Region’s Nonprofits Lag in Economic Recovery

Posted by La Salle University on June 8, 2015

LaSalle study: Nonprofits still hurting from recession

While experts agree that the most recent recession is officially over, more than half of nonprofit organizations in the greater Philadelphia region indicate that they have experienced little or no economic recovery, according to a recent survey of local nonprofit executive directors conducted by The Nonprofit Center at La Salle University’s School of Business.

In a survey of 231 nonprofit leaders conducted over this past winter, only 5.2. percent reported a “great degree” of economic recovery, with more than three times that amount (17.3 percent) reporting no recovery at all. Only 23.3 percent indicated a “good degree” of recovery, while 54 percent rated their recovery as slight or more than slight, but less than good.

While the region’s arts and culture organizations have been hard hit by cutbacks from traditional funders, such as the William Penn Foundation, the survey shows that those organizations are doing slightly better than the rest of the nonprofit sector.

Fall-out from this slow recovery is the negative impact it has on nonprofit leaders, 59 percent of whom report feeling “stressed,” “exhausted,” and “anxious and worried,” according to this survey.

There is some good news in the survey’s findings. Among the sources of reported economic recovery are an increase in individual giving, reported by 75.6 percent of respondents.

“One positive outcome of the economic hit nonprofits have taken is that they’ve recognized the role that individual donors play in their organizations’ futures, reducing dependence on a single source of funding such as government or foundation grants,” said Laura Otten, Ph.D., director of The Nonprofit Center and author of the survey.

Although the reporting statistics don’t support a strong recovery, there appears to be a greater sense of optimism in some of the results. When asked to compare their organization’s current operations in six different areas with how they saw themselves in 2008, the vast majority of respondents said they were “doing much better than in 2008.” When coupled with reported staffing levels that were worse or the same as in 2008, while experiencing a ‘slight to much greater demand’ for their services, “I can only speculate that this positive attitude may be attributable to the overall general public’s belief that the recession is over and the country is rebounding, or perhaps the emotional need to try to project positiveness to cope with the pressures of the job,” Otten said.

The survey also looked at how well prepared nonprofits are for the inevitable departure of the current executive director. “An executive transition is one of the most pivotal moments in an organization’s life, yet the majority of nonprofits we encounter continue to be unprepared,” Otten said. Almost two-thirds of respondents still have no succession plan for either a planned or unplanned departure of the current leader. “With more than 58 percent of respondents expressing negative feelings about their roles in their organization, using words like ‘exhausted, stressed and anxious,’ the failure of nonprofit boards to proactively address succession planning in their organizations continues to distress and alarm us,” Otten said.

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