Nonprofit Ice Age: Struggle for Survival

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November 8, 2010; Source: Washington Post | How are nonprofits adjusting to the prolonged impacts of the recession? In the metro D.C. area, the Nonprofit Roundtable’s Chuck Bean reports that organizations are making “lasting changes such as shedding nonessential duties, sharing back-office functions, reducing staff size and in some cases merging with other groups.”

Bean suggests that the problem is “less of a storm and more like an ice age.” So how do you survive an ice age? In the real Ice Age, Neanderthals were replaced by Cro-Magnons who had better technology and better survival skills that allowed them to adapt and live through the lengthy climactic disaster. Bean cites that in the past month, four groups have approached him about merging with other groups, which may be an example of the lasting changes that he thinks are needed.

According to the Post, Bean thinks larger nonprofits “have proven to be more resourceful in weathering the downturn.” The Post cites CentroNia, which accessed a big chunk of stimulus money, the Whitman-Walker community health clinic, and the YWCA of the National Capital Area, which profited from selling off some of their downtown Washington real estate as successful examples.

One of the region’s success stories is Volunteers of America Chesapeake, which eliminated a nearly $2 million operating deficit by purchasing cheaper supplies, centralizing operations, and investing in technology. But stimulus money is running out, only a few nonprofits, even big ones, have the luxury of selling off downtown D.C. office properties, and the cost-cutting and efficiency-creating practices of groups like the VOA are going to have to continue to deliver savings for a long time to come because charitable giving and government contracting doesn’t look like it will be on the upswing anytime soon.

Size doesn’t automatically translate to value, leading one to ask, what nonprofit ice age survival strategies do nonprofit networks have in mind for the small groups in the sector?—Rick Cohen