The Financial Health of the United States Nonprofit Sector examines the finances of more than 219,000 U.S. nonprofits for FY 2010-2014. The findings are sobering:
- Around 50 percent have less than one month of cash reserves
- Some 30 percent have lost money over three years
- Some 7-8 percent are technically insolvent
In this report, we provide some context setting with a brief overview of the size and scale of the US nonprofit sector and why its financial health matters. We look at the financial vital signs of the sector, analyzing key financial metrics segmented by size, sub-sector, and geography1. We describe practical steps that trustees and their organizations can take to strengthen their financial position. Finally, we offer some long-term ideas for how funders and the rest of the ecosystem can actively reduce the risks of financial distress in the nonprofit sector. We conclude with an appendix of tables summarizing key financial health indicators for the sector.