Appeal to Surveys: Loss of 100,000 or More Nonprofits
Post #4 – Consideration of two surveys as justification for the forecast
In addition to referencing Paul Light’s November 2008 appraisal, the Irvine Foundation report references two surveys to document its embrace of the loss of 100,000 or more nonprofits forecast. Let us consider each in turn:
Footnote 3 cites the report of a survey conducted by the United Way of the Bay Area. The report, in the form of a May 28, 2009 press release [PDF], began, “One third of Bay Area nonprofits are concerned they may cease operations in the next year according to United Way of Bay Area’s 2009 Nonprofits Pulse Survey. Correspondingly, 34% report they have two or fewer months of operating expenses in reserves.”
This survey of nonprofit organizations in 13 San Francisco Bay Area counties was conducted from April 14-27, 2009; I have no doubt that the report accurately reflected the 391 responses received. But 7 months later, what are the implications of these survey results?
I recently spoke with Maria Stokes, Communications Director of the United Way of the Bay Area, to ask whether the extensive concerns of nonprofit failures had been realized over the past seven months. She advised me that the United Way has not conducted another survey and is not aware of widespread failures. This is not to say that things are rosy: nonprofits continue to struggle with declining revenues and increasing demands.
The United Way of the Bay Area has encouraged collaborations among the agencies it funds to help stretch resources and provide help. SparkPoint, an initiative to assist families and individuals create financial plans to reach their goals – rather than simply to provide a ‘hand-out’ – focuses on integrating a bundle of services to help clients manage credit, increase income, and build assets.
There has been a 70% increase in calls to 2-1-1 for people seeking referrals for help with food, housing, employment, health care, and counseling. (2-1-1 is a program, offered jointly by United Way and AIRS, in many regions of the country that provides local referrals for basic services. Across California there are tens of thousands of community agencies providing human services – but how does one connect with them? Calling 2-1-1 can resolve the issue. Here is a link to the LA 2-1-1 website.)
But whatever anxieties were expressed – and as Paul Light suggested on September 28, 2009, “There is still plenty of anxiety…” – widespread failures since the April survey have not (as we enter December) been realized. These survey results offer no justification for the claim that “100,000 or more nonprofits” will be lost.
Finally, note 3 cites an Urban Institute publication (dated July 2009) reporting that “57% of Washington-area nonprofits had less than three months of operating reserves (the industry standard) in the bank in 2006, indicating the vulnerability of many organizations even prior to the recent downturn.”
This survey (note: circa 2006) may suggest reason for concern, though we could ask how many of these nonprofits have survived during the intervening three years; the answer might help us evaluate just how dire this situation – operating with reserves below the “industry standard” – actually is in practice. These survey results, however, can hardly be cited as justification for the assertion that 100,000 or more nonprofits are going under in the current recession (or over any specified number of months or years).
The Irvine Foundation report embraced a forecast – that gained prominence since its introduction in November 2008 – but that, based on what we know, was clearly out of date by November 2009.
Next post: Retire this Forecast: Loss of 100,000 or More Nonprofits
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