Nonprofit Finance Fund's 2014 State of the Nonprofit Sector Survey has been released, and Donors Forum would like to share with you data on some of the most important trends affecting the Illinois nonprofit sector this year.

Donors Forum helped promote participation in the survey among Illinois nonprofits. 

Leaders from more than 5,000 nonprofits nationwide (266 in Illinois) participated in this sixth annual survey. Respondents collectively paint a picture of a sector that cannot keep up with high demand for its services, while struggling to find the balance between meeting short-term needs and long-term sustainability. Many Illinois nonprofits reported daunting financial situations, and said they are looking at new ways to secure the future of their organizations for the benefit of the people they serve.

The economic recovery is leaving behind many nonprofits and communities in need:

• In Illinois, 76% of respondents reported an increase in demand for services, the 6th straight year of increased demand. 83% of Illinois nonprofits expect that demand will continue to increase through 2014.
• 52% of Illinois nonprofits were unable to meet demand in 2013 — the highest reported in the survey’s history.
• Only 11% expect 2014 to be easier than 2013 for the people they serve.

Illinois nonprofits are owed a backlog of payments by the state

For many nonprofits, the funding landscape is changing. Of respondents who receive government funding, nearly half have seen support decline over the past five years. Not surprisingly (especially to those who attended Donors Forum’s recent State Budget Forum),  38% of Illinois respondents reported state government payments as coming in greater than 90 days late (only 11% of the full set of respondents reported their state government payments coming in this late).

Nonprofits are working to bring in new money. In the next 12 months:

• 30% of Illinois nonprofits will change the main ways in which they raise and spend money.
• 29% plan to pursue an earned income venture.
• 23% will seek funding other than grants and contracts, such as loans or other investments.

As a local example, the Chicago community service agency Erie Neighborhood House, which has a budget of roughly $7.5 million, had $1.5 million worth of unpaid state bills as of last month. The service agency is 70 percent government funded, with over 50 percent of its funding coming from the state. At Donors Forum’s recent State Budget Forum, Executive Director Celena Roldan-Moreno (pictured) suggested that going forward, her organization will be looking to switch its funding approach by placing more of a focus on pulling in additional federal dollars. Federal funding is often available for various service providers, Roldan-Moreno said, but it tends to be hard to get because the application process is so "daunting."

39% of IL nonprofits cited “achieving long-term financial stability” as a top challenge, yet:

• More than half of Illinois nonprofits (54%) have 3 months or less cash-on-hand.
• 28% ended their 2013 fiscal year with a deficit.
• Only 8% of Illinois nonprofits feel they can have an open dialogue with their funders about developing reserves for operating needs, and only 3% about developing reserves for long-term facility needs. On par with the national survey results, only 30% of IL nonprofits feel comfortable having an open dialogue with their funders about general operating expenses.

Nonprofits are taking wide-ranging steps to survive and succeed. In the past 12 months:

• 46% of Illinois nonprofits collaborated with another organization to improve or increase services.
• 49% invested money or time in professional development.
• 41% upgraded hardware or software to improve organizational efficiency.
• 36% of Illinois respondents conducted long-term strategic or financial planning and 50% plan to do so in the next 12 months.

For the first time, the annual survey delved into impact measurement, a core component of some emerging funding models such as pay-for-success:

• Illinois respondents said that more than 75% of their funders requested impact or program metrics.
• 77% agreed that the metrics funders ask for are helpful in assessing impact.
• Not one Illinois nonprofit reported that their funders “always cover the costs of impact measurement;” in fact, 70% said costs were rarely or never covered.
• Illinois nonprofits reported top barriers to impact measurement as not having enough staff or time or the right staff expertise (66%) and not having the resources to hire outside consultants to help collect data (27%).

Explore the data for yourself!

Full survey results, along with an interactive survey analyzer and a look at trends over the past six years, are available on the Nonprofit Finance Fund website.

New this year, the Survey Analyzer features querying that make the data more usable for local areas. It includes more options to filter the data by sub-sectors, budget size, geography and other dimensions, as well as the ability to compare any filters you select against the national results. You can download any of the individual charts by clicking the ‘download’ button in the upper right hand corner of any chart — making it easy to drop graphs into PowerPoint presentations, reports, and more.

Explore the data — we invite you to share what you discover in the comments below and on social media. If you'd like to find out what additional slices of the survey data are available, please email Nonprofit Finance Fund at [email protected].

— Kathleen Murphy