Elizabeth Boris
The financial crisis’ impact on nonprofits is not on policymakers’ radar screens. Bailouts for banks and corporations abound, but not a dime for nonprofits. Yet, these organizations are on the front lines being whipsawed by the downturn in the economy—their resources are shrinking just as demand for the many services they provide mounts. The time is ripe to consider immediate cash and credit relief for hard-hit organizations, along with a robust effort to enhance community service opportunities that would build skills, draw on experience, and benefit organizations and the communities they serve.
Nonprofits are facing potentially devastating revenue shortages as the income of individual and corporate donors deteriorates, endowments of foundations shrink, and federal, state, and local budgets contract. The pain of revenue shortfalls is intensified because most nonprofits lack the financial reserves needed to see them through more than a few months of lost revenues, especially if credit lines are frozen and uncertainty about government contract renewal reigns. Nonprofits around the country are already cutting services and programs and letting staff go. Unfortunately, we can’t track the impact of this financial downturn on nonprofits as swiftly as we can for businesses; for that, we’d need better data.
Providing nonprofits with access to cash and credit to continue high-priority services in a recession could help ease families’ hardship. Individuals’ jobs and homes have been wiped away, often through no fault of their own. To survive, those who have lost either or both need assistance. Arts, culture, research, environmental protection, and preventive service organizations also need help to survive. The costs of losing a generation of artists and researchers or of backsliding in our environmental cleanup efforts could be devastating. The fix? Partly it’s seeding efforts by social entrepreneurs to generate income for socially beneficial activities—reusing facilities, developing alternative energy, and others.
Ramping up national service immediately could help the economy, provide needed services, and build on the immense enthusiasm and involvement evident in the current election. Students, retirees, and unemployed people would benefit from opportunities to volunteer in schools and nonprofit organizations. Some could help repair deteriorating infrastructure and learn marketable skills. Others could help repair or forestall damage to the environment by cleaning up waterways, recycling trash, and participating in other activities. A call to service amid this financial crisis could harness the energy of the thousands of election volunteers who are seeking to promote positive change. It is an opportunity that should not be missed.
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