The effect of hard times on nonprofits is clearly a hot topic.  There was an article by Kevin McCoy and Oren Dorell in today’s USA Today, titled “It’s a hard time to be a charity.”  The article starts by discussing the impact of the Freddie Mac financial woes on its charitable arm and thus the nonprofits and programs that received funding from them. 

The article goes on to state, “The economic crisis threatening the nation with the worst recession in decades has set off tremors among non-profits and charities large and small that rely on donations from Wall Street, industry and average Americans.  The potential impact is just now taking shape, because 2009 grants from many philanthropic foundations are still being set and the end-of-year holiday giving season is opening. Although it’s difficult to draw broad conclusions from reports by individual charities, many non-profits say they are feeling an economic pinch.”

“This is the worst fundraising environment I’ve ever worked in,” says Jeffrey Towers, chief development officer for the American Red Cross, which won promises of $100 million from Congress this month after 2008’s hurricanes, tornadoes and floods depleted the group’s disaster-relief reserves.  The Red Cross is suffering as much as a 30% drop in responses and contributions from new donors, and corporate donations are “coming in at lower amounts.”

The article ends with “”Many charities are between a rock and a hard place, being asked to do more with less,” says Ken Berger, president and CEO of Charity Navigator, a large independent U.S. charity evaluator.

If there’s any so-called bright side, he says, it’s that the economic crisis could force redundant, inefficient or otherwise weak charities to merge with stronger organizations or simply shut down, reducing the competition for contribution dollars.”

It is an interesting article, you should read it.  Click here.