According to the results of the recently released 2011 Wisconsin Nonprofit Economic Impact report, nonprofits in the state will face more challenges in the year ahead, including increased demandS for their services and a decrease in government funding to help organizations provide those services.
“The results of this report are alarming but not surprising,” said Salli Martyniak, president of Forward Community Investments, the company responsible for conducting the survey. “Year after year, nonprofits are seeing the demand for services increase while funding continues to decline. In order to effectively manage challenges and explore solutions, nonprofits, boards of directors, funders and key stakeholders must work together.”
The study, sponsored by Wegner CPAs, was conducted to determine how the economy in Wisconsin is impacting the operations and finances of nonprofits in the state.
The survey focused on four specific areas, including future outlook, cash flow and capital, capacity building and collaboration.
“The sad thing we’ve been seeing since we started doing this survey is the continued deterioration of net assets for nonprofits across the state,” Martyniak said. “Budgets have been cut and nonprofits have had to dip into their reserves to continue to meet the needs of the communities they serve.”
According to the survey, a quarter of the nonprofit organizations surveyed felt financially healthy, but half reported feeling vulnerable. At least 24 percent of all respondents said their organization had cash reserves of one month or less while nearly 50 percent of all respondents said they had reserves of four months or more.
The survey was sent to nearly 3,000 organizations across the state. The results were calculated from a 10-percent response rate.
According to Martyniak, the resilience of the nonprofit organizations in the state continues to be strong, but this year, for the first time, many nonprofits decided they could not continue to increase the level of services they provide without the financial resources to do it.
“Organizations are being a bit more pragmatic in their approaches,” Martyniak said.
Nonprofits organizations in the Milwaukee area particularly have realized they have to work more efficiently and effectively, said Leigh Kunde, executive director of the Nonprofit Center of Greater Milwaukee.
“The people these nonprofits serve have been hit the hardest,” Kunde said. “Our nonprofit organizations have begun to think more proactively and navigate unchartered territories in order to best serve their populations. They’ve gone through strategic restructuring, increased collaborations and have continued to explore opportunities for further collaboration and mergers.”
Kunde expects more conversations regarding social entrepreneurship as additional revenue streams, collaborations and sharing resources will be explored by board members and organization staff members throughout 2012.
“Nonprofit organizations historically are dynamic, resilient and creative in the ways they are able to serve the community,” Kunde said. “Organizations continue to explore ways to maximize effectiveness with limited resources. It’s important to remember that some changes arise out of need but sometimes out of need opportunities arise as well.”