“Sadly, it’s much easier to create a desert than a forest.” -James Lovelock, scientist
Have you ever had that feeling before: haven’t I already read this, didn’t I forward this on to my board, didn’t KNN send this out in a recent e-newsletter? Reading the results of the Nonprofit Finance Fund’s recently released 2015 State of the Sector Survey gave me that feeling, because not much has changed. While many sectors are rebounding financially, many nonprofits still struggle to serve their communities. These are the national results, and you can also filter the results for Kentucky.
Twenty of our Commonwealth’s nonprofits completed the survey, and while not a huge number representing our state, the findings are not surprising and are troubling. The results indicate the greatest challenges facing the nonprofits completing the survey are:
- Achieving long-term financial sustainability
- Marketing, outreach and community engagement
- Managing or pursuing growth
- Offering competitive pay and/or retain staff
- Increases in unavoidable costs (benefits, etc.)
- Barriers to effectively and efficiently administering government contracts
Also not surprising are some of the issues nonprofits are having with their government contracts. While most report not having issues with late payments, late payments are very late and most certainly create difficulty with cash flow:
Most of the articles summarizing the national results of the survey use words like “tightrope” “déjà vu,” and “chronically brittle,” to describe the state of our nonprofit sector. The problem, Nonprofit Finance Fund suggested in its report, is rooted in poor financial management on a number of fronts: relying on delayed government payments and private funders, focusing on expanding programs rather than the financial health of the program and ignoring overhead costs.
It’s clear that there is much work to do to move beyond short-term survival and address the long-term viability of our sector, but I am encouraged. KNN, as your state association of nonprofits, is already an active partner with you on a number of these issues: the recent passage of HCR 89 to create a Nonprofit and Government Contracting Task Force that will get started this summer; professional development opportunities to stay ahead of the curve; outreach initiatives like KY Gives Day and cost-savings programs like KNN’s state association health plan and our unemployment insurance partnership.
So while I’m certain we’ve been here before (and we have), waiting for things to improve feels like we are watching paint dry. But there are opportunities to improve your nonprofit’s long-term sustainability – some of which exist through membership in your state association of nonprofits! Let us hear from you – how can we help?
Executive Director, KNN