started new efforts to generate income from businesses and other efforts and found ways to cut expenses. In addition, many business professionals left their jobs (sometimes involuntarily) and brought their skills to the nonprofit world. Charities stepped up efforts to promote planned giving because it became more appealing to wary donors.
Mr. Seltzer, author of the book Securing Your Organization’s Future, wonders whether nonprofit groups are better situated to weather the turmoil this time around. What do you think? Is your group prepared to survive a recession? Are you taking any specific steps yet to counter a possible fall in revenue?
Comments
Commenting is closed for this article.
Previous: How Should Universities Teach Philanthropy?
Next: Wealth of Hong Kong Donors Grows
I recently posted an article on the tremendous planned giving opportunity with Charitable Lead Trusts during times of devalued equity markets and low interest rates. I’m encouraging the organizations we are working with to explore these opportunities with their donors, creating tax-savings and current infusions to endowment funds to build sustainability. Go to www.planningforgood.net/2008-articles
— Sarah Ruef-Lindquist Jan 24, 06:31 PM #