Another day, another blow to the nonprofit community from the financial world. First, Lehman Brothers, et. al get their greed comeuppance and the result is that many New York nonprofits have their donations cut in half or worse. Then the banks: same thing for the nonprofit community---less support immediately and over the next two or three years.
The stock market tanks: Foundations lose 40-50% of their endowments and can't make as many grants. Some grants are canceled in mid-stride. Cynical side note: anyone suggesting that in such dire times the foundations should explore merging? Or is this only a good idea for poor nonprofits? Hmmm.
Friday, it was Madoff. While we only know the very, very, very slimmest part of the story, and more is coming out by the hour, many nonprofits are suffering, some to the point of closing.
In hard times the poorest suffer first, most, and longest. It seems that is playing out with nonprofits now. And it's our fault. We (and by we, I mean all of us: funders, donors, media, government) have kept nonprofits poor, fussed at nonprofits when they have cash reserves, hassled them when they had "too much" administrative cost. Now, when the community needs the nonprofit world the most (1 in 10 americans is now on food stamps), they have insufficient resources to ride out the cutbacks, and will fail in large numbers.
Paul Light noted a month or so ago that 100,000 US nonprofits could fail in the current recession/depression. What would that number be today?
And, I wonder what the news will bring tomorrow?