Fall 2016 issue of Horizons

NOT-FOR-PROFIT

Not-For-Profit Services Are Needed in Good Economic Times...and Bad by Mary Kay Lofgren, CPA

T he vitality of our region is strengthened by not-for-profit organizations serving a diverse population of citizens. Not-for-profit organizations are first responders when natural disasters hit and are consistent resources for our communities during strong and weak economic times. The variety and extent of services provided by nonprofit organizations is only limited by the funding available to the organizations. The economy during recent years has brought unique challenges to not-for-profit organizations with regard to generating necessary funding. Organizational funding comes from a variety of sources (e.g., earnings on investments, contributions, government funding and earned revenue sources), all of which are impacted by economic conditions.

According to Giving USA Foundation, total gifts to not-for-profit organizations exceeded $370 billion in 2015, an increase of 4.0% from 2014. Gifts to religious entities received the largest portion at almost $120 billion in 2015 and gifts to educational institutions received the second largest portion at over $55 billion. The only not-for-profit entity type which experienced a decrease in gifts in 2015 was foundations, which experienced a 3.8% decrease in gifts from 2014. The gifts in 2015 set a record and exceeded giving amounts in the years prior to the 2008 – 2009 recession. Although positive giving trends were reported for 2015, the projection for 2016 is not optimistic.

page 28 | horizons Fall 2016