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Effects of the Economic Crisis on Nonprofits

Many nonprofits are uncertain about how the Wall Street crisis will affect their organization. The sources below offer strategies, tips, and commentary on philanthropic giving and state budgets, and suggest how the financial crisis is expected to shape our future.

The Chronicle of Philanthropy outlines six ways for nonprofits to “keep the contributions flowing in a troubled economy” in its article, “Fund-Raising Strategies for Troubled Times.” Avoiding fund-raising cuts and keeping donors close are among the actions that offer your agency the best chance of avoiding financial collapse. Learn the six strategies.

The influence of the national economy on state budgets is paramount. Prior to recent economic developments, state budgets were already faltering. In light of the turmoil surrounding the national finance market, “state budgets have a rough road ahead,” says William T. Pound, executive director of the National Conference of State Legislatures. Read more about state budgets.

In the face of an economic crisis, corporate donors are becoming more uncertain about honoring pledges made to nonprofit organizations. According to The Center of Philanthropy at Indiana University, corporations account for only 5.1% of the money given to nonprofit organizations. About 74.8% of giving comes from individual donors, and although the crisis is likely to reduce individual giving as well as corporate giving, the Giving USA Foundation reports that the drop-off in charitable donations is generally mild. Read the CNN article.

The Nonprofit Finance Fund offers three tips for organizations threatened by the financial crisis. The first is to review and optimize three critical aspects of financial assets. Learn more tips.

For answers to some of the most common questions regarding the economic crisis and its effect on the nonprofit sector, read Economic Q&A: The Crisis and Nonprofits. An audio commentary is also available through NPR entitled Assessing Impact of Financial Crisis on Nonprofits.