Nonprofits Struggling

Nonprofits across the country, especially those funded largely by government, are struggling to stay afloat, and it points out—once again—the importance of establishing and sustaining a viable individual donor base; as that is the only sure harbor in rough weather.

An article from the Wall Street Journal examines the situation.

An excerpt.

“Hearth, a Boston-based nonprofit, has a mission of helping people like Yvonne Rock find housing and medical care.

“Ms. Rock, a 59-year-old former mental-health counsellor, has been diagnosed with terminal lung cancer and can no longer work. After nearly a year on Hearth's waiting list for an apartment, she still has nowhere to live.

“But Hearth is badly in need of charity itself. The group lost $325,000 in government contracts last year, laid off five employees and cut managers' pay. Its plans to add housing units are stalled because it hasn't been able to raise the final $600,000 from private donors to qualify for matching government funds. Yet Hearth is receiving more applications for housing than it can process.

"We've had funding cut after funding cut, and we never know when the next shoe is going to drop," says May Shields, Hearth's chief operating officer.

“The story is the same across the country. 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.

"Like in the animal kingdom, at some point, the weaker organizations will not be able to survive," says Diana Aviv, chief executive of Independent Sector, a coalition of 600 nonprofits.”