Giving Compass' Take:
- Here are five learnings from the Nonprofit Finance Fund’s 2022 State of the Nonprofit Sector Survey highlighting significant organizational shifts between 2018 and 2022.
- How can this research help donors better support nonprofit needs in the upcoming year?
- Read more about the survey and the importance of protecting nonprofits.
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Nonprofit finances in the United States were relatively strong at the beginning of 2022, largely as a result of government and foundations stepping up their support of nonprofits during the COVID-19 pandemic. However, inflation, economic volatility, increasing demand for services, and a reversion to pre-COVID funding practices indicate that nonprofits will soon face familiar financial challenges to serving their communities.
However, data collected from Nonprofit Finance Fund’s 2022 State of the Nonprofit Sector Survey provides a unique window into both what worked when nonprofits across many different service areas had more resources and how funders might better support them in the future.
We surveyed more than 1,100 leaders from across the United States, 311 of whom also took the survey in 2018. Questions focused on nonprofits’ programmatic, operational, and financial health. Survey-takers represented nonprofits of all sizes, working in areas such as health and human services, social justice, education, and arts and culture. Our analysis of the 311 respondents who took the survey in both years showed that funders made meaningful changes that benefited the financial health of many nonprofits—at least for the near term—and that these nonprofits were better prepared to meet ongoing challenges and future crises in their communities.
The field now has an opportunity to solidify the funding gains we saw in the first two years of the pandemic and continue the kinds of funding best practices nonprofits have been fighting to secure for years. Here are five things we learned from the data comparing 2018 and 2022 responses from the organizations that took both surveys:
- Low-interest, forgivable PPP loans meant more money to meet community needs.
- Foundations made meaningful funding changes that need to continue.
- Nonprofits built reserves, anticipating future challenges.
- More cash on hand will allow nonprofits to pivot, as they did at the beginning of the pandemic.
- Increased surpluses mean more nonprofits have the resources to meet community needs.
Read the full article about nonprofit finances by Chris Lisée and Larry McGill at Stanford Social Innovation Review.