Nonprofits - Survival of the Fittest?

Posted by Fundraising Pro on May 15, 2009

According to a recent article in The Chronicle of Philanthropy, many nonprofit organizations have sharply reduced their budgets, due to declines in donations, fees, endowment income, and state government support. But most experts believe the worst is yet to come, as foundations cut their grant awards in the coming year to bring their distribution of funds in line with the steep investment losses their endowments have suffered.

The article quotes Paul C. Light, a professor of public services at New York University, as predicting that more than 100,000 charities will fail in the next two years and that he fears that survival of the fittest is angled towards the wrong kind of fitness. Those charities with well-oiled fund-raising machines are likely to survive and prosper while worthy charities with little name recognition or marketing clout may go under.

There’s general agreement, it seems, especially among funders inside government and in the philanthropic sector that there are too many nonprofits and some winnowing might not be so bad. But if the winnowing is done in a random way, we could wind up losing a number of very good nonprofits that should survive.

Some foundation officials believe that most charities have not fully come to terms with the severity of the current economic climate. But if you put off difficult decisions for too long, you put the whole organization at risk and may make yourself unattractive as a merger candidate should it come to that.

Keep on top of what’s going on in your nonprofit organization’s finances. Don’t forget to consider selling the Samaritan Card as a fundraiser. It’s not a luxury item like fancy wrapping paper or gourmet popcorn that people don’t need. The Samaritan Card offers people discounts on items they really buy. The Samaritan Card is accepted at over 100,000 retailers.