Altus Dynamics Blog

Sector Monitor: Recession and Its Toll on Charities

Posted by Nicola Dickinson on Jun 1, 2010 3:41:00 PM

Many charities are experiencing challenges associated with the economic downturn.

  • Almost half are having difficulty fulfilling their mission and/or are facing increased demand for their products and services.
    Almost a third expect to have difficulty covering expenses in 2010.
    Almost a quarter say their existence is at risk.

One in eight charities is experiencing high levels of stress.

  • Charities more likely to be under high stress include those in British Columbia, with small numbers of paid staff, and with annual revenues of less than $150,000.
    Charities less likely to be under high stress include those located in the Prairies or Quebec, with 25 or more paid staff, and with annual revenue of $1.5 million or more.

Operating charities are taking a range of actions in response to the economic downturn.

  • The most common response was to try to increase revenues and reduce overhead costs.
    More than half of organizations increased their reliance on volunteers.
    Two-fifths used reserve funds.
    A quarter reduced services or programs.
    Just under a quarter reduced their paid staff complement and/or the hours paid staff work.

Operating charities and foundations have different experiences.

  • Foundations experienced a larger drop in revenues than operating charities but were better able to control expenditures.
    Operating charities are most affected by decreases in government funding while foundations are most affected by decreases in investment income.
    Foundations have more cash on hand than operating charities and are less likely to say their cash on hand has decreased.
    Staff and volunteer levels are more stable among foundations than operating charities.

Charities remain confident about the future, particularly when they look further out.

  • More than one quarter expect to be better able to perform their mission in 3 or 4 months.
    More than two-fifths expect to be better able to perform their mission in 12 months.
    Foundations are more likely than operating charities to predict a budget surplus and less likely to predict a deficit.
    Foundations are more optimistic than operating charities about their ability to carry out their mission in the short and medium term.

Read the full article by clicking here.

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This Post Was Written By Nicola Dickinson
Nicola Dickinson is a Founding Partner at Sparkrock. She formed Sparkrock with a vision and mandate to deliver award-winning, meaningful and affordable technology solutions exclusively for the non-profit and public sector. With a passion for assisting non-profit and public sector, she provides true value by being an active member of the non-profit community.
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