Posted on March 22, 2011

Nonprofits Expect Increased Demand for Their Services in 2011, Survey Finds

Although there are plenty of indications the economy is gaining strength, America's nonprofits are expecting 2011 to be another difficult year, for themselves as well as the communities they serve, a new survey from the Nonprofit Finance Fund finds.

Funded by the Bank of America Charitable Foundation, the 2011 State of the Sector Survey (6 pages, PDF) found that 85 percent of the more than 1,900 nonprofit leaders surveyed expect demand for their organizations' services to increase in 2011, while only 46 percent expect to be able to meet that demand fully. Last year, 77 percent of survey respondents experienced an increase in demand for their services, while 51 percent said they were fully able to meet that demand. So-called "lifeline" organizations — organizations that provide critical services to those in need — are feeling especially squeezed, with 87 percent reporting an increase in demand for their services in 2010 and only 43 percent saying they were able to meet that demand; this year, just 37 percent expect to do so.

The survey also found that 60 percent of nonprofits have three months or fewer of cash available and that 10 percent have none.

At the same time, 44 percent of respondents reported that they ended 2010 with a surplus — up from 35 percent in 2009 — while 35 percent raised more than they had projected. In addition, 55 percent of respondents said they added or expanded programs or services in 2010; 49 percent increased the number of clients served; and 47 percent partnered with another organization to enhance or expand their services.

"Years of economic uncertainty have forced nonprofits to adjust to the 'new normal' of scarce resources and increased demand," said Rebecca Thomas, vice president of consulting services at NFF. "Some of the adjustments we're seeing are creative and healthy — such as strategic collaborations to improve impact in a community. Other effects — layoffs, people who need services being turned away, organizations operating at a deficit or with no cash — are further compromising the social safety net at a great cost to America."