As a result of the 2008 recession and the ensuing economic fallout, increasing numbers of Americans have suffered serious financial woes. As unemployment rose, so did the number of people living in poverty and the need for social services. At the same time, credit became harder to obtain, and funding began to decline, especially from government sources. These conditions have persisted and are now particularly challenging for small "safety net" social service organizations that rely on government funding. These organizations, which always run lean, are now stretched even further and in danger of reducing services or even closing their doors.
The following report draws on Nonprofit Finance Fund's experience working with 22 nonprofits through the Capital and Capacity for Economic Recovery (CCER) program in Greater Philadelphia, as well as our 30 years of work with small social service organizations nationwide. It highlights these nonprofits' common financial challenges and offers suggestions for how they and their supporters can enact financially stabilizing practices in response. We draw on real-life lessons from nonprofits that used small capacity grants and financial training opportunities to create positive programmatic and infrastructure shifts for the benefit of their clients.