Nonprofit Demand Is Up, But More Than Half Of Charities Only Have Enough Cash For 3 Months Or Less

Though demand for services is up, an alarming percentage of nonprofits don't have enough cash on hand to last more than three months.

After interviewing more than 4,500 respondents, the State of the Nonprofit Survey concluded that while nonprofits expect to see an 88 percent increase in demand for services this year, 57 percent of nonprofits only have enough cash on hand for three months or less.

"Nonprofits are adapting to continued economic pressure in all sorts of creative and substantive ways, but for many, these are stopgap measures that won’t make up for the bigger forces at play," the survey quoted Antony Bugg-Levine, CEO of Nonprofit Finance Fund. "We must rethink the way we fund solutions to our most pressing social problems."

The main issues nonprofits reported facing are decreasing government support, a lack of evolution in funding practices, and not enough board support, the survey noted.

Abby's House, a Massachusetts charity that provides shelter, housing and advocacy to homeless women and children, is one such nonprofit that is experiencing a spike in demand that it can't accommodate.

In the past three years, the shelter has seen the length of stay increase to 33 nights from 11 nights, Sarah Lange, Director of Fund Development and External Relations, told the survey's analysts.

"We are scrambling to come up with creative solutions to shelter women for whom we have no room," Lange said. "Economic recovery is still not a reality here."