GuideStar Survey Shows Hard Times for Charitable Organizations

GuideStar, which gathers and publicizes information about nonprofit organizations, reported in it May that these are indeed Hard Times for Charitable Organizations.

A survey of GuideStar Newsletter readers representing 2,979 organizations including 501(c)(3) public charities and private foundations conducted on-line between March 2 and March 16, 2009 found that 52 percent of organizations reported a decrease in giving. That figure was significantly higher than the 35 percent who reported lower contributions for January-September 2008, which was nearly double the 19 percent who reported a decline for January-September 2007.

Clearly the economic hard times are squeezing donors. At the same time non-profits are also being hit by losses to endowments and other invested funds as well as cut-backs of government support from all levels and often slowing payments of money due from state and local agencies.

All the while many organizations, particularly those in the social service and health care areas are also facing an explosion of new clients. 59 % of organizations reported increased demand for their services.

31% of grant makers reported having to make decreases in awards.

No wonder that 8% of respondents said that they were in “imminent danger of folding because of financial reasons.”

Non-profits are understandably tightening their belts in these circumstances. While only 35% had yet cut their budgets from the last fiscal year, that figure would have been much higher if demand for services had not also risen rapidly. More are expected to make cuts—deep cuts—in the next budget cycle.

Of those who have already slashed expenditures, GuideStar reports that “57 percent had reduced services, 45 percent had frozen staff salaries, 37 percent had imposed hiring freezes, and 30 percent had resorted to layoffs. Other strategies included salary reduction (20 percent), reduction in employee benefits (20 percent), and reduction in operating hours (13 percent).”

Small and medium size non-profits with slender staff resources are particularly hard hit at times like this.

Oaktree offers both investment and asset management services and management, consulting, and staff support services to these hard pressed organizations.

If you are involved in a non-profit—or care about one—contact us for information on how we can help. Call 773 725-8787 or e-mail oaktreecapitalgroup@comcast.net .