CEGA Observation: It's the Economy! Great Time for Non-Profits?

The economic events of the last few weeks have certainly captured the attention of most Americans. What effect will the economic recession have on the fundraising and operations of the Non-Profit Sector?

Well, that depends.

At CEGA, we believe that our Mission is more timely than ever: non-profit organizations (NPOs) can derive economic benefit by excelling in areas of Governance, Ethics, and Accountability, particularly in times of economic uncertainty, cutbacks, and increased competition for contributions and grants.

Just this past week, we were made aware of a non-profit that saw an enthusiastic donor's $150,000 pledge become a reluctant $20,000 pledge. It's tough to argue with a donor! The man stated, "the value of my portfolio is dropping by the minute. I'm in my 70s and I just don't feel comfortable right now."

This prompted us to ponder the effect the economy will have on Major Donors and National Foundations. Likely, it will be substantial. Competition will be tougher than ever. But, the missions of so many NPOs are so important to the ongoing success of American that we, at CEGA, still hold to our belief that the Non-Profit Sector is going to be called upon to fix serious problems in ways that neither the Government Sector nor the Private Sector can adequately address.

Will some NPOs fail (i.e. 'go out of business') during these troubled economic times? Absolutely; some will not make it. That's the basis of our capitalistic system. Will some NPOs be 'rescued' like the banks? Perhaps. But, that will depend on the generosity of individual donors and individual circumstances; we would not predict that to be the norm.

So, how is your non-profit organization situated as we continue to move into these times of economic uncertainty? Take a look around you at the issues that are driving the national debate. For example: (a) if CEOs on Wall Street are being hammered for excessive compensation, how does your NPO executive compensation review compare with your peers? (b) if Boards are being criticized for lack of oversight for bank operations, how does your NPO compare? Are your policies up to date? Is your board active and informed? (c) if Accountability and Regulation are at center stage among private sector firms, how does your NPO demonstrate leadership far beyond the norm?

As with all things, the future belongs to the prepared. We urge your organization to take action now to be a leader in what promises to be an exciting new chapter in the greatest country in the world.

Please let us know how we can be of assistance.