Monday, July 6, 2009

Surveys that Prove the Obvious; NFPs Are Financially Stressed

More studies have specified how nfp organizations are affected by the recession. The Bridgespan Group survey found 92 percent were feeling the effects of the recession. Johns Hopkins University's Listening Post Project survey found 80 percent of charitable organizations were feeling financial stress with 40 percent calling the stress "severe."

Smaller organizations, measured by budget, were most affected. In the Bridgespan survey, 70 percent of groups with budgets of $1 million or less reported their financial positioning worsened in the last six months, compared to 38 percent for budgets between $1 million and $10 million and 41 percent for organizations with budgets greater than $10 million. The Johns Hopkins survey found theatres and to a lesser extent orchestras most profoundly hurt.

We redacted on June 12 the results of a study showing giving to nfps was down ("Charitable Giving is Down: Bad News for NFP Theatres") The Johns Hopkins survey shows expenses rising too, except where belt-tightening has already been instituted.

For arts groups, one frequent tactic in response to the decline in donations has been to redouble efforts in marketing. This follows at least some of the advice of Michael Kaiser in his 2008 book The Art of the Turnaround: Creating and Maintaining Healthy Arts Organizations. Currently president of the Kennedy Center for the Performing Arts and leader of the recession-inspired consulting effort housed at the Kennedy, Arts in Crisis, Kaiser advises troubled arts organizations not to cut programing and to enhance marketing efforts. (This is a gross simplification of the meaning of Kaiser's very good and interesting book.)