Posted on April 25, 2006

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Nonprofits Face Barriers to Investment Capital, Study Finds

Although nonprofits face a growing need for investment capital, most report widespread obstacles to accessing it, a new survey from Johns Hopkins University's Listening Post Project finds.

The report, Investment Capital: New Challenges for American Nonprofits, surveyed nonprofit organizations in five broad fields — children and family services, community and economic development, elderly housing and services, museums, and theaters — and found that technology topped the list of investment-capital needs for more than 90 percent of the responding organizations. However, only 37 percent of those organizations reported success in raising needed capital. Similarly, 80 percent of organizations reported needs in the program development area, while only 25 percent reported success in raising needed capital.

When asked about accessing large pools of investment capital, such as insurance companies and pension funds, an overwhelming number of respondents — 94 percent to 99 percent — reported either a complete lack of knowledge about these sources or a significant degree of difficulty in securing capital from them. And though other sources of capital, such as banks, foundations, state or local government, and individual donors, were more familiar to nonprofits, many respondents reported difficulty in accessing them as well.

"We have long been accustomed to thinking of nonprofits as labor-intensive institutions. But their need for investment capital to finance technology, facilities, and program development has grown massively in recent years," said Lester Salamon, director of the Center for Civil Society Studies at the Johns Hopkins Institute for Policy Studies, which oversees the Listening Post Project. "Unfortunately, however, we know very little about the challenges nonprofits face in generating this investment capital."

To read or download the complete report (16 pages, PDF), visit: http://www.jhu.edu/listeningpost/news/pdf/comm05.pdf.

“Nonprofits Face Obstacles to Accessing Investment Capital.” Nonprofit Listening Post Press Release 4/24/06.

Primary Subject: Philanthropy and Voluntarism
Location(s): National

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