A Wild 2010 Ahead, Too

The National Council of Nonprofits, the national umbrella of the NY Council of Nonprofits, offered the following information about 2010 challenges.

"Governments in Crisis"
The Chronicle of Philanthropy just published its forecast of the Top 10 issues nonprofits will face in 2010. So what does the Chronicle see as the nonprofit sector's most pressing issue? "Governments in Crisis." The Chronicle identified the following trends behind this top issue: state spending cuts, the end to stimulus money, and county and local budget crunches, all of which add up to "more cash-strapped local [and state] governments may try to seek money from nonprofit groups." The article quotes the President of the National Council of Nonprofits, who advised: "Leaders of nonprofits must get engaged in the policy process because this problem is not going away."

New Tool: Treasure Trove of Data
To help make their policy arguments, nonprofit leaders should become familiar with a fresh report issued by the Congressional Research Service, entitled "An Overview of the Nonprofit and Charitable Sector" (R40919; November 17, 2009). This new report contains a variety of gems that nonprofits can use to help state and local policy makers, journalists, grantmakers, and the general public have a better understanding of the nonprofit sector, including:

• The "significant" role nonprofits play in the U.S. economy: "the charitable sector is larger than the construction industry" and "larger than the finance and insurance and real estate industries combined. [page14]
• Nonprofit organizations actually pay many taxes. For instance, "tax-exempt organizations are subject to tax on income from business activities unrelated to their exempt purpose. … Additionally, tax-exempt organizations must generally pay the same employment taxes (i.e., withhold income and payroll taxes of their employees) as for-profit employers." [page 3]
• Sector-wide, private contributions (from individuals, corporations, and foundation) account for only 12% of nonprofit revenues, with earned income/payments for services (49%) and government grants and contracts (29%) being much larger. [page 17]
• "Another major pressure on nonprofits during the recession has been the decline in support by governments (primarily state governments), including delays in payments. A recent survey of nonprofit organizations found that 35% have experienced a loss in government support while 37% reported experiencing delays in government payments." [page 30]
• "[N]onprofits continue to feel the pressures of increased demands for their services coupled with decreasing revenue. More than a third of nonprofits have had to cut operations." [page 34]
• "Overall … it appears that governments, particularly state governments, may be contributing to the financial difficulties of nonprofit organizations, even to the point of not paying for contracted services." [age 35]
• "In the recent economic crisis, states reduced funding to nonprofit … organizations and in some cases were delinquent on payments. … If there were a spotlight on states' behaviors, especially states not making their contract payments on time, they might be less willing to address their short-term cash-flow problems in this manner." [page 54]