04/10/2014 06:04 pm ET Updated Jun 10, 2014

State of the Nonprofit Sector

For those of us who work in the nonprofit sector, the news by the Nonprofit Finance Fund that even after the "end" of the recession the demand for services continues to rise is not surprising. Housing and job availability top the list of needs for people who are requesting services. The housing market is rebounding on a national level, but affordable housing is not readily available.

In Central Florida where I live, the Regional Commission on Homelessness is working diligently to strategically plan solutions to the large population of homeless individuals and families. Affordable housing tops the list of needs. Recently Community Vision gathered together in a retreat to work on solutions to this issue.

The Nonprofit Finance Fund key survey findings were:

The economic recovery is leaving behind many nonprofits and communities in need:
• 80 percent of respondents reported an increase in demand for services, the 6th straight year of increased demand.
• 56 percent were unable to meet demand in 2013 -- the highest reported in the survey's history.
• Only 11 percent expect 2014 to be easier than 2013 for the people they serve.

Nonprofits are working to bring in new money; in the next 12 months:
• 31 percent will change the main ways in which they raise and spend money.
• 26 percent will pursue an earned income venture.
• 20 percent will seek funding other than grants and contracts, such as loans or other investments.

Forty-one percent of nonprofits named "achieving long-term financial stability" as a top challenge, yet:
• More than half of nonprofits (55 percent) have three months or less cash-on-hand.
• 28 percent ended their 2013 fiscal year with a deficit.
• Only nine percent can have an open dialogue with funders about developing reserves for operating needs, and only six percent about developing reserves for long-term facility needs.

Nonprofits are taking wide-ranging steps to survive and succeed. In the past 12 months:
• 49 percent collaborated with another organization to improve or increase services.
• 48 percent invested money or time in professional development.
• 40 percent upgraded hardware or software to improve organizational efficiency.
• 39 percent conducted long-term strategic or financial planning.

Respondents said that more than 70 percent of their funders requested impact or program metrics.
• 77 percent agreed that the metrics funders ask for are helpful in assessing impact.
• Only one percent reported that funders always cover the costs of impact measurement; 71 percent said costs were rarely or never covered.

Nonprofits are learning they have to diversify their income streams. In many cases the stroke of a pen can cut a program in half or altogether. Government program priorities have changed, especially when it comes to housing, mental illness and job training. This can have a huge effect on a nonprofit's budget and ability to provide services. Sustainability is always a concern.

Grants often have sunset dates, and in many cases the program that was funded ceases to exist after the grant runs out. Long-term strategy is crucial to ongoing success. Nearly one quarter of the nonprofits surveyed expect to add earned income into their strategic plans.

The need is still great and the funds are not adequate to meet the need out there. It takes a community to make a difference for people in need.

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