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Posted on June 13, 2008 Massachusetts Nonprofits Overstretched, Underfunded, Report Finds Many nonprofit organizations in Massachusetts are underfunded, overstretched, and vulnerable to cuts by state government, a new report from the Boston Foundation finds. The report, Passion & Purpose: Raising the Fiscal Fitness Bar for Massachusetts Nonprofits (116 pages, PDF), includes recommendations that address significant financial and organizational weaknesses in the state's nonprofit sector as revealed by the study. According to the report, the more than 36,000 nonprofits in Massachusetts together earn $87 billion in revenues and hold more than $207 billion in assets. In addition, the report found that the number of public charities in the state has nearly doubled in recent years, despite almost no growth in the state's population and a slowing economy. After segmenting the state's nonprofits into three categories — "grassroots" organizations with up to $250,000 in annual expenses; "safety net" organizations with expenses between $250,000 and $50 million; and "economic engine" organizations with more than $50 million in expenses — the report's authors examined recent growth patterns in the sector and found that 60 percent of the safety net groups reported surpluses of 2 percent or less and had less than thirty days of cash on hand. Rather than recommending that nonprofits in the state strengthen themselves by raising more money, however, the report's authors urge nonprofit leaders to adopt a new vision of financial stewardship that includes restructuring for cost efficiencies, repositioning their organizations for growth and economic impact, and reinvesting in organizational health and capacity. "What the research tells us is that we need a new nonprofit culture," said Elizabeth Keating, visiting associate professor at the Carroll School of Management at Boston College and one of the lead authors of the report. "This is not an indictment of the sector's leadership — we have talented, committed people driving nonprofits forward. But they are undercut by a culture that sees investment in capacity as a diversion of money from what matters most, which is service." “Boston Foundation Releases Landmark Study of Nonprofit Organizations in Massachusetts.” Boston Foundation Press Release 6/11/08. Primary Subject: Philanthropy and Voluntarism Location(s): Boston, Massachusetts FC012042

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