The Less Visible — but Powerful — Fund-Raising Losses Caused by the Recession

Nonprofit groups are facing some easy-to-identify challenges with the recession — decreases in donations from individuals, dwindling endowments, and declines in government support.

But Kelly Kleiman, a former nonprofit consultant and author of The Nonprofiteer, notes that charities are facing some other, less visible, losses.

Ms. Kleiman notes that declines in retail sales are likely to cut into the money some charities earn from corporate marketing arrangements in which they receive a portion of the revenues from the sale of products.

She also points to a recent New York Times article that some nonprofit groups that organizations that rely on the interest earned from lawyers’ trust accounts to pay for legal services for low-income clients are facing revenue shortfalls. With interest rates sagging, the amount of money generated from these accounts has dwindled.

“Eventually someone has to pay,” she writes. “Here’s hoping our new President is inspiring enough to carry people past the shock of discovering that if they really want to give to charity, merely going shopping or passing along the interest on someone else’s money isn’t going to be enough.”

Is your organization facing unexpected revenue cuts in areas such as corporate marketing deals? Click on the comments link below this post to share your experience.