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The Financial Health of the United States Nonprofit Sector: Facts and Observations

January 1, 2018

The Financial Health of the United States Nonprofit Sector examines the finances of more than 219,000 U.S. nonprofits for FY 2010-2014. The findings are sobering:Around 50 percent have less than one month of cash reservesSome 30 percent have lost money over three yearsSome 7-8 percent are technically insolventIn this report, we provide some context setting with a brief overview of the size and scale of the US nonprofit sector and why its financial health matters. We look at the financial vital signs of the sector, analyzing key financial metrics segmented by size, sub-sector, and geography1. We describe practical steps that trustees and their organizations can take to strengthen their financial position. Finally, we offer some long-term ideas for how funders and the rest of the ecosystem can actively reduce the risks of financial distress in the nonprofit sector. We conclude with an appendix of tables summarizing key financial health indicators for the sector.

The Financial Health of Philadelphia-Area Nonprofits

October 1, 2017

As nonprofit organizations in the five Pennsylvania counties of Greater Philadelphia (Bucks, Chester, Delaware, Montgomery and Philadelphia) emerge from the financial crisis of the last decade and head into a very different and hard-to-forecast political and economic environment in the future, financial discipline, smart growth and strong governance are more important than ever. Accordingly, many nonprofit executives and governing boards are asking new questions about the organizations they govern. What risks do we face?1 How risky are we in relation to our peers? Are we doing the right things to understand and mitigate our risks? How should we balance financial risk against programmatic reward? What should we do to reduce the potential hardships from financial distress?