In the face of a persistently tough economy and rising demand for services, there are some encouraging signs surfacing in the nonprofit sector. A recent survey by the Bridgespan Group of nonprofit executive directors found that half of the 102 organizations responding had seen their revenues begin to creep back up in the past year. Another noteworthy indicator: 60% say they are actively looking for newly available talent, compared with only 31% last year.

 According to Alan Tuck, the Bridgespan partner heading up the survey work, “Nonprofits are working hard to try to stay afloat and meet the demand. Whether the improvements we have witnessed in the sector constitute the beginning of a rebound or merely show a temporary reprieve from the economic storm remains to be seen. What is clear though, is that despite the challenges, some groups not only are surviving, but they are also experiencing growth and thriving.” The survey found that:

·         84% of organizations surveyed have seen an increase in demand for their services since the start of the recession compared with 58% in November 2009 and just 30% in November 2008.

·         Among direct service nonprofits, in the past year 73% increased the number of people they serve, while 70% increased the levels of service provided.

·         Only 32% of organizations received funding cuts in 2010, compared to 80% in 2009; of those, only half experienced cuts greater than 10%, compared to 2009 when 77% of funding cuts were greater than 10%.

·         Half of the nonprofits surveyed have seen their revenue increase in the past year, although growth has been distributed unevenly, with smaller organizations having a harder time.

·         For those organizations experiencing growth, almost two thirds (63%) saw revenue increase by 10% or more while 29% experienced growth of 20% or more.

·         Organizations that experienced growth also used a common set of management tactics.  They were:

• 36% more likely to create a communication plan to address recession related issues
• 23% more likely to increase efforts to accurately measure outcomes
• 23% more likely to develop a contingency plan
• 22% more likely to collaborate on programs of other organizations

“It is interesting to note that when we first starting doing these surveys two years ago, strategies like collaboration were looked upon as acts of desperation. Now, we are seeing them as acts of strategy, steps to help improve an organization’s ability to help solve complex problems, improve performance and accelerate growth.”  We hope these findings will provide other organizations in the sector with ideas for bolstering their own growth strategies,” said Tuck.

Bridgespan has also collected insights and advice from clients, from other nonprofit leaders and experts, and from Bridgespan leadership to help organizations manage through the downturn. (See our Managing in Tough Times resource center). To arrange an interview with Alan Tuck or to request a copy of the upcoming Bridgespan 2011 Report “Succeeding in Tough Times,” please contact: Liz London, liz.london@bridgespan.org, 646-562-8906 begin_of_the_skype_highlighting              646-562-8906      end_of_the_skype_highlighting.

About The Bridgespan Group

Founded in 2000 and incubated at Bain & Company, the Bridgespan Group is a 501(c)(3) nonprofit organization that helps nonprofit and philanthropic leaders to make strategic decisions and to build organizations that inspire and accelerate social change.