The Shit Show for Nonprofits

Image Description: A wildfire burning in Klamath National Forest in 2017, with sparks flying into the air. Photo by Matt Howard on Unsplash

I’ve been busy lately with consulting projects, teaching, and life. It’s been hard to find time for reflection and writing, and this may continue for a bit. This does not mean that I am not paying attention. I continue to watch for news of nonprofits and talk with colleagues in an ongoing effort to make sense of what is happening.

Most of the news about nonprofits is not good. We continue to lose large and small nonprofits, while others are being forced to reduce staff and/or sell off assets. Yesterday, the Seattle Times reported that at least 250 art and culture jobs have been lost in the Seattle Area since last October. They have also reported on the Pacific Science Center selling off a good part of its campus and laying off some staff to stabilize its finances, and on affordable housing providers selling off buildings in their portfolios that no longer pencil out (in spite of infusions of cash from the City of Seattle). Nationally, I recently read about a small Vermont college closing and then last week the closure of Hampshire College was announced. These may be the leading edge of college closures as small liberal arts colleges are struggling with declining enrollment and rising costs.

This shit show is primarily caused by systemic challenges—we know that despite the amazing efforts of many nonprofits, the ravages of late-stage capitalism and the cruelty of the Trump administration’s policies are destabilizing for people and for many nonprofits, especially in human services, housing, healthcare, and equity-related missions. Oh, and arts, culture, and heritage. And for sure environmental conservation and justice, and climate action. Holy cow! We are up against a lot of devastating policy changes, funding shifts, and greedy corporate actions. Will policies change in time? Will corporate power be reined in as more Americans protest soaring wealth inequality and the marginalization and dehumanization of many people? I hope so.

The changes that are probably the most devastating financially to nonprofits are the cuts to federal funding (the worst is yet to come), declining philanthropy and volunteerism, the war on DEI, and economic distress (rising costs, stagnant wages, etc.). Nonprofits are also impacted by seismic shifts in the post-Covid workforce, including changing attitudes toward work, remote work, changes in volunteering patterns, and a job market that is not working well for either job seekers or employers. In Washington State, nonprofits continue to have great difficulty adjusting to the rising exempt salary threshold, adding further stress to staffing decisions. In addition, a lot of nonprofits became accustomed to having more unrestricting funding during Covid, as funders loosened their purse strings and PPP loans were forgiven. Both sources effectively provided additional unrestricted funding. This funding allowed us to relax a little, invest in expanded programming, staff up and/or raise wages. Now, it is difficult to sustain the gains we achieved and balance budgets.

My next post will be about how leaders can respond to this very tough operating environment.