Light on Nonprofits

Paul Light is one of the more astute observers of the nonprofit sector and his recent article in the Washington Post examines the current winnowing of the sector—especially among small grassroots organizations—resulting from the tightening of government funding which all too many of the small groups are dependent on.

An excerpt.

“The nation's nonprofit sector is a leading indicator of economic collapse and recovery. It tightens first as anxious donors hold onto their dollars, and rebounds last as anxieties finally fade.

“In between the starts and stops, the sector bears the brunt of increasing demand, budget cuts and delayed payments. Reserves begin to disappear, credit lines evaporate and volunteers become clients. Asked to do much more with far less, many nonprofits end up trying to do almost everything with nothing.

“The nonprofit sector is not about to disappear, of course. It's a major industry in its own right with 11 million employees, 63 million volunteers and $1.5 trillion in annual income.

“Nevertheless, there is growing evidence that many nonprofits closed their doors over the past three years, while others are about to do so. In 2008, I estimated that 100,000 of the nation's 1 million tax-exempt nonprofits could go under during the recession. Those exits may or may not be offset by the creation of new nonprofits, but there seems to be little doubt that much of the deforestation is now occurring in low-income communities where service deserts are swallowing up thousands of relatively small community-based organizations. If we could map decimation by census tracks, we'd see the deserts popping up in all the familiar neighborhoods--the ones where the most vulnerable Americans live.”