Anecdotes ≠ Data. And Yet . . .

September 28, 2009

The deepest economic recession of the century may be technically over, at least according to Federal Reserve Board chairman Ben Bernanke, but the jobless recovery it has produced continues take its toll on the nonprofit sector. The good news is that there appears to be less damage thus far than anticipated. There is still plenty of anxiety about balance sheets, a double-dip recession, and inflation, but the anecdotes suggest that most nonprofits are still holding on despite the odds.
The bad news is that many nonprofits appear to be holding on by exhausting reserve funds, borrowing against the future, deferring maintenance, slashing benefits, and imposing downsizings, hiring freezes, and pay cuts. Largely ignored during last year’s bailout party in Washington, nonprofits have been left to save themselves. The lack of any government response to the sector’s fiscal calamity appears to reflect a quiet agreement that there are just too many nonprofits out there. If the crisis pushes some nonprofits to the brink of failure, so be it.
No one knows just how much damage has been done over the past two years, however, nor what might happen in the coming months. After all, the plural of anecdote is not data. Yet the anecdotes are deeply troubling nonetheless, especially when they are assembled into long lists of horror stories.
Moreover, survey after survey shows deep anxiety, shrinking margins, delayed payments, and occasional liquidations. Facing unrelenting increases in demand, especially in the social services, most nonprofits are doing what they do so well under stress—exploit one of the best workforces in America. Driven by the chance to accomplish something worthwhile for their communities, country, and world, nonprofit employees remain willing to give whatever it takes to deliver the mission. Wind ‘em up and they will take a pay cut.
Tomorrow: "Four Futures" revisited.

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Paul C. Light


Nov 14

Join Professor Joel Fleishman and the Executive Vice President for Program at the Ford Foundation, Hilary Pennington - for the Foundation Impact Re