Why Do Non-Profits Suffer?

An economic downturn can leave non-profit corporations struggling to meet rising financial demands. People who provide the backbone of many non-profits simply can’t any more. Companies that would support a non-profit organization need to cover payroll instead. Or they simply support the “wrong” organizations, ones that won’t help the people who need it.

The irony is that when non-profits are needed most is when they have the hardest time finding funding. However, what people often don’t realize is the importance that non-profits have to a viable and lasting economic recovery. In fact, their importance is such that they too are potential candidates for federal stimulus funds. And for good reason.

What Non-Profits Can Do

For one thing, non-profit corporations can provide valuable and needed services to struggling families. This can be in the form of cheap or free housing, assistance with buying necessities, or help with medical bills & other debt services. Of course, these are only a few things that make it easier for an individual or family to live.

The United States and much of the world is based on a consumer economy. That is to say, our economic health is rooted primarily on how many people are purchasing the things that are produced and the services offered. Frequently, there is an excess of supply and the potential demand is going toward the purchase of the necessities of life. In other words, anyone not in a business directly related to food or shelter suffers. Similarly, those in the food/shelter-related industries find themselves doing less well as people choose to settle for less than they would otherwise want. Non-profits can relieve some of the burdens from families and individuals that allow them the opportunity to spend their money in other areas.

Job Training

A less obvious, but equally important area in which non-profits can contribute to economic growth is job training. Being largely volunteer-based, non-profit and not for profit corporations are more likely to take on people to work for them. That being the case, working for Habitat for Humanity, for example, can give valuable experience in the construction industry that makes a person more employable. With the call for infrastructure spending, this could potentially translate into a full-time job. All corporations, non-profits included, have clerical work to get done. Time working with children’s charities give potential employees knowledge of how to work with kids in schools and daycares. Not only do people get a head start on training that would otherwise cost businesses time and money, but it contributes to the continued existence of the non-profit.

There are several ways that non-profit corporations, while contributing very little to the economy directly in terms of products or spending, are contributing to the recovery efforts. This is why it’s vital that any recovery plan takes into account and provides for the continued existence of non-profits.