New York City nonprofits are facing staggering financial challenges as they lose both public and private funding due to the economic recession.  It is a crisis both broad and deep, impacting a majority of local human service agencies, often to very severe degrees.  And, it is far from over in the view of many nonprofit leaders who struggle to plan for an even more uncertain future.

Those are the findings of a new study released today by the Human Services Council of New York City and conducted by the School of Public Affairs at Baruch College (CUNY).  The detailed analysis of survey responses from 244 local nonprofits reveals the following:

·         The majority of organizations (62%) have had a decrease in public funding with more than 1 in 5 (22%) having seen cuts of 20% or more.

·         Three quarters of all organizations (73%) have experienced reductions in their private funding with close to half (44%) have seen drops of 20% or more.

·         Most organizations (60%) are having difficulty managing their cash flow. Two-thirds of the nonprofits have no endowments; 30% have no lines of credit.

As a result, nonprofits have been forced to cut staff and reduce employee benefits:

·         More than half of all respondents (53%) have laid off staff in the past year.

·         Almost half indicated that they had used attrition and hiring freezes (45%) to reduce staff levels.

·         Planned salary increases went by the wayside at 60% of responding agencies.

·         Approximately 25% of agencies have reduced retirement benefits and/or health care.

Services have also suffered, although not to the same degree.  The survey found that 62% of respondents reported not eliminating any programs while 35% had done so.

In addition to its many detailed charts and tables, the report-- “The Helpers Need Help:  New York City’s Nonprofit Human Service Organizations Persevering in Uncertain Times” – includes quotes and comments drawn from the survey respondents.  “We feel abandoned by both government and private funding…” said one executive.  “We expect the crisis to increase during the next two years with further reduction in services,” said another. 

“On a broad level, this is the worst scenario for human services organizations,” said Michael Stoller, Executive Director of the Human Services Council. “There’s less government money because there are less taxes and there’s less foundation and personal giving because of the uncertainty in the market. Yet, the number of human service clients keeps increasing as poverty levels go up and these organizations are trying their best to help those who have nowhere else to turn.”

“This survey report aims to inform the public about current conditions and issues important to assisting the most vulnerable people within our communities,” said Jack Krauskopf, Director of the Center for Nonprofit Strategy and Management at Baruch. “We hope this information will help make an impact on public policymaking, philanthropic strategies and personal charity towards improving the process for providing critical resources where they are needed.”

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