Nonprofits through the Recession

A few days ago, my dad sent me a link to an article on the status of nonprofits during the recession. I'm not sure if it was meant to make me feel more hopeful that I might yet find a job in the nonprofit sector or to make me feel bad for the failure of the nonprofit that just laid me off. Since it was from my dad, I'm guessing it was probably the former.

Anyway, I found the article, from NewsBlaze.com, quite interesting. The basic gist of it was that while many corporations have been laying people off, nonprofits have, in fact, grown, adding new jobs at an average rate of 2.5% per year between the second quarter of 2007 and the second quarter of 2009, which has apparently been classified as the worst of the recession.

Although many might respond to this information with surprise, I don't find it particularly astonishing for several reasons. First, if a nonprofit is well-run (and sometimes even if it's not), it will secure financing for its programs at least 1-2 years in advance. Many nonprofits try to work on a 3-5 year funding plan. Therefore, an organization working in September 2010 is working off of the funding secured (hopefully) in 2008 or, at the very latest, 2009. If this is the case, then the funding would have dipped in 2007-2009, so nonprofits should really be feeling the pinch now and in the next couple of years.

Second, as the article noted, the stimulus package was designed to funnel money to many organizations, including nonprofits - particularly those that provide services to individuals who were most directly affected by the recession. Such services include, but are certainly not limited to: food pantries and soup kitchens, homeless shelters, after-school programs, and employment services. Due to the recession, the need for these services grew substantially, and many individuals were hired to meet that need. However, the article failed to note the next point: that the recession will recede, demand for services will diminish, and individuals hired at the height of the recession may then be in danger of losing their jobs.

And finally, one thing to keep in mind is the mentality that predominates in the nonprofit sector: do more with less. Take cuts, if necessary, but keep on keepin' on. Do not abandon ship, no matter how much water you've taken on. I have seen organizations that have furloughed the entire staff and yet the work keeps getting done, the employees keep doing it, and the organization stays afloat despite little or no income. I have seen employees work around the clock for weeks and months at a time for a pittance, because they are so passionate about the work they do. This is very different from a corporate mentality, which is more focused on the bottom line and protecting it at all costs. On second thought, maybe it's not so different after all - perhaps it's just a different definition of that bottom line. For corporations, the bottom line is money. For nonprofits (in many cases), the bottom line is the mission.

So, overall, I think that the nonprofit recession is just getting started. I would bet that nonprofit layoffs and shutdowns typically lag behind corporate layoffs and shutdowns. If I were back in school, I might do a study on that...