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In Every County, Across All Budget Lines: White Overrepresentation in New York City’s Nonprofit Leadership

April 26, 2023

Nonprofit New York, Candid, SeaChange Capital Partners, and Thomas Economic Policy and Data Consulting, with the support of Robin Hood, conducted a comprehensive assessment in 2022 of the current leadership demographics of the nonprofit sector in New York City using demographic data from nonprofit organizations' Candid nonprofit profiles. This report seeks to establish updated baseline data to inform our understanding of racial and other demographic representation within nonprofit leadership in the New York City area. Eight New York counties are included in the analysis, including Bronx, Kings, Nassau, New York, Queens, Richmond, Suffolk, and Westchester Counties.Our research questions include:What are ways for determining BIPOC-led, as defined by BIPOC communities?What are the current racial, gender, sexual orientation, and (dis)ability demographics of nonprofit sector leaders in New York City?How do the demographics of New York City's nonprofit sector compare to the total population? How do the demographics of New York City's nonprofit sector compare to low-income New Yorkers?How are leadership demographics reflected in various nonprofit subsectors, including poverty alleviating organizations, and organizational sizes?Is there a relationship between the demographic makeup of an organization's leadership and its financial position?This report used a participatory research design to inform our definitions and data analysis. The project sought the perspective, expertise, and thought partnership from Black, Indigenous, and other People of Color (BIPOC) nonprofit associations, BIPOC-led poverty-alleviating organizations, nonprofit racial justice researchers, and BIPOC-identified nonprofit capacity builders.

Main Street Lending 2.0: A Proposal to Support Our Most Vital Nonprofits

May 12, 2020

The government distinguishes "large" from "small" organizations in many ways, though the most common is whether they have 500 or more employees. Nonprofits deemed "large" under this definition have been completely shut out of the two most important sources of COVID-19-related financial support: the SBA's Paycheck Protection Program ("PPP") and the Federal Reserve's Main Street Lending Program ("MSLP"). This is unfortunate because, while small nonprofits are collectively important, the large ones do most of the work.This is true not only in higher education and hospitals, but in other areas that support the well-being of communities including: shelters, emergency food distribution, mental health, hospice, foster care, nursing homes, and caring for the developmentally disabled. These large nonprofits are systemically important partners to state and local governments, and many are on the front lines of the COVID-19 crisis. However, unless they receive immediate assistance, some will not make it through the next few months; few, if any, will survive without making drastic cuts to services that will be more vital than ever to our collective health, well-being, and safety during the COVID-19 crisis and its aftermath.Given the pressure on their budgets, and the difficulties that states and cities have in raising immediate funds from taxes or the capital markets, only the federal government has the scale of available resources to help large nonprofits. Fortunately, there is no need to develop an entirely new program; PPP and MSLP can be modified to get the job done.

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?

Risk Management for Nonprofits

March 15, 2016

Our research, based on the first comprehensive financial analysis of New York's nonprofit sector, found that 10% of the city's nonprofits were insolvent and 40% had virtually no cash reserves. Less than 30% were financially strong. If anything, things are getting harder, given market volatility, the move to value-based payments in health care, and increased costs for real estate and labor.Fortunately, we also discovered that nonprofits can take a few concrete steps to reduce their risk of failure and sustain vital programs:Make risk management an explicit responsibility of the audit and/or finance committee.Develop a risk-tolerance statement, indicating the limits for risk-taking and the willingness to trade short-term impact for longer-term sustainability.Keep a running list of major risks and the likelihood and expected loss for each.Put in place plans for how to maintain service in the event of a financial disaster, or even a "living will" that specifies how programs will be transferred to other providers (or wound down in an orderly fashion) in the event that recovery is not possible.Brief trustees regularly about longer-term trends in the operating environment.Periodically explore the potential benefits of various forms of organizational redesign, such as mergers, acquisitions, joint ventures, partnerships, outsourcing, managed dissolutions, and divestments.Compare financial performance to peers on an annual basis.Develop explicit targets for operating results (margins, months of cash, etc.) and contingency plans if minimum targets are not met.Redouble efforts to build and safeguard a financial cushion or "rainy-day fund," even if doing so forces consideration of difficult programmatic trade-offs.Doing any of these will depend on a functioning partnership between capable management and a critical mass of experienced, educated and engaged board members. Therefore, organizations serious about risk management must work hard to recruit board members with a wide range of experience. They need to ensure ongoing education for both new and existing board members and to empower high-functioning committees. Many organizations, particularly large and complex ones, would also benefit from having an experienced nonprofit executive on their board.