By Kevin Haas
Rock River Current
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ROCKFORD — The majority of nonprofit organizations in the region have an optimistic financial outlook as they emerge from the coronavirus pandemic, but there are challenges ahead with an uncertain future for the nation’s economy.
That’s according to the State of the Sector report conducted by the Northern Illinois Center for Nonprofit Excellence. The report is based on an anonymous survey of nonprofit organizations in Winnebago and Boone counties conducted earlier in the year.
About 57% of respondents said they will have the financial resources to provide services.
“It shows an optimistic sector,” said Pam Clark Reidenbach, NICNE’s executive director.
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The data, however, also shows potential challenges facing the sector with roughly two in five organizations not confident they’ll have the necessary funding.
“It’s a COVID residual response,” Reidenbach said. “Some organizations that had to shutter during COVID are still digging their way out.”
Highlights from the State of the Sector report were unveiled Thursday during a presentation at Northern Illinois University Rockford on the city’s east end. The full written report will be released in early 2023.
This year’s report provides the first snapshot of the nonprofit sector as it emerges from the COVID-19 pandemic. Many were buoyed by federal relief dollars during the pandemic.
“The more concerning time is a couple years from now when COVID relief dollars are exhausted and organizations don’t have that to fall back on,” Reidenbach said.
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Many organizations rely on special events as their primary fundraisers, she said.
“Special events are still not at prepandemic rates, so they’re still struggling to raise the dollars they need to meet their missions,” she said.
About half expect the financial outlook to be the same over the next year, and 36% expect it to improve, according to the report.
“We’re not seeing the significant drawdown of reserves or selling of assets,” said Alicia Schatteman, director of the Center for Nonprofit and NGO Studies at NIU, who presented the highlights of the report.
Schatteman said the sector has proved its resilience in the face of financial uncertainty before.
“During the state budget crisis a few years ago we saw very few organizations actually go under,” she said. “It’s interesting to see now that coming out of COVID if they’re able to bounce back.”
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Three-quarters of those surveyed said they haven’t considered layoffs or debt restructuring as a financial strategy. About 6% said they’ve considered closing the organization.
“Nonprofits are absolutely resilient and absolutely committed to their missions,” Reidenback said. “They’ve done some very creative things to be able to sustain their work.”
The report also showed that nonprofits in the region average $2.8 million in total revenue and that the sector is the area’s third-largest employer. Nearly 72% anticipated hiring staff in the coming year, and 95% have increased pay during the past year.
The study has been conducted for five years, initially starting as a means to track trends and salary data in the sector. The report is also meant to illustrate the value nonprofits have on the overall community.
“NICNE knows that nonprofits are the soul of our community. Nonprofits give shape to our boldest dreams, highest ideals, and noblest causes,” Reidenbach said. “Nonprofits are also an economic engine for the region and major employer outpacing other fields and industries.”
This article is by Kevin Haas. Email him at khaas@rockrivercurrent.com or follow him on Twitter at @KevinMHaas.