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Nonprofit economics
I'm attending a Nonprofit Economic Summit for Dane County, Wisconsin, this morning, co-sponsored by our county's United Way. Lots of experts -- including state, county, and Madison city officials -- exploring the economy and the unique need and role for nonprofits. The sessions have been front-loaded with bleak information, as you might expect, tracing the collapse of many financial indicators. Among them, the dramatic and historic 18 percent drop of household wealth in 2008. See interactive charts from the Wall Street Journal.But the really troubling news is the number of lags and delays in our economic system, suggesting that the tough year for nonprofits is still to come. Housing values tend to lag about a year. City and county revenues are closely tied to those property values (and the fees related to housing starts and zoning requests). Contributed income tends to see its biggest drop in the year following a recession. Endowment draws for foundations and most nonprofits, assuming a twelve-quarter rolling average, will be trending down for the next many years (not mentioning the loss in their total asset value).
So, even if the economy turns around in 2009, 2010 will likely be the difficult year for most nonprofits. Hang tough.
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