Lentz Center Participates in National Study

02/21/04 Press Release – The Lentz Center for Asian Culture, University of Nebraska-Lincoln, is one of 500 nonprofit organizations nationwide working with Johns Hopkins’ Center for Civil Society Studies in an ongoing research project to identify the major challenges facing nonprofit organizations. Its most recent work focused on how nonprofit organizations are responding to government budget cuts and weakened services, community and economic development, museums, and theaters. The Hopkins research, called The Listening Post Project, is the most comprehensive effort to date to document the actual effects of the current financial environment on the nation’s charitable organizations and those they serve.

The study found that despite significant fiscal stress during 2003, the vast majority of U.S. nonprofit organizations reported at least moderate success in coping with the current fiscal environment. “What this survey shows is that American nonprofits have become highly entrepreneurial organizations, responding actively and often creatively to new fiscal pressures,” noted Dr. Lester M. Salamon, who directs the Hopkins Listening Post Project. “At the same time, it makes clear that those pressures are also exacting a toll.”

“Fortunately we have been spared from the extreme state budge cuts. But it was a very nervous year,” Barbara Chapman Banks, Ph.D., Director/Curator, Lentz Center for Asian Culture.

Nearly 90 percent of the surveyed organizations reported some degree of fiscal stress over the past year, and for more than half it was “severe”. Yet the vast majority of these agencies managed to boost their income, and nearly two-thirds reported increased activity in response to growing demand.

New funding initiatives. Four out of five respondents reported expanded private fundraising efforts and nearly 84 percent reported increased marketing and fees.

New program initiatives. More agencies reported expanding programs, broadening their reach, and speeding up innovations than reported cutting back in these areas.

Belt-tightening. At the same time, organizations have sought ways to cut costs. Most survey participants seem to have followed suit. Over half reported freezing salaries, decreasing benefits, or increasing staff hours; and nearly 70 percent reported postponing hiring, eliminating vacancies, or increasing reliance on part-time staff.

Eating reserves. Over half of the respondents reported dipping into reserves and endowments, selling real estate or other assets, and/or borrowing in the hope of future gains.

Collaboration. Organizations also turned increasingly to collaborations and partnerships, with over half citing this as a strategy for coping with fiscal distress.

Expanded advocacy. Agencies also took proactive actions to avoid the cuts with two thirds reporting implementing or expanding their advocacy activities.

According to Dr. Banks, “We have continued our policy of collaborating with other university departments”.

These coping strategies have not been without their costs, however. A number of respondents reported increased tension as staff attempted to get more work done with fewer resources. Some worried that salary and benefit cuts would hinder the ability to recruit competent and professional staff. Even more seriously, nonprofits found it necessary to pay more attention to survival than to the special qualities that make them distinctive, such as serving those least able to pay.

To learn more about The Listening Post Project or to obtain a copy of the full report, visit the web site www.jhu.edu/listeningpost or contact Lester Salamon, Director (lsalamon@jhu.edu) or Richard O’Sullivan, Assistant Director (rosullivan@jhu.edu), Center for Civil Society Studies, Institute for Policy Studies, Johns Hopkins University, 3400 N. Charles Street, Baltimore, MD 21218, (410) 516-8473.

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