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The newspaper of The Johns Hopkins University January 26, 2004 | Vol. 33 No. 19
U.S. Nonprofits Stressed But Coping, Survey Finds

By Mimi Bilzor
Institute for Policy Studies

U.S. nonprofit organizations experienced significant fiscal stress over the past year but still managed to increase services and boost revenue, according to a new report by the Johns Hopkins Center for Civil Society Studies as part of its Nonprofit Listening Post Project.

Surveying a nationwide group of nonprofit agencies in five fields, the Johns Hopkins survey is the most comprehensive effort to date to document the actual effects of recent economic weakness and government budget cuts on the nation's charitable organizations and those they serve, and to assess how the organizations have responded.

The survey focused on organizations serving children and families, community and economic development, the elderly and the arts.

"What this survey shows is that American nonprofits have become highly entrepreneurial organizations, responding actively and often creatively to new fiscal pressures," noted Lester M. Salamon, who directs the Johns Hopkins Listening Post Project. "At the same time, it makes clear that those pressures are exacting a toll."

Bob Jones, president of Children's Aid and Family Service of Paramus, N.J., said, "This is not a dip; it is a sea change. We can't simply sit idly and hope it will go away."

Nearly 90 percent of the surveyed organizations reported some degree of fiscal stress over the past year, and more than half described that stress as "severe." Yet the vast majority of these agencies managed to boost their income, and nearly two-thirds reported increased activity in response to growing demand. To accomplish this, organizations said they employed multiple strategies, combining new initiatives with defensive belt-tightening and aggressive advocacy. Among the major responses:

New funding initiatives. Four out of five respondents reported expanded private fund-raising efforts, and nearly 84 percent reported increased marketing and fees.

New program initiatives. More agencies reported expanding programs, broadening their reach and speeding up innovations than reported cutting back in these areas.

Belt-tightening. At the same time they have taken on new initiatives, organizations have sought ways to cut costs. Over half reported freezing salaries, decreasing benefits or increasing staff hours. More than 70 percent reported postponing hiring, eliminating vacancies or increasing reliance on part-time staff.

Tapping reserves. Over half the respondents reported dipping into reserves and endowments, selling real estate or other assets and/or borrowing in the hope of future gains.

Collaboration. Organizations turned increasingly to collaborations and partnerships, with more than half citing this as a strategy for coping with fiscal distress.

Expanded advocacy. Agencies took proactive actions to avoid the cuts with two-thirds reporting implementing or expanding their advocacy activities.

These coping strategies have not been without their costs, however. A number of respondents reported increased tension as staff attempted to get more work done with fewer resources. Some worried that salary and benefit cuts would hinder the ability to recruit competent and professional staff. Even more seriously, nonprofits found it necessary to pay more attention to survival than to the special qualities that make them distinctive, such as serving those least able to pay.

The Listening Post Project is a collaborative undertaking of the Center for Civil Society Studies at the Johns Hopkins Institute for Policy Studies, the Alliance for Children and Families, the Alliance for Nonprofit Management, the American Association of Homes and Services for the Aging, the American Association of Museums, the National Council of Nonprofit Associations, the National Congress for Community Economic Development and the Theatre Communications Group. Support for the project has been provided by the Carnegie Corporation of New York, the Ewing Marion Kauffman Foundation, the Rockefeller Brothers Fund and the Surdna Foundation.

For a copy of the full report, contact Mimi Bilzor at


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