If you have ever read the Bible, you know that there are stories of prophets who foretold doom to cities and groups if they didn’t change their ways. Jonah, the guy who ended up in the belly of a whale, was one of these prophets. Today, you can call me Jonah. I am sure that what I am about to write will not be received well by many in the Nonprofit sector, but the writing is on the wall, and it is not pleasant to read, especially if your organization relies heavily on government spending, whether from municipalities, states or the Federal government.
You cannot turn on the TV news or pick up a newspaper without reading a story about the “fiscal cliff” that is being debated in Washington D.C., and today it came out that the Federal government will reach its debt limit on Monday. The way things are going in our capitol, they are nowhere close to getting things settled in time. The country is in debt to the tune of trillions of dollars, with over forty percent of every dollar the government spends being borrowed from China and other sources. The Bush administration financed two wars on the country’s credit card, and the Obama administration spent like crazy over the last four years in an attempt to keep the economy moving. If things are not settled quickly, taxes will rise on everyone and spending will be cut across the board, which means organizations that rely heavily on Federal support will be hurt in a big way.
Most, if not all states, are deeply in debt as well, due to uncontrolled spending on things like unsustainable state employee retirement benefits and expensive bureaucracy, and lower tax income because of the economy. Cities which have borrowed heavily to continue running are filing for bankruptcy in some states. These governments do not have money to spare, and they will be cutting funds from human service organizations.
According to a contact in Illinois, the state where I was born, the state owes her organization nearly a million dollars for services rendered, and other organizations are waiting for their payments too. The legislature just voted to raise tax rates to some of the highest in the country, but I have to wonder how much that is going to fix.
If you read the definition of philanthropy in the dictionary, you will not find the word “government”.
[fi-lan-thruh-pee] noun, plural phi·lan·thro·pies.
1. altruistic concern for human welfare and advancement, usually manifested by donations of money, property, or work to needy persons, by endowment of institutions of learning and hospitals, and by generosity to other socially useful purposes.
2. the activity of donating to such persons or purposes in this way: to devote one’s later years to philanthropy.
3. a particular act, form, or instance of this activity: The art museum was their favorite philanthropy.
If things don’t change and nonprofits are going to survive, they will have to end or at least reduce their dependence on government spending. They must find new sources of sustainable revenue. They must learn to avoid costly fundraising methods like expensive events, and they must concentrate on engagement, cultivating and enhancing the relationships with their existing donors. They must find cost effective ways to reach more donors and build their bases without neglecting those who already support them. At a time when organizations are losing $109 for every $100 dollars of new money donated, they must find a way to turn things around. It is time for the nonprofit sector to change its ways if it is going to survive.