Nonprofits Kept Michigan Afloat During Great Recession

Mlive.com writer Rick Haglund just put up an informative article about Michigan nonprofits helped keep the state functioning during the Great Recession.  While the entire country was affected by the economic downturn of the past few years, Michigan might have been hit the hardest.  As has been well documented, the state lost some 850,000 jobs when the auto industry collapsed as a result of the recession.  As this happened, however, the nonprofit sector in Michigan experienced a huge growth spurt.

As a matter of fact, employment at nonprofits grew almost 23% over the past decade, while jobs in the for-profit sector fell about 21% (this according to a study at Johns Hopkins University’s Center for Civil Society Studies).  And today, almost 375,000 people in Michigan are employed at a nonprofit organization.  As Haglund says, during a time when budget cuts were tearing "a hole in the social safety net, nonprofits kept it from shredding."

According to Lester Salamon, author of the John Hopkins study, "Michigan is fortunate to be home to such an inventive, entrepreneurial nonprofit sector — one that is making a difference in a state under economic siege."

Despite all of this good news, questions do remain about whether the growth of nonprofits in Michigan is a good thing.  Because these organizations are tax-exempt, there are concerns that the tax base of state and local governments could shrink, which would put more pressure on their already strained budgets.  In addition, many nonprofits are having difficulty finding funding for their social services programs.

So while there is optimism about the impact non-profits are having on Michigan, it remains to be seen whether or not their overall effect will be positive.  Read the full article on this subject at Mlive.

More About Nonprofits and the Recession

The other day, we posted a story about how the recession impacted nonprofits.  Today, we wanted to follow up on that story a little bit.  Over the weekend, The Charleston Post Courier posted a story about some local nonprofits that have either succeeded or faltered during the Great Recession.  It's a pretty fascinating read, to say the least.

The story starts with information about Florence Crittenton Programs, an NPO dedicated to helping poor mothers in South Carolina.  The director there, Lisa Belton, had to start working for 30% less than the previous director made because donations were fading because of the country's economic plight.  As she explains, she made a personal sacrifice to help an organization she cares so deeply for.

Yet the story provides an interesting contrast by describing how Goodwill Industries of Lower South Carolina fared.  Located just a few miles from Florence Crittenton, this nonprofit organization was on the opposite end of the spectrum.  During the same period that saw Forence Crittenton Programs suffer, Good Will Industries flourished, posting double-digit revenue increases.  In fact, the organization did so well that in 2009, it gave its president a $31,375 bonus in addition to the $228,417 he already made annually. 

Thus was the story of South Carolina Non-profits (and, really, nonprofits all across the country).  As donors started saving their money instead of donating, organizations had to do more with little.  Some agencies, like Goodwill, managed to harness this better; and some, like Florence Crittenton, did not.  This is not a judgement on either of these organizations, though it probably was a little easier for Goodwill with its large network.  At the same time, however, a local South Carolina food bank, Lowcountry Food Bank, was able to succeed in this environment as well.  By spreading their message of how food was a priority, this NPO was able to raise a lot of money; their revenue rose by nearly $23 million (or 45%) from 2007 and continued during the worst of the recession.

This story is a great read on how differnet NPOs managed to survive (or struggle) through one of the worst economic downturns this country has experienced, and we at The NonProfit Times recommend you read this story in its entirety.

Economic Recession Continues to Hit Nonprofits Hard

Three years after the beginning of the Great Recession, it is common belief that the worst of the crisis is over; tell that to nonprofits.

According to the latest study by the Nonprofit Finance Fund, 87% of nonpofits said that tough economic times still impact the way their organizations are run.  So why, if the economy is getting better, are non-profits still feelig the sting of the recession?  One reason seems to be an increasing demand for their services.  With the high unemployment rate, general poverty, and government cuts (all resulting from the recession), more people are leaning on NPOs to help them then ever before.

St. Barnabas Senior Services, a nonprofit based in Los Angeles, has witnessed a 10% increase in demand for their services in only the past year.  And things don't figure to get any easier; 85% of the organizations surveryed in the NFF study say they believe that demand for nonprofit services will only increase during 2011.  And of these organizations, only 46% believe they will have the ability to meet these demands.

Things are not all gloomy, however; mostly because of the donations made by citizens.  In another study by the Nonprofit Research Collabortive, 63% of NPOs believe contributions to their organizations will increase in 2011.  In a story by the Huffington Post (where much of this information comes from), the president of Bank of America Charitable Foundations urges people to do whatever they can to help nonprofits "keep the lights on."  This can be anything from making a donation to your favorite nonprofit, or volunteering at one.

Want to read more about this story?  Read the full article at the Huffington Post.