Financial Crisis and Non-profit Sector

The audience and panelists agreed that NGOs from the US to Central Europe are facing significant impacts from the financial crisis, with steep drops in funding from trusts and foundations and corporations in particular. „The current financial crisis is a bigger problem than an opportunity“, stated Jack Stack. The crisis has affected negatively NGO endowments (where they exist), assets of individual and corporate donors, and the government expenditures. Government and institutional funding has yet to drop significantly, but is likely to decrease with future budget cuts, while the impact on funding from individuals is less clear, and in fact support from this source could actually increase as a result of the crisis.

Despite the significant challenges presented to NGOs by the financial crisis, all of the panelists were quick to note a heavy silver lining. As Stephen Bubb put it, “A crisis is just too good to waste – it is in a crisis that you can find opportunity for reform, renewal and regeneration”. NGOs enjoy significant public trust – or relative lack of mistrust, as Simon Panek pointed out – and therefore have an important advantage and role as partners for government and public authorities as well as corporations in addressing challenges.