The financial crisis of the past few years is one of the most severe shocks that nonprofits have had to face in quite some time. What kinds of changes have organizations had to make within the past few months because of financial issues? For instance, has the economic environment made fund-raising more difficult? Has there been an increase in the need for services for some nonprofits? How can we do strategic planning given the kinds of uncertainties we face?
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The recent financial crises has undoubtedly changed the course of many non profit organisations in therms of their services and resource endowment as well. Most of these organisations base for funding has become destabilized owing to future uncertainties about the value of assets that many fear could collapse overnight. Ideally, under such financial crisis where the value of assets falls unexpectedly and in large amounts, the net return on those assets as well fall. As a result, the nonprofit organisations avoid investing in such assets due to this uncertain future.
In addition to this, weakened organisations mean that their ability to help the communities that they represent falls. People thus turn to more fundraising drives to acquire funds as an alternative to the nonprofit organisations that used to help them before. This spiraling effect gets worse where even the donations they used to have fall while the demand for their service increases. This puts pressure on them at both sides of their funding and the demand from their members too.
Strategic planning would increase the future investment of these organisations. By understanding the future dynamics in the financial sector, these organisations can maintain a buffer reserve to shield themselves of these uncertainties.
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Sep 21st, 2015
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