Most nonprofit organizations have been experiencing either stagnant levels of funding or lower levels of funding over the last year, according to a new report.
The annual not-for-profit trends report, released Thursday by UHY Advisors, surveyed over 225 executives and found 76% of the respondents said their organizations have experienced either stagnant funding (41%) or decreased funding (35%) over the last year. That's a major shift from 2022, when 40% of respondents reported an increase in funding while only 22% reported a decrease and 34% reported no change.
The biggest declines in funding over the past year came in the arts and culture (44%), social and community services (37%) and education (30%) categories.
Conversely, the health care (44%) and trade, member and professional (33%) categories saw the biggest increases.
In terms of increased demand for services, the social and community services (67%), health care (56%) and education (41%) sectors reported the highest increases in demand over the last year.
Not only funding, but staffing have been hard to attract over the past year, with 60% of the respondents saying it's harder for them to find talent, versus 10% who said it's become easier. In addition, 44% of the survey respondents indicated that turnover has increased over the past year and only 7% said it has decreased.
"The recent economic downturn over the last few years has been felt in every corner of the business world but has been felt particularly acutely within the not-for-profit sector," said Brian Kearns, partner and a leader of UHY's not-for-profit practice, in a statement. "Organizations throughout the not-for-profit space have had to juggle numerous priorities and economic stressors — from coping with increased turnover to stretching bottom lines — all while demand for their services has skyrocketed. This report digs into the pressure points and concerns these pivotal organizations are facing as they look to deliver much needed support during these incredibly uncertain times."
