I was startled when I read recently that Philadelphia-based Public/Private Ventures, a highly regarded research and evaluation organization, had announced that it would be closing its doors at the end of July after 35 years, due to financial issues.
Public/Private Ventures, or P/PV, as it is known, is a pioneering nonprofit that focuses on evaluating the success of programs for low-income youth, i.e. mentoring, job-training, prisoner re-entry and youth violence prevention programs.
According to Philanthropy News Digest, P/PV appears to have been a casualty of the downturn in the economy. Simply put, it could not generate the revenue it needed to meet its expenses. "Like so many other nonprofit organizations, P/PV was hit hard by the recent recession," said P/PV president Nadya K. Shmavonian. "Over the last few years, we have worked to chart a new, sustainable path forward. We were able to secure generous core support from several private funders, and in April of last year, we made difficult staff cuts across the organization. Unfortunately, these changes were not enough to keep us competitive as a small, mission-focused agency — not without long-term funding to cover our core operational expenses, particularly those related to distilling and disseminating knowledge."
“Between federal and state cutbacks and challenges in private philanthropy, I think we are going to see a number of nonprofit closures,” said Shmavonian. Unfortunately, I think Ms. Shmavonian may be a seer with regard to the fate of thousands of financially strapped nonprofits throughout the nation.
Although it was announced that the Great Recession officially ended in June 2009, many of our nation’s nonprofits continue to face the “perfect storm.” As a consequence of the financial meltdown and resultant financial instability, they are grappling with an astronomical increase in demand for their services and a dramatic change in the fundraising landscape in which they have operated for decades.
The severe economic crisis and its aftermath caused cataclysmic changes in many aspects of the terrain of the nonprofit fundraising landscape. When it comes to the plight of America’s nonprofits, Bob Dylan got it right when he wrote “The Times They are A-Changin’.”
When a budget deal is finally struck in Washington after the upcoming presidential election, there will be substantial additional cuts in federal programs that aid thousands of nonprofits and to entitlement programs that give benefits to everyone who qualifies, such as Medicare and Social Security. Nonprofits that rely heavily on federal funding to cover a portion of their overhead and administrative cost will be especially vulnerable to federal cuts.
To save government jobs, public-employee labor unions will, no doubt, urge the federal government to reduce contracts to nonprofit organizations in order to keep regular staff employed. There is little question that many nonprofits will see fewer government grants and contracts to provide health, human care and social services.