NONPROFITS ARE STRUGGLING TO SERVE MORE PEOPLE WITH FEWER RESOURCES, MARKS PANETH SURVEY REVEALS
December 16, 2016(NEW YORK, NY-- December 13, 2016) - Nearly 75% of nonprofits report having experienced reductions and/or significant delays in funding during the past year, according to the most recent edition of Nonprofit Leadership Pulse, a national survey of nonprofit leaders and executives undertaken by leading accounting, tax and advisory firm Marks Paneth. This erratic cash flow makes it challenging for nonprofit organizations to cover overhead costs, leaders say. In fact, one-third of organizations surveyed have had to dip into cash reserves to make ends meet, and more than 28% ended last year with a deficit.
While timing for funding may be unreliable, demand for services is up and many nonprofit organizations are struggling to serve more people with fewer resources. Over half (52%) have experienced increased demand for programs and services, and almost half (48%) have expanded their services to meet that demand. Not only are organizations now serving more clients than ever before, but they are also offering more services per client and—as demographics change—expanding services to new target populations.
In spite of efforts from nonprofit leaders to close the funding gap, nearly one-third of the organizations surveyed say they are still unable to meet the increased demand for services. Unfortunately, 55% of nonprofit leaders expect conditions to become more difficult in 2017.
“When demand for services grows, but funding declines, nonprofits find themselves stuck in a perpetual crisis mode,” says Michael McNee, Partner-in-Charge of the Nonprofit and Government Group at Marks Paneth. “It is more than just logistics and finance—it is an emotional rollercoaster. There is a clear struggle between reliable funding and the need to support increasing demand, and the effects are real.”
Another troubling trend revealed by the survey: turnover is high. Sixty percent of organizations surveyed experienced staff turnover in the past 12 months, and 17% were forced to lay off staff. More than one-in-five experienced a change in executive leadership, and nearly one-in-ten lost at least one board member.
Organizations are clearly trying to do more work with fewer hands—a challenge made more acute given that few nonprofits have ever had a problem with overstaffing. The majority of organizations surveyed employ fewer than 100 people.
“The result is nonprofit fatigue,” said Sibi Thomas, a partner in the Nonprofit and Government Group at Marks Paneth. “While the demands of the nonprofit world can be invigorating, everything can seem so critical that it is hard to prioritize what needs to be done. Sometimes leaders need to step back, review the mission, the demand for services and the resources at hand—and then make the tough choices”.
The survey suggests that reviewing the organizational structure, operations and leadership model can reveal opportunities to increase efficiency and reduce the workload.
To receive a copy of the Nonprofit Pulse and/or to speak with a leader from Marks Paneth’s Nonprofit and Government Group, please contact John McKenna of ICR LLC at 203.682.8252 or john.mckenna@icrinc.com.
Methodology
The Nonprofit Pulse: A Leadership Study from Marks Paneth represents the findings of a survey of nonprofit leaders in the United States. The 371 nonprofit sector leaders participating in the research include Board Chairs, Presidents, Executive Directors, Chief Executive Officers, Chief Financial Officers and Treasurers working in a wide range of organizations within the nonprofit sector.
The research employed self-administered questionnaires completed online by respondents. Marks Paneth, the research sponsor, supervised development of the survey questionnaire and Business Research Solutions managed the research project. Interviews were completed during late August and early September, 2016.
About Marks Paneth
Marks Paneth LLP, a premier accounting firm dating back to 1907, is ranked the 34th largest accounting firm in the nation and one of the 8th largest in the Mid-Atlantic, as reported by Accounting Today and Inside Public Accounting. With a team of nearly 700 people, including more than 80 partners, based out of offices throughout the Mid-Atlantic Region, Marks Paneth provides public and private businesses with a full range of audit, accounting, tax, consulting, trade remediation and valuation services, as well as litigation and financial advisory services, to domestic and international clients. The firm serves clients in a wide range of industries including real estate; hospitality; manufacturing, wholesale and distribution; retail; media and entertainment; nonprofit and government; financial and professional services industries; and high-net-worth individuals and their families.
The firm has a strong track record of supporting emerging growth companies, entrepreneurs, business owners and investors with highly specialized services as they navigate the business life cycle. Readers of the New York Law Journal ranked Marks Paneth as one of the area's top three forensic accounting firms for six consecutive years.
The firm also provides information technology consulting services to small and medium-sized companies and nonprofit organizations through its subsidiary, Tailored Technologies, LLC.
Marks Paneth’s membership in Morison KSi Ltd., a leading international association for independent business advisers, financial consulting and accounting firms, facilitates service delivery to clients throughout the United States and around the world.
Marks Paneth is headquartered in New York City, with additional offices in New York State, New Jersey, Pennsylvania and Washington, DC. For more information, please visit markspaneth.com.
