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Non-profits and the economy

Non-profits and the economy. Jacob O’Brien Erica Hardee Lauren Kelley Natasha Ramjas Josh Stefano. Why this current issue?. Why this current issue?.

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Non-profits and the economy

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  1. Non-profits and the economy Jacob O’Brien Erica Hardee Lauren Kelley Natasha Ramjas Josh Stefano

  2. Why this current issue?

  3. Why this current issue? “The severity of the current financial crisis compounded by two wars, a crumbling infrastructure, escalating health-care costs, an emerging entitlement wave, and massive government debt—make most forecasts range from merely pessimistic to gut-wrenching.” - Paul Schmitz, Nonprofit Quarterly (11/7/08)

  4. The issue • Widening gap between need and resources threatens the sustainability of the nonprofit sector • The potential effects the sector’s downfall are monumental

  5. Quote for somebody?? • “The stock market is in free fall, financial organizations are being bailed out and the Detroit automakers may yet get financial help from Washington. But what about those of us in the nonprofit world? Where's our bailout?” - Los Angeles Times (12/1/08)

  6. Does Size Matter? What Percentage of Nonprofits have a budget of over $1 million? • 54.6% • 67.5% • 77.3% • 93.6% With such small budgets to work with, a declining economy can really hurt NFP’s

  7. Together We Can Buy Some Islands in the Caribbean (for the needy of course) If the Nonprofit sector was a country, it would have the ____ largest economy in the world according to GDP data. • 7th • 13th • 21st • 32nd Canada sits at 9th!

  8. Don’t underestimate the size of the Salvation Army! The Nonprofit workforce consists of 10.5% of America’s workforce, or more than ___ Million people. • 6 • 9 • 14 • 12 NFPs contribute more than $322 billion in wages to the American economy

  9. The Economy’s Strain on NFPs • Resources are down significantly • The communities needs for services are increasing

  10. The Check’s In The Mail… • Corporate donors gave $15.7 billion last year • This year many donors are pulling back, including Wall Street banks • Bear Stearns, Lehman Brothers, Merrill Lynch, and Fannie Mae and Freddie Mac all folded or were bough out eliminating donations • Wealthy individuals are also slowing donations

  11. A Not-So-Solid Foundation • Foundations have lost 30% of value in assets or $200 billion since market’s peak Oct 2007 • Many plummeted from endowments heavily invested in faltering stocks • AIG’s former CEO Maurice Greenberg’s two foundations tanked due to heavy investments in company stock • Must borrow from banks and cut budgets to fulfill multi-year commitments

  12. Trouble In The Workplace • Decreases in donations are forcing NFPs to layoff many employees • ALA – 15% layoffs • Susan G Komen – 16% layoffs • Focus On The Family – 18% layoffs • American Institute for Cancer Research – 20% layoffs

  13. Trouble In The Workplace • On average NFPs are eliminating 17% of their positions to meet budget deficits • 17% of 14 million = 2.38 million people • Layoffs are occurring at a time when service needs are increasing, further straining NFPs

  14. Hey! Florida is Part of the Club! • Nearly 41 states are looking at budgetary shortfalls in 2009 or 2010 • This could eliminate government support

  15. Survey Says • 7th annual Guidestar Nonprofit Survey • 2,927 participants in all areas of the country, of all sizes and missions • 35% saw decreases in donations in first nine months of 2008 • Compared to 19% last year • 64% saw increases in demand for services • Rising unemployment • More people uninsured, hungry, in foreclosure or homeless

  16. Adding Insult to Injury • Nonprofits are left with no way to handle increasing needs due to budgetary constraints • Shelters cannot support growing number of homeless and hungry • Hospitals are closing – Shands Healthcare –Gainsville suffered a $12 million loss • Hotlines for domestic violence are seeing increases from 20-40% in calls and a shortage of operators

  17. Management actions • Actions to help minimize economic impact: • Raise organization awareness and public profile • Know where your money is • Diversify revenue streams • Use “Kaleidoscope” thinking • Keep up on trends • Focus the mission, focus the message • Keep those you know close • Get your board involved

  18. Elected Officials • Minimize impact through: • Creation of new programs • Example: Governor Arnold Schwarzenegger • Established a cabinet-level secretary of service and volunteering • Passing new congressional bills • GIVE Act • Fair Deal for Volunteers Act • Lobbying • Non-profit’s budgets • Legislation

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