Atmosphere

No Money, Mo' Problems

The recession is hurting nonprofits—and the people that depend on them.

April 2009

The global economic meltdown has given new meaning to the phrase "trickle down," leaving local nonprofits scrambling. Individual donations and grants are drying up, and as the state Legislature grapples with a $600 million budget shortfall, line-item cuts dealing with public safety, health, and education may mean trouble for the organizations that help those needing it most. Nonprofits have been left reeling: The Philanthropic Giving Index, which measures nonprofit fund-raisers' confidence, is at a 10-year low, having dropped 27 percent between June and December 2008.

"In the next two years, there will be a tremendous shakeout of nonprofits," says Janine Vanderburg, president of nonprofit consulting firm JVA Consulting. Vanderburg predicts that some nonprofits will merge in an effort to become more efficient and survive, while others will have to close. Arts-focused organizations will likely take the biggest hit. "Donors refocus on immediate needs," says Brianna Doby, owner of nonprofit consulting firm BD Consulting. "People think, 'Could my dollar do more preventing child abuse or by supporting a local concert or arts initiative?' "

Even the big guys are hurting—the Denver Art Museum slashed about $2.5 million from its 2009 budget in early January to prevent further cuts down the line, and it expects some softening in 2009 fund-raising efforts. Meanwhile, attendance and individual donations for the Colorado Symphony Orchestra are down about 12 percent from last year. The CSO has some cash reserves, but is on the hunt for more funding, says Cliff Gardiner, the interim president. "We hope the longtime donors step up and bridge the gap," Gardiner says. "We're well into the downturn, but I don't think we're looking at the end of it yet."