May 11, 2014; Marin Independent Journal
According to a study in Marin, nonprofits in that community have not yet recovered from the effects of the recession, exhibiting a now-familiar constellation of symptoms. The Center for Volunteer and Nonprofit Leadership revealed the findings last week at a local conference.
Maureen Sedonaen, the CEO of Goodwill Industries of San Francisco, San Mateo and Marin, and chairwoman of CVNL’s board summed up the tense economic state of many nonprofits with this:
“Anyone here who is running a nonprofit feel like your budget next year is sewn up, you’re good, you’re ready to go? No, you’re trying to close this fiscal year; you’re looking at next year; and you’re holding your breath pretty tightly.”
According to the study, the field of nonprofits saw a surge before and in the beginning of the recession, only to be followed by a drop:
- Between 2005 and 2010, Marin added 267 nonprofits.
- But 138 Marin nonprofits disappeared between 2010 and 2011—a drop of 9 percent—and subsequently more have disappeared.
- Today, there are 1,543 nonprofits operating in Marin, with more than half operating on annual budgets of less than $100,000.
- In 2013, 33 percent of the Marin nonprofits surveyed said they were projecting a deficit at the end of the fiscal year, compared with 21 percent who said they were projecting a year-end deficit in 2008. And 26 percent of respondents in 2013 reported that their organizations lack a financial reserve.
- Seventy-seven percent of respondents reported seeing an increase in service demand since 2008 and just under half reported having a waiting list for services.
One of the six recommendations made in the study is that “consider supporting infrastructure or general operations for nonprofits, not just specific programs.”
Dan Markin, executive director of the Dance Palace Community and Cultural Center in Point Reyes Station, said that highlighting this issue was very important, in that insufficient general operating support “has made this economic recession worse for the nonprofits and destabilized nonprofits.”
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And while this is true everywhere, the issue may feel a bit more acute in Marin, since right before the recession started, the Marin Community Foundation announced that it would reduce the proportion of grants spent on general operating support from 70 percent to 50 percent while at the same time upping their grants to new initiatives.
This cutting of general operating grants right before the recession may have had an effect disproportionate to the dollars involved, since unrestricted dollars are critical to most agencies when they have to respond to sudden cuts. In any case, local nonprofits took the opportunity of the study to express dissatisfaction with the community foundation, which was one of the funders of the study. The study mentions that the foundation is working on a strategic plan and that participants may have seen this as an opportunity to provide input.
Marin Community Foundation chief executive Thomas Peters expressed surprise at the sentiment. “Any fair look at the distribution of our Buck Trust resources in Marin County would show that 85 to 90 percent of the money goes to individuals and families who are struggling…I think some of this gets off into semantics. All we did there was to sharpen our focus with the grantees on the services that we wanted to fund.”
NPQ would like to weigh in a bit to say that the difference between general operating money and special initiative money, even in the same organization, is vast. The first provides badly needed flexibility in times of stress; the second locks you into programs that, in that same time of stress, may move down on the priority list. The timing may have heightened the effects of the community foundation’s shift, but the foundation may need to listen more closely in its planning to the realities still being experienced by local groups. —Ruth McCambridge