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Nonprofits expecting better year

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Last year was another difficult one for Washington area nonprofits as many took in fewer dollars and had to eat more into their rainy-day reserves, but according to a new study, there’s reason to believe the tides may start to turn in 2012.

Nearly half (46 percent) report that their donors have expressed plans to maintain or increase contributions this year, compared with 27 percent last year and only 15 percent in 2009, according to a report released Monday by the Center for Nonprofit Advancement. The group surveyed nonprofits in the District, Northern Virginia and Montgomery and Prince George’s counties in Maryland.

“We certainly hope to see that come to fruition,” said Glen O’Gilvie, the group’s chief executive. “I believe the community at large is starting to realize how the challenges our nonprofits are facing are having a direct impact on the key areas we all want to be vibrant, like public safety, education and health care, and they’re digging deep to support these organizations.”

There were other glimmers. The number of groups that tapped into their operating reserves dipped from 46 percent to 31 percent in the latest report, and those reporting a significant decline in revenue dropped from 48 percent to 40 percent.

O’Gilvie said individual donors are leading the comeback, noting that it’s easier for one person to give than for trustees at foundations and corporations to approve expenditures in this economic climate.

However, while the decline in donations appears to be slowing, it’s not enough to account for increasing demand for community services. Last year, more than half (53 percent) of respondents experienced increases in demand for their services as a direct result of the the current economic turmoil.

“Need has gone up so much in the last few years for employment services, emergency food and rent relief,” said Katherine Morrison, interim executive director at Community Bridges in Silver Spring. “So depending on the type of group, even if a nonprofit is holding its own in terms of revenue, that demand can force groups to tap into those reserves.”

Morrison expects to see donations pick up again but remain below the levels enjoyed prior to the recession. Governments are still strapped and too many people are still nervous about the economy.

“This is not the perfect storm for nonprofits, this is environmental change for nonprofits,” she said, paraphrasing recent remarks from Chuck Bean, president of the Nonprofit Roundtable of Greater Washington. Morrison added, “He’s right, there are just too many groups in need of funding and there’s been a change in perception about how much we can afford to support. We’re in a new era for nonprofits.”

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