Posted on June 11, 2009

New York City Nonprofits Staggered by Downturn

Faced with steep declines in city, foundation, and corporate support, many of New York City's 25,000 nonprofits are scrambling to find ways to appeal to donors, cut costs, and identify new sources of revenue, Crain's New York Business reports.

Over the past year, New York City nonprofits have reported drops in income of between 10 percent and 70 percent, resulting in "the worst crisis for nonprofits in twenty-five years," said Rockefeller Philanthropy Advisors president and CEO Melissa Berman. Arts and advocacy groups have been hit the hardest, notes Crain's, in part because many donors view the activities of such organizations as less essential during tough times. But even social-services groups, many of which have seen demand for their services spike, are feeling the crunch. The Metropolitan Council on Jewish Poverty, for example, has seen demand at its food pantries jump by 30 percent this year, even as it has struggled to raise private money to offset government funding cuts of $1 million.

Indeed, in an effort to survive what some are calling the Great Recession, many nonprofits have recalibrated their fundraising strategies by, for instance, giving up direct mail campaigns in favor of online fundraising efforts or focusing on cultivating existing donors rather than reaching out to new ones. At the same time, organizations are cutting every cost they can by toning down or scrapping once-lavish fundraising galas and looking for new, less expensive ways to deliver programming. Other groups, including the Brooklyn Academy of Music, have even started renting out unused space.

Even so, some nonprofit leaders have said that many of the new approaches they're trying could outlast the recession. "There are lessons to be learned from this economy," said Center for Urban Community Services executive director Tony Hannigan, who is trying to slash the cost of his group's fall gala by 30 percent. "We're working hard to limit costs, and I was saying to myself, "Why weren't we doing this anyway in the past?'"