Nonprofit finances on the mend
Executives at nonprofit groups in New York City are feeling more confident about the future, with an increasing number saying they plan to add new programs and serve more people this year than they did in 2012, according to a new study. This year, 61% of nonprofits surveyed planned to boost services, while 57% expected to add clients, according to the study by the Nonprofit Finance Fund, which makes loans to charitable organizations. Last year, only 53% of the groups said they had expanded programs while 44% served more people. The executives' optimism likely stems from their organizations' improved financial picture. According to the study, 31% of nonprofits surveyed ended their 2012 fiscal year with a deficit while 22% broke even; yet 23% predict they will end their 2013 fiscal year in the red, while 38% believe they will break even. Despite the brightening picture, executives say many organizations are still struggling in the aftermath of the recession, which increased need and decreased funding. "I think they are getting used to the new normal and accepting that the money they used to get isn't coming back," said Anjali Deshmukh, director of knowledge and information for the Nonprofit Finance Fund. The organization surveyed 224 charities in various sectors including health, the arts and human services. She said that some organizations are also simply learning how to raise money more effectively and managing resources better. That's what Brooklyn Community Services did. Last year, its annual gala raised a record $500,000. But it has made a point of reaching out to younger donors through social media and has put auction items online to expand the pool of potential buyers. Meanwhile, the Brooklyn agency broke even in its most recent fiscal year after logging three years of deficits. Its executives made some tough choices to get its financial house in order, like closing a program designed to help families stay together rather than putting children in foster care. It also laid off staff from other programs, eliminating about 70 positions, bringing the total number of employees to 375. "You have to take a look at whether your program made sense," said Marla Simpson, executive director of the agency that provides a broad range of social services. Some groups are growing after retrenching. At Sunnyside Community Services, Executive Director Judy Zangwill said she plans to add four or five people to her staff because the organization initiated two new health care-related programs. However, that may not happen if the city's budget is passed in its present form because it will result in $1 million of cuts to the organization. The city accounts for about 60% of the group's budget. The organization, which provides a variety of services to about 14,000 people ranging from children to adults, is already smaller than it was three years ago when it served 18,000 people. That year it also laid off about five people and cut a food stamps program. "The financial picture is better, but I don't feel we are out of the woods yet," said Ms. Zangwill.
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