The Atlanta Journal-Constitution
Nonprofits both important andat risk
Pandemic, economic turmoil place greater demands on groups.
National Philanthropy Day, or NPD, is celebrated every Nov. 15. It is part of a larger recognition of November as National Philanthropy Month. It is a day set aside to recognize the important role that nonprofits play in our society, as well as the great work of those donors that fund them.
This year, Atlanta celebrates NPD on Thursday. Nonprofits have never been more important to this country, nor faced greater jeopardy than they do right now.
People in other nations, especially EU nations, often struggle to understand the
U. S.’ s nonprofit sector. In many of their nations, the governments simply pay for and provide the services that our nonprofits provide. There are multiple reasons for this. Most of the historic European countries were smaller, so it was easier to provide those services centrally than it is in the United States. In addition, many of those countries saw their infrastructures and institutions ravaged by two world wars, so their governments had to take on those services while rebuilding.
The fact the U. S. largely came through the 20th century unscathed by war is precisely why the government does not provide those services. It is often cheaper and more efficient for nonprofits to provide those services, as they can be smaller, more nimble and more specialized.
The sector is hugely important in this country. According to the National Center for Charitable Statistics, there are more than 1.5 million nonprofits here, ranging in size from small volunteer- run operations to large, multinational organizations and foundations.
Philanthropy is big business in the United States, accounting for about 12.3 million jobs, or 10.2% of U. S. privatesector employment, and contributing nearly $ 1 trillion to the economy each year through the generosity of their donors, contributors and supporters.
The combination of the COVID- 19 pandemic and the resulting economic turmoil means that those organizations are being called upon to do more than ever. ( The National Bureau of Labor Statistics reports that 57% of all nonprofit workers are in health care alone.) Yet, because of those same issues, nonprofits have never had to work harder to survive.
A July report by Deloitte’s Monitor Institute projects that a contraction in the U. S. nonprofit sector is coming, ranging from 10% to 40%. Other estimates project as many as 50% of nonprofits could go out of business in the next two years. Organizations that aren’t well- endowed or don’t have a significant cash reserve are facing hard questions about survival. The organizations that will survive the coming years are the ones that have great leadership and are engaged in strategic planning now.
At Our Fundraising Search, we advise clients every day on their post- pandemic fundraising ( PPF) plans. Revenue planning and generation are the keys to survival. Fortunately for our clients, we are able to help them plan that survival strategy. However, we are able to serve only a fraction of the need out there. We too anticipate that many organizations may not survive the coming year.
There is a misconception that running a nonprofit is easier than a for- profit. It is not; it is actually a good bit more challenging. For- profit companies have much clearer success metrics than nonprofits. They also tend to have more professionalized back- office operations and better experienced and connected boards of directors.
The nonprofits that will successfully navigate this storm are the ones that are not expecting things to “go back to normal.” These organizations will be realistic about their economic prospects, scrutinize every component of the business and strategic plan, and have a clear vision for how they are going to sustain revenue in the coming year. This is not the kind of crisis that an organization can survive by just cutting costs.
It takes something special to work for a nonprofit. People don’t go into the field for the pay; they go into it to make a difference in the lives of others. Similarly, it takes something special to support a nonprofit. In many ways, donors are great, unsung, patriotic heroes — people behind the scenes who fund the services the country needs but cannot find the political will to pay for. On National Philanthropy Day, we want to thank everyone who takes up that challenge. If you know someone who works for a nonprofit or is a donor to one, thank them today. They are facing a harsh and uncertain world.
How can you be part of NPD? Find a nonprofit organization that works in a field you are passionate about, and give them a few bucks to thank them. You’ll be surprised how good it feels. Then, teach your kids to do the same.