The Plight of the Not-For-Profit Sector

Sony has revealed that they experienced a loss of 159 billion yen (2.1 billion US dollars) for the October-December quarter. Unconfirmed reports are predicting that this will mean a six percent decrease in Sony’s international workforce, which in real numbers means that 10,000 people face losing their jobs.

In today’s economic reality stories like this are neither shocking nor surprising. We have become desensitised to the everyday losses of businesses. However it is not just businesses that are facing tough times. A study released by Grant Thornton highlighted the plight of the not-for-profit sector.

It has emerged that one in ten not-for-profit organisations will cease to operate in the coming times due to an inability to plan for the next six months. Over 80 percent said they were unable to plan beyond two years because they were unsure if they would have enough money to survive that long.

Of the nearly 1000 organisations surveyed it emerged that government contributions account for approximately 60 percent of their funding and due to cut backs their future is now questionable. Other contributing factors to their uncertainty were increasing challenges in financing organisations from non-governmental sources and continuing struggles with corporate governance.

In an interview with the Irish Independent, Turlough Mullen, partner at Grant Thornton, said the not-for-profit sector has never been in such a “perilous state”. Mr Mullen added that, "as the crisis continues to deepen, we see that no sector is unaffected. The reality is that, in spite of the fact so many of these organisations do excellent work, we will see consolidation and rationalisation in the not-for-profit sector, just as we have seen in many areas of business".

So what does the future hold for these organisations? With so much good work being done can we live without them? The answer is no! The not-for-profit sector is a sector that if it diminishes many will suffer. The vulnerable will suffer. These organisations will have to find new means of survival. Seven out of 10 charities have had to create new forms of fundraising in the past two years as Government spending was slashed, but is enough being done to save this sector?