Philadelphia Nonprofit Survey Shows Demand for Services Rise Along with Deficits

PHILADELPHIA--(Business Wire)--
Twice as many nonprofits are headed for a deficit this year as last year while
nearly seven in 10 report increasing demand for their services. These are two
troubling findings in a recent survey of the region's nonprofit organizations
conducted by The Nonprofit Center at La Salle University`s School of Business.

The 185 respondents to the online survey, conducted earlier this month, reported
both decreases in funding and dramatic increases in demand for services.

"More than half (57 percent) said their current fiscal situation is worse than
it was a year ago," said Laura Otten, Ph.D., director of The Nonprofit Center,
who wrote and tabulated the survey, "while 65 percent have already experienced
an increase for services in the same period."

Decreases in funding are already taking their toll, Otten found, the most
notable of which is a 59 percent decrease in donations from individuals. "This
is very significant," she said, "because the vast majority of philanthropic
support comes from individuals. It`s also in sharp contrast to past economic
downturns where individual gifts continued to hold steady," she added.

Otten is further concerned about these findings because the majority of
respondents (65 percent) that indicated they are in worse shape this year than
last are more than 20 years old. "If well established organizations are so hard
hit," Otten asked, "what does that mean for newer groups that are still finding
their way? What does the future hold for them?"

Other key findings include:

* 39 percent of nonprofits surveyed said their have already reduced or frozen
salaries with 49 percent considering same in the next 12 months
* 26 percent have had to reduce the scope of a service while 40 percent are
considering it
* 44 percent of nonprofits have only enough cash reserves to cover two to three
months of operation while only 15 percent have enough to get beyond the next six
months

According to the study, nonprofits have been forced to take such negative
actions as dipping into reserves (37 percent), layoffs (22 percent), and
eliminating an entire service or program (13 percent). The next six months will
see those numbers rising with 35 percent anticipating having to dip into their
reserves, 32 percent laying off staff, and 28 percent eliminating programs.

Respondents also indicated ways that their situations could be abated, with the
majority, 64 percent, saying a stronger board of directors is key, 56 percent in
need of marketing assistance, 44 percent needing diversity in their fundraising
and 43 percent desiring strategic planning.

"One of the results that we hope will come from this survey is that nonprofit
boards of directors will step up and meet their responsibilities as fundraisers
and strategic thinkers for their organizations," Otten said, "because so far
they are not fulfilling those expectations." According to the survey, only 25
percent of individual nonprofit board members have stepped up their fundraising
activities or personal giving in response to the economic strains their
organizations are experiencing and only 16 percent have asked for budget cutting
scenarios.

"Equally disturbing," Otten said, "is that one-quarter of boards continue to
operate in `business as usual` mode, taking no action to address the current and
future situations."

A full report of survey results is available on The Nonprofit Center`s website
at: http://www.lasallenonprofitcenter.org/news/

The Nonprofit Center at La Salle University`s School of Business helps
strengthen nonprofit organizations throughout the Delaware Valley so they can
better serve their constituents. Through comprehensive educational programs,
leadership development, training and consulting services and an information and
referral network, the Center`s team of experts has been working with thousands
of organizations since 1981 to enhance their ability to govern, manage and
perform more effectively in a competitive environment.

The Nonprofit Center at La Salle University`s School of Business
Joan Mintz Ulmer, 215-951-1710

Copyright Business Wire 2009