Almost one-third of nonprofit leaders say they’re unable to meet increased demand for services and more than half expect conditions to become more difficult next year.
Some 75 percent of nonprofit executives reported reductions and/or significant delays in funding during the past year, according to the most recent “Nonprofit Leadership Pulse,” a national survey by Marks Paneth, a New York City-based accounting, tax and advisory firm.
One-third of the 371 nonprofit leaders surveyed said they had to dip into cash reserves to make ends meet and more than 28 percent ended last year with a deficit.
About 52 percent of nonprofits experienced increased demand for program and services and almost as many expanded services to meet that demand. “When demand for services grows but funding declines, nonprofits find themselves stuck in a perpetual crisis mode,” Michael McNee, Partner-in-Charge of the Nonprofit and Government Group at Marks Paneth, said in a press release announcing the survey results. “It’s more than just logistics and finance – it’s an emotional roller coaster. There is a clear struggle between reliable funding and the need to support increasing demand, and the effects are real,” he said.
Turnover remains high at nonprofits with 60 percent of organizations surveyed experiencing staff turnover in the past 12 months; 17 percent were forced to lay off staff. More than one in five experienced a change in executive leadership and half as many lost at least one board member. The majority of those surveyed employed fewer than 100 people.
“The result is nonprofit fatigue,” said Sibi Thomas, a partner in the Nonprofit and Government Group at Marks Paneth. “While the demands of the nonprofit world can be invigorating, everything can seem so critical that it is hard to prioritize what needs to be done. Sometimes leaders need to step back, review the mission, the demand for services and the resources at hand and make the tough choices,” he said.
The survey results suggests that reviewing the “organizational structure, operations and leadership model can reveal opportunities to increase efficiency and reduce workload,” he said.
Marks Paneth sponsored and supervised development of the questionnaire, which was self-administered online by respondents during late August and early September. Business Research Solutions managed the research project.
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