Non profit: The issue of financial management

An interesting article fromthe sandiego newsletter:

More than one-third of local charities are operating in the red, according to a report being released today by the University of San Diego .

That finding continues a long-running pattern: 30 percent to 40 percent of nonprofits in the region have reported year-end deficits since 2000.

The reasons could be slow or insufficient reimbursement from government contracts, a heavy demand for services and an overstretched drive to fill the void left by for-profit companies, said Laura Deitrick, director of the Caster Family Center for Nonprofit and Philanthropic Research at USD, which produced the study.

“I think it means that they’re underfunded and doing everything in their power to provide services,” Deitrick said.

The report is aimed at measuring the nonprofit groups’ economic impact, how well they are meeting community needs and how much confidence the public has in that sector.

Other findings include:

• Local nonprofit organizations employ more than 75,000 people — about 6 percent of the region’s work force.

• San Diego County has nearly 10,000 registered charities. That figure increased by 18 percent between 2005 and 2009.

• Most of those charities (93 percent) are small, employing fewer than 50 people.

• The public tends to believe that for-profit businesses are better at providing quality services (54 percent) than nonprofit groups (22 percent).

• The public is more confident about nonprofits acting on its behalf (47 percent) than for-profit businesses (19 percent).