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Investing in Nonprofits: Calling on Boards and Funders to Commit

A new survey by the Nonprofit Finance Fund (NFF), led by CEO Clara Miller, adds to the data showing that nonprofits are in financial distress. 

A new survey by the Nonprofit Finance Fund (NFF), led by CEO Clara Miller, adds to the data showing that nonprofits are in financial distress. 

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According to the 986 nonprofits surveyed around the country, 73% indicate they have experienced an increase in demand for services.  At the same time, 62% of nonprofits anticipate decreases in funding from foundations, 49% anticipate decreases from individuals, 43% anticipate decreases from government sources, and 33% anticipate decreases from earned revenues. 28% of the organizations have budgets of only $500,000 and under. The majority of nonprofits surveyed (62%) did not have enough cash readily available to cover 0 – 3 months as they started 2009, and 38% are concerned about meeting expenses for 2009.

 

In order to be vital and strong, a nonprofit requires a highly committed board of directors who are all fully engaged, including a mix of generous supporters and experts in the field from diverse backgrounds and perspectives.  Nonprofits also require foundation funders who provide meaningful multi-year funding for operating expenses (even if the nonprofit can also create earned revenue streams to supplement its income…you see, if a homeless shelter could generate a profit, it would be a hotel).

 

If you are on a board, be sure that this is the cause and nonprofit you care about, invest generously, raise money, help ensure the board has effective and generous leadership, and help the organization to become strategically and financially vital – including possibly through organizational partnerships.

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If you are a foundation funder, invest in multi-year funding for operating expenses at a level that is meaningful.  If you are a corporate funder, also consider involving talented professionals and executives from your firm to help the organization with public relations, strategy, information technology, strategic alliances, and other business functions.

 

Boards, together with the CEOs they hire, and those who fund nonprofits are best positioned to help nonprofits build strong and robust revenue structures. Together, they can ensure that nonprofits provide the most valuable services that are needed for a healthy, educated, environmentally sustainable, socially just, economically vibrant, safer, and more peaceful world. 

 

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About the author

Korngold provides strategy consulting to global corporations on sustainability, facilitating corporate-nonprofit partnerships, and training and placing hundreds of business executives on NGO/nonprofit boards for 20+ years. She provides strategy and board governance consulting to NGO/nonprofit boards, foundations, and educational and healthcare institutions. Korngold's latest book is "A Better World, Inc.: How Companies Profit by Solving Global Problems…Where Governments Cannot," published by Palgrave Macmillan for release on 1/7/14

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