NonProfits Challenged by Financial Crisis

Analysts and nonprofit executives alike concur that foundations, and even high-net-worth individuals, will be looking less at donating to new projects, and are limiting their philanthropy to existing programs they support.

Even large nonprofits are not immune. Although they are likely to sustain themselves longer than their smaller counterparts, most large organizations have investments they rely on in addition to donations. If an endowment loses value, nonprofits have to look for alternative funding to make up the difference, which can be hard to attain in the tight donor market.

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On the other hand, charities such as Access Project for Rwanda are viewing donors as investors and turning their not-for-profit ventures into profitable ones.

Ruxin once divided his time between private business sector development in Rwanda and the rest on health care projects, but now 80 percent of his work is focused on money-making projects that would yield monetary investments for his donors.

"The wake-up call is that there really should not be such a distinction between for-profit and not-for-profits," he added. "It is about survival of the fittest."

Nonprofits also need to be focused on donor retention rather than on chasing after new clients.

It is important to talk to the main donor base and try to hold on to the biggest donors, said Joyce Mitchell-Antoine, chief development officer at Planned Parenthood of North Carolina in Chapel Hill.

"This is unlike anything I've seen since I have been at this organization 11 years," she said. "People are very concerned, particularly those [of our] affiliates whose fundraising maps don't have as much expertise around the area of major gift fundraising."

Where nonprofit organizations are losing donor funding, they are hoping to gain more volunteers as demand for social services increase.

Investing in the Community

Demands for services that nonprofits provide, such as free health care and food, tend to increase in difficult economic times.