The Christian Leadership Alliance recently released a report on a study conducted for them by J. David Schmidt and Associates on the effect that the current economic downturn is having on evangelical parachurch organizations, denominational offices, camps, and other nonprofits. Two hundred fifty organizations participated in the study.
Many of the results are what anyone might expect: Donations are lower than the previous year. Executives have responded by cutting personnel, cutting travel, and freezing infrastructure improvements and raises.
Christian nonprofit executives are largely not discouraged about the future, but neither do they anticipate the economy recovering any time soon:
Leaders were given six different scenarios for the economic road ahead. Interestingly:
- 31% held the opinion that we are in a typical recession and we’ll be out of it in a year or so, returning to “normal” economic growth.
- 3% felt like the economy was in a rebounding phase and that “normal” would return within months or sooner
But the central tendency in the responses was a more challenging view:
- 32% said this recession is unique and has caused permanent economic damage that is taking us into an era of undefined new normal.”
- 27% said we are in a deep and long-sustained recession that will last years before returning to “normal” economic growth.
- 8% see global decline, with a decade or more of economic malaise, negligible or no economic growth, and a long climb back to “normal.”
Taking these three groups together, approximately two-thirds of the respondents foresee a long and challenging road ahead.
(Source: Executive summary, page 6)
The executive summary ends with 10 best practices:
Respondents shared a range of best practices or actions they have taken in light of this situation. Common themes that they would recommend to others include the following:
- Place a high priority on prayer.
- Keep more cash in reserves.
- Communicate effectively and openly with staff, stakeholders, and donors. Keep them informed; be honest and transparent.
- Engage staff and your team in brainstorming solutions and strategies.
- Seek wise counsel.
- Don’t be afraid to make hard decisions; make tough choices and don’t delay them.
- Budget conservatively.
- Stay focused on your mission.
- Think outside the box. Be open to innovation — see what you can do smarter, more efficiently, and with greater impact.
- Develop a long-range strategy, and plan for contingencies.
(Source: Executive summary, page 8)
Find out more about the 2009 National “Economic Outlook Survey” and purchase the complete report here.
Find out more about J. David Schmidt & Associates here.
Read the 10-page executive summary of the report here (PDF).
