NEW YORK, April 27, 2015 /PRNewswire-USNewswire/ -- Demand for critical services continues to climb despite indicators of economic recovery, finds Nonprofit Finance Fund's 2015 State of the Nonprofit Sector Survey. In this seventh annual survey, more than 5,400 respondents from nonprofits nationwide shared details of the financial challenges and opportunities that underpin their ability to create positive social change. The survey was supported by longtime partner the Bank of America Charitable Foundation.
Demand for the services nonprofits provide — such as health and human services, workforce development, and childhood education — continues to grow.
- 76% of nonprofits reported an increase in demand for services - the 7th consecutive year that a majority have reported increases
- 52% couldn't meet demand; the third year in a row that more than half of nonprofits couldn't meet demand
- Of those who reported that they could not meet demand, 71% said that client needs go unmet when they can't provide services
Nonprofits identified critical needs in their communities, including:
- 35% affordable housing
- 26% youth development (such as after-school and mentoring programs)
- 23% job availability; 16% job training
- 21% access to healthcare
- 19% access to strong, well-performing schools
"There is not enough affordable housing for low-income people in our community, and for many of the women we serve, supportive housing is a needed stepping stone to safety, employment, and economic independence," said Audrey Thomas, CEO of Deborah's Place, which works to break the cycle of homelessness for women in Chicago. "We are actively partnering with other agencies that share our aims, but resources are limited."
There were some signs of improved organizational strength; 76% of organizations reported ending 2014 at break-even or with a surplus, the highest in the survey's history. However, even those reporting some financial cushion -- crucial for weathering economic blows and making strategic investments in an organization's future ability to meet mission-- cited significant financial challenges.
Many nonprofits are chronically under-resourced. When asked to identify up to three top challenges:
- 32% of nonprofits said achieving long-term sustainability
- 25% said the ability to offer competitive pay and/or retain staff
- 19% cited raising funding that covers full costs
"The social sector is in flux, with many organizations moving beyond 'crisis mode' but still facing an uncertain future," said Antony Bugg-Levine, CEO of Nonprofit Finance Fund. "Nonprofits need access to the right kinds of resources to allow them to adapt and meet their missions. Relying on business-as-usual approaches from government contracts and private donations is not going to sustain the social system in the long term."
Funders routinely cover only a portion of full costs of the programs they intend to support:
- Of organizations receiving each type of funding, 70% report that the Federal government never or rarely pays for the full costs of delivering services; 68% say state government never or rarely pays for the full costs of delivering services; 47% report that foundations never or rarely cover these costs.
- While 89% of nonprofits are asked to collect data to capture the effectiveness of programming, 68% of funders rarely or never cover the costs associated with measuring program outputs or outcomes.
"Nonprofit Finance Fund's survey continues to highlight the need for nonprofits to diversify funding sources in order to deliver much-needed services in communities across the country," said Kerry Sullivan, president of the Bank of America Charitable Foundation. "We hope the survey helps inform nonprofits and funders alike on the challenges facing the nonprofit sector and the imperative for honest dialogue to help these vital partners deliver on their mission and support the needs of the communities we serve."
Nonprofits are navigating a time of immense need and change, while pursuing ways to build long-term sustainability and viability.
- 74% are collecting data that measures how services improve the lives of clients or audience members; this is important as the outcomes-based funding movement gains traction.
- 51% collaborated with another organization to improve or increase services offered.
- 44% hired staff for new positions.
- 33% upgraded hardware or software to improve service or program delivery.
- 29% conducted long-term strategic or financial planning.
"Our work providing thousands of foster children with volunteer Court Appointed Special Advocates (CASAs) requires a significant, ongoing investment in marketing and public relations to attract volunteers – areas that funders often avoid supporting," said Anne Farrell, Chief Philanthropy Officer at Voices for Children in San Diego. "Cuts in government funding have led to changes in the way we raise funds; we are continually pursuing new and expanded private philanthropy from all sectors and are trying to build new funding partnerships. Our goal is to provide CASAs to as many children in need as possible."
Full survey results, along with an interactive survey analyzer and a look at trends over the past seven years, are available at: www.nff.org/survey.
About Nonprofit Finance Fund
Nonprofit Finance Fund (NFF) unlocks the potential of mission-driven organizations through tailored investments, strategic advice and accessible insights. Founded in 1980, NFF helps organizations connect money to mission effectively through established and innovative approaches to social sector finance. A leading community development financial institution with over $300 million in assets under management, NFF has provided $575 million in financing and access to additional capital in support of over $1.5 billion in projects for thousands of organizations nationwide. NFF is headquartered in New York City and serves clients from five offices across the country.
SOURCE Nonprofit Finance Fund