Will Financial Crisis Lead to Hard Times for Nonprofits?

With congressional leaders reaching an agreement Thursday afternoon on the president’s proposal to pump $700 billion into the country’s financial system, it’s not yet clear how corporations and foundations will change their policies in giving grants and gifts.

However, if a report on WNYC Thursday morning is any indication, there might be a real sea change in nonprofit funding and fund-raising. Fran Barrett, the executive director of Community Resource Exchange, an organization that works with hundreds of nonprofits, said in the report that “the economic downturn will create a great demand for social services, just as nonprofits have to lay off their own employees.”

We’ve got all this talent and ability to help, and it’s just so frustrating that there are people out there who need our help, but the nonprofit sector will be limping along because it won’t be able to sustain itself.

What are some of the real effects of the current crisis on Wall Street on the non-profit world — how will the climate here change?

Matthew Brian Hersh served as senior editor at Shelterforce from March 2008 to October 2012. He studied English at Rutgers University and has spent his professional career in journalism, policy, and politics.


  1. It’s a serious possibility that nonprofits will suffer, and not just because of the legislation but because of the underlying chaos in the financial markets and loss of investor confidence. Private foundations’ portfolios will be worth less, meaning less to give away, and individual donors will have less discretionary income as their own investments suffer in the market. Government funding will get tighter because we’ll now be paying for two wars and a financial rescue package along with “normal” government services. My organization is drawing up contingency plans.

  2. Ditto to the above comment. And it also means more staff time devoted to survival rather than program—if donors give less, you have to find more donors or income sources.

    None of it’s pretty.


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