Nonprofits & The Economy

2nd Annual Survey 2010Understanding our communityNorthern Palm Beach & Martin County Perspective

• Tax-exempt, 501 (c )(3) public charity More than 250 funds

• $100 million in total assets

• Last year awarded nearly $9 million in grants and scholarships

• Cumulative grants of nearly $81 million

• Supported by hundreds of donors

Allegany Franciscan Minstries A non-profit Catholic

organization focused on improving the overall health status of individuals

Guided by the tradition and vision of the Franciscan Sisters of Allegany, provides grants to organizations in three regions of Florida

Nationwide Trends in Responding

Typical Cost-cutting Measures Limiting travel Eliminating employer contributions

to health insurance, retirement Eliminating professional

development options Enforced furloughs, job sharing,

reduction from full-time to part-time

Cutting salaries Across-the-board budget cuts

The New-New Thing:Strategic planning became even more essential

Nationwide Trends in Responding

Governance Front & Center Board members becoming activated on issues

of policy & practice The Dreaded 990s Environment of increased public scrutiny and

concern with education and communication Conflict of interest, whistle blower policies,

compensation Exec., audit and investment committees

became more active, emphasis on oversight & fiscal responsibility

Local Perspective: 2nd Annual Nonprofits and the Economy Survey Pulse of the nonprofit community 367 (48) responses representing:

21,704 full-time staff members (858) 5,796 part-time staff members (411) 4,437 Board members (644) 49,911 Volunteers (5,548) Average years operating: 30 (22)

The Respondents

Aging; 3% Arts & Culture; 12%

Community & Economic De-

velopment; 8%

Education; 15%

Environment; 3%

Grantmaking/Funding; 2%

Health & Human Services; 40%

Human & Race Relations; 1%

Religion; 2%

Other; 15%

Figure 1 - Respondents by Program Area

Broward; 12%

Dade; 7%

Martin; 21%

Palm Beach; 38%

St. Lu-cie; 13%

Other; 9%

Figure 2 - Respondents by County(ies) Served

Challenges

Recruiting qualified staff

Attracting new members/clients/participants

Competition with other nonprofits

Strategic planning and evaluation

Recruiting qualified, reliable volunteers

Meeting needs/interests of current members/clients/participants

Marketing our services/programs

Covering employee payroll, benefits and/or insurance costs

Obtaining funding

Recruiting donors

1.6

1.7

1.7

1.8

1.9

2

2.1

2.2

2.7

2.7

Current Challenges

What We Found: Challenges

Similar results as last year & for Martin/North PBC

What We Found: Challenges

Funding for operating expenses emerged as a top priority for organizations in light of increase of demand for service.

75% felt some degree of vulnerability and 2% noted that the organization would cease operations if the economy did not improve soon.

“At a time when need for services in the community is increasing, we are faced with cutting programs due to increasing deficits.

- Palm Beach Gardens

“There has been a significant increase in the number of households seeking financial aid for rent, mortgage payments and foreclosure prevention assistance.”

-Indiantown

Areas of Highest Need

Majority of the population has been affected in light of the economic downturn.

Many of most vulnerable are newly affected (children, low to mid income families, elderly, jobless, etc.) and people are facing difficulties in many areas (education, unemployment, housing, healthcare, hunger).

“Due to the economy and high unemployment rate, the characteristics of the population we are serving has expanded to include formerly "financially secure" individuals and families who, through no fault of their own, are now desperate and do not have many options to alter their situation; they simply don't know where to turn…”

-Stuart

What We Found: Capital Campaigns

54 respondents currently undertaking a capital campaign. Avg. goals: $7 million+ 42% of funds have been

acquired ($87.7 million) 34 respondents are

postponing plans to launch a capital campaign.

Martin/North PBC Goal: $77,000,000 Raised: $18,600,000

Raised to Date; $87,652,000

Still Needed; $209,763,000

Figure 7 - Capital Campaign Progress

COMBINED GOAL: $297,415,000

$80 Million increase over last year

Collaborate with other nonprofits

Use prior-year cash reserves

Borrow money

Cut nonessential expenses

Delay payment of bills

Delay payment of payroll

Eliminate programs

Increase fundraising activities

Turn away clients

Lay off staff

127

87

35

185

53

13

58

141

40

64

Organizational Actions(based on number of responses)

What We Found: Organizational Actions

What We Found: Organizational Actions

Continuing to cut expenses and increase fundraising activities.

New trend: more organizations reported they are collaborating with other nonprofits.

40% of respondents reported experiencing negative cash flow in the past 12 months (a 15% increase over last year’s results) and 30% of those attributed the need to borrow money due to unmet fundraising goals.

“We asked for voluntary salary reductions and two-thirds of the staff gave between 5 and 20 percent of their wages for nine months last year.”

-Stuart

“The biggest need for our organization is fundraising. Our organization has been sustained by 95% grants, and we are trying to fundraise in order to offset the economic decline and lack of grants available.”

-North Palm Beach

Other findings

TOP THREE AREAS OF INTEREST

• Building endowment• Increasing volunteer

opportunities• Undertaking

collaborative fundraising efforts

• Many respondents also expressed an interest in the “greening” of business operation.

LARGEST DECREASE IN FUNDING MIX

• Foundation grants• Individual

contributions• Corporate donations

Significant decrease

Slight decrease

No change

Slight increase

Significant increase

30%

32%

16%

16%

7%

Endowment

What We Found: Endowments Suffered

Gauging Interest

Nonprofits demonstrated a strong interest in: Building endowment Increasing volunteer opportunities Undertaking collaborative fundraising

efforts Many respondents also expressed an

interest in the “greening” of business operation.

Suggestions to Funders in addition to Giving

Nonprofits repeatedly noted the need for operational support and assistance in establishing partnerships.

Many also indicated the need for training and advocacy on behalf of the nonprofit sector.

“[Help] promote their support in the media with more vigor…I think that foundations have a credibility factor that can could benefit the organizations they support by communicating why they are supporting the organization.”

-Palm City

“Encourage donor designated funds, or do donor drives to increase funding in certain areas not represented.”

- Jupiter

Positive Impact

Respondents were asked to share some good news in this year’s survey. Respondents praised:▪ The dedication of staff

and volunteers▪ Increased

partnerships▪ Improved business

operations

“ I personally think we will be a stronger organization having survived this storm and be more focused about what we do and why we do it.”

-Stuart

Good News

National Outlook

Some states revoking charities’ tax exemptions Public entities looking at taxing nonprofits for

new, public sources of revenue Private/nonprofit partnership as new models Mergers and acquisitions Increased use of technology Some shifts toward eligibility to enable

operational support as a foundation funding priority

Giving is down but donors remain engaged in 2010

The Future Outlook: Local View Leveraging is key to meeting critical needs

Restructuring: Tough choices ahead: consolidate, collaborate, merge or exit

Necessity of increased cost efficiencies

Technology/social media as an enabler

Best guess: Funding is going to continue to be constrained and highly competitive

Your Insights

Continue to share your suggestions, comments and insights at www.yourpbc.org/economy

Stay tuned for future announcements.

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