Some charities are close to folding

SALT LAKE CITY — Some advocacy groups working with Utahns living on the edge are financially on the edge themselves, according to a new study of the state's nonprofit organizations.

A year-long review of charities during the recession by the Community Foundation of Utah shows that economic calamity in general and the record demand for emergency shelter and food is putting a strain on nonprofit groups, a situation that the study's author sums up as "a perfect storm."

Just looking at the financial side — capital reserves, endowments and collaborations among nonprofits — shows that like the individuals and families they serve, "nonprofits regularly find themselves one crisis away from being impoverished themselves," said Fraser Nelson, Community Foundation executive director and lead author of the study.

In short:

35 percent of agencies have no reserves and live donation to donation.

60 percent report some reserves, but 40 percent of those are tapping into their savings or planning to do so shortly.

10 percent of the 154 organizations responding to the survey have an endowment that generated funds.

That money, according to the survey, is not going for executive pay, as 40 percent of Utah's nonprofit executive directors took wage cuts, refused raises or took other actions including volunteering full time. About 30 percent of nonprofit managers are doing the same nationally.

The situation isn't a result of nonprofit agencies acting alone or solely in their best interest, according to the study.

More than 70 percent report they collaborate with one or more agencies to improve operations, and 72 percent of those say they are better able to do their jobs because of it.

Twelve organizations merged with another to meet higher demand.

In response to the "all-for-one" approach the past year, the Community Foundation is establishing special organization endowments on behalf of Utah nonprofits, said Greg Warnock, managing director of the venture capital firm Mercato Partners and the foundation board chairman.

Just like investments in the private sector signal commitment to a better future to the entire community, special endowments to the nonprofits ensure "that Utah's social sector enters the next recession stronger than before," Warnock said.

A full report and more information can be found at www.utahcf.org.

e-mail: jthalman@desnews.com