Nonprofit Leaders Express Worries Over Tax Law and Possible Recession

A new study by the Center for Effective Philanthropy found that fifty-eight percent of nonprofit leaders believe tax-law changes have hurt giving to their organizations. Nonprofit leaders are also deeply worried about the potential for a recession and a lack of preparedness for an economic downturn, the poll found.

The financial resiliency of the nonprofit sector has tremendous impact on the availability of safety net services for tens of thousands of Montgomery County residents each year. However, as a 2017 report highlighted, 51% of area health and human services nonprofits were considered financially fragile following the 2009 recession and subsequent federal and state budget impasses.

The Center for Effective Philanthropy poll also found that if revenue declines, nonprofit leaders are most likely to respond by reducing services, freezing hiring and wages, or laying off employees.

Unfortunately, only 4 percent said they have discussed with grant makers who support them how their aid might change during a recession, while 89 percent said they would like to have that discussion.

HealthSpark Foundation’s Innovation Lab grant program offers nonprofits the opportunity to plan for financial sustainability given these challenges. Additionally, the System Leadership Capacity Building Program includes sessions on building financial resiliency into organizational budgeting processes. As the Foundation deepens its investments in the Safety Net Resiliency Initiative, expect to see more opportunities for health and human services nonprofits to plan for financial sustainability.

The full article can be found here.

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Article originally posted on The Chronicle for Philanthropy on December 13, 2019