The Nonprofit Finance Fund’s State of the Nonprofit Sector Survey is a barometer of U.S. nonprofits’ programmatic, management, and financial health. We talked to Jennifer Talansky, managing director of knowledge and impact at the Nonprofit Finance Fund, to discuss why they gather, analyze, share, and drive dialogue about this critical data. The 2018 survey is now open and the deadline to submit your responses is February 21.
KGC: Tell us a little bit about the survey and your goals around it.
NFF: NFF launched the Survey in 2009 to get a read on how nonprofits were faring when the Great Recession threatened the viability of organizations of all sizes and sectors. We quickly saw that the survey filled a gaping need, becoming both a collective megaphone for nonprofits and a crucial evidence base for a wide array of funding discussions.
By 2015, the Survey had grown to thousands of respondents and hundreds of distribution and outreach partners. It is now the largest national effort to capture and share real-time, financial and operational data in a sector where data remains dangerously scarce. It’s also a powerful platform that raises the voices of nonprofits large and small, urban and rural, across sub-sectors and geographies, identifying and communicating our sector’s most critical needs. The survey is a critical pillar of NFF’s commitment to share accessible insights that help unlock the potential of mission-driven organizations. It is an all-hands-on-deck, calling-all-partners grassroots effort to collect and raise nonprofit voices.
KGC: Why do you think focusing on financial health is so important?
JT: Nonprofits are mission-driven businesses entrusted with providing critically needed support to America’s most vulnerable people and communities. Nonprofits’ financial health is at least as important as the health of for-profit entities – just think about what happens when a nonprofit can’t deliver. Yet for many complex reasons, nonprofit financial health is often addressed – by both nonprofits and their funders – in programs or annual slices instead of through an enterprise-level and long-term lens.
Our dialogues with decision-makers desperately need solid, real-time financial data at the enterprise, sub-sector, and sector levels, data that realistically reflect the costs of meeting demand that continues to rise – and the costs to society when that demand can’t be met.
Our 2015 Survey found that, while the U.S. economic recovery was well underway, nonprofit leaders had persistent worries about succession planning, workforce retention, and financial sustainability. Fewer than half had ended the previous year with a surplus, and more than half had three months or less of cash-on-hand.
One leader said: “Although we manage to keep our financial heads above water – our greatest challenge is the uncertainty and constancy of operating on such a knife edge.”
All businesses – nonprofits and for-profits alike – must be able to recruit and retain professional staff, give them desks and computers to work at and a roof over their heads – and know they can fix the roof if it leaks.
KGC: Did you design this survey with any particular changes in mind since the 2015 survey?
JT: In addition to upgrading our Survey and data-visualization platforms, we looked very hard at this year’s questions in consultation with a lot of partners, including IS. Of course, we need to again capture the basic indicators of financial and operational health. At the same time, the three years since our last survey – especially the last year – have brought huge upheaval to our sector and our country.
Many nonprofits say they face unprecedented uncertainty about their near- and longer-term funding and policy environments. We hear anecdotally of nonprofits increasing their focus on equity and advocacy. A new slate of questions aims to capture those feelings and trends.
KGC: How will these results be used by your organization? How should they be used by the field?
JT: NFF publishes the aggregated, anonymized, and filterable data, as well as our analyses, on our website (free of charge) to support research, advocacy, budgeting, planning, grantmaking – and to drive evidence-based conversations with decision-makers.
Survey findings are widely used and cited by nonprofit leaders and boards, funders, advocates, policy advisors, media, researchers, and many others. NFF uses Survey results to guide our strategies, initiatives, and programs to maximize our social impact. Community foundations use the data to understand the financial condition of the nonprofits they fund. Advocates use it in Capitol Hill testimony and budget discussions. We are proud to keep that tradition going strong.
Now more than ever, the country needs to understand what’s at stake.
Learn more about the NFF State of the Sector Survey and fill it out out today at www.nonprofitfinancefund.org/learn/survey.