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How has the Great Recession affected the financial stability of faith-based nonprofits? In 2009 faith-based nonprofits are 2.5 times more likely to be facing declines in cash contributions than in 2007. In fact, only 28% of faith-based nonprofits are expected to avoid a decrease in cash contributions during the span of 2008-2009. These statistics have been pulled from a recent survey and analysis that I completed as the Senior Research Analyst at Excellence in Giving.
So what is the financial landscape for faith-based nonprofits and how are organizations adjusting their budget? In sum, organizations facing financial shortfalls are cutting back program services significantly (74% surveyed). The organizations finding a way to increase cash contributions in 2009 are streamlining operations through reduction in administrative costs (38%). The decrease in administrative costs is being matched 2:1 by the increases to fundraising expenses (80% increasing fundraising budgets).
If an organization has maintained increasing cash contributions in FY07 and FY08, the statistics show that they still only have a 53% chance of continued growth. This financial crunch is forcing many organizations to place strategic plans on hold. Hopefully, the financial restrictions will force faith-based nonprofits to identify their most important programs while cutting ineffective ones.
To read the full report, click on the following link: EIG 2009 Financial Outlook for Faith-based Nonprofits.