Jose M. Peralta
PA571 – Nonprofit Organization Management
February 18, 2011
The Future of Non-Profits
“The once-booming nonprofit sector is in the midst of a shakeout, leaving many Americans without services and culling weak groups from the strong. Hit by a drop in donations and government funding in the wake of a deep recession, nonprofits—from arts councils to food banks—are undergoing a painful restructuring, including mergers, acquisitions, collaborations, cutbacks and closings” (Banjo and Kalita, 2010). The article quotes Diana Aviv, chief executive of the Independent Sector, "Like in the animal kingdom, at some point, the weaker organizations will not be able to survive." What will the future of nonprofit look like ten, twenty years from now? With budget cuts from the state and federal government, lowered donations from private industries and citizens the outlook looks bleak unless some drastic changes are accomplished in the immediate future. Combined with the long hours, low salaries, long hours and burn out due to the never ending to do lists plaguing non-profits throughout the nation has caused people to leave non-profit jobs before the move up the non-profit ladder and taking executive positions (Kumar, 2008). “The nonprofit sector has experienced rapid changes in its composition, size, values, nature and finances over the past few years. The transformation can be expected to accelerate in the two r three decades. Yet its practitioners and researchers have done little or nothing to anticipate and prepare for these development” (Eisenberg, 2005, p.81). Eisenberg was correct in his assessment of nonprofit agencies and his words rang truer when the recession of 2007 struck and the financial sector of the United States collapsed. The free spending and loaning days of banks disappeared and a new age of saving and frugality became the anti-thesis of the nonprofit agency. Combine that with the falling United States’ and world economy, the stricter rules for loans and lowered donations by individuals and corporations has placed the nonprofit world in a bind to survive. Today’s nonprofit world has to adapt to the new United States. Governmental cuts affecting many as corporate America is bailed out, corporate America recovering from their losses and cutting back on the excesses they lived by before the recession have affected nonprofits. Learning new ways to become effective community assets while thriving and advancing are difficult tasks for today’s nonprofit organizations. As state and federal budgets scale back and look for new areas to cut, nonprofits took a brunt of the hits, directly or indirectly. Cuts in how much donations will be tax exempt, lowered donations due to the tax exemption offered to donors. Less donations by individual and corporate America has lessened the amount of money nonprofits were accustomed to in the past. The recession and other actions impacted nonprofits and have made new nonprofits harder to thrive and older, poorly ran nonprofits hard to survive. Barriers
The biggest barrier affecting nonprofits is the economic barrier that was formed when the economy took a quick dip during the recession that encompassed the United States and the world in late 2007, early 2008. With the economy at a standstill and most times plummeting to unfathomable levels, nonprofits felt the brunt of it when it came time for corporate, federal and state governments were handing out donations. The economy at the time dictated that donations had to be scaled back, and for some organizations taken completely away in order to offset the losses and fight the downtrodden economy. “The nonprofit sector has experienced rapid changes in its composition, size, values, nature and finances over the past few years. The transformation can be expected to accelerate in the two r three decades. Yet its practitioners and researchers have done...