A persistent gap between rising demand for services and lagging resources continues to pose challenges for the state’s nonprofits, according to a new report from the New Jersey Center for Nonprofits, released Thursday.
New Jersey Nonprofits: Trends and Outlook 2023, the center’s annual survey of the
nonprofit community, shows that nonprofits have experienced improved circumstances compared to the worst of the pandemic, but economic concerns, resource scarcity, the end of government aid programs and key federal charitable incentives, and ongoing racial inequalities are hampering their ability to address the ongoing escalating community needs . New Jersey’s nonprofit organizations are an important part of the economy, employing nearly 10% of the state’s private workforce.
The poll results were presented Thursday at a web briefing titled “The State of the New Jersey Nonprofit Community.”
“Nonprofits have consistently demonstrated their importance to the well-being of all New Jersey residents and as valuable government partners to our communities,” said Linda Czipo, CEO and president of the New Jersey Center for Nonprofits. “The survey underscores the need for resources and supportive public policies to assist nonprofits in this work.”
Czipo mentioned tax incentives for people who donate to charity as a much-needed policy change. Under current federal law, charitable donations are tax-deductible for only about 10% of taxpayers who provide information on their federal tax returns. A modest deduction for those who do not provide information was passed by Congress under the pandemic assistance legislation, but the deduction expired in late 2021.
New Jersey does not have a state income tax deduction for charitable giving,
although laws have been introduced to create one.
A third of survey respondents identified charitable giving and incentives for volunteering as one of the top issues affecting the nonprofit sector in the coming decade. Financial and financial concerns, strengthening bodies, providing enough staff, and planning and communication were also frequently mentioned.
More than 60% said their organization’s overall situation was better than a year ago, while only 10% said it was worse. Looking ahead to 2023, 62% predicted their situation would be better in a year. Only 2% felt their circumstances would get worse and 11% predicted little change and the rest were unsure about their prospects.
Other results of the survey are:
- Demand for services and rising spending still exceed funding – a long-standing problem with profound implications for program and service delivery in our communities. Nearly four-fifths (78%) of nonprofits surveyed said demand for services increased in 2022, but only 51% said funding increased over the same period. Likewise, 84% expect demand for their services to increase in 2023 and 82% expect spending to increase, but only half (52%) expect their funding to increase.
- Nonprofit organizations still face significant labor shortages that threaten their ability to meet the needs of the community. More than half (53%) of nonprofits with employees reported staff shortages, with an average vacancy rate of 19%. Key obstacles to filling vacancies included difficulty in offering competitive compensation due to budget constraints or lack of funding, problems in recruiting qualified employees for positions that require them, and competition for employment from other sectors.
- Promoting diversity, equity, inclusion and belonging as an enduring and conscious priority in all aspects of community service remains critical. Nonprofits that primarily served communities of color were more likely to engage in frontline services such as human services and health, where rising demand for services and rising spending are particularly acute.
“Nonprofit organizations have consistently demonstrated their importance to the well-being of all New Jerseyers and as valuable government partners to our communities,” said Czipo. “The survey underscores the need for resources and supportive public policies to assist nonprofits in this work.”
Support for the New Jersey Nonprofits: Trends and Outlook 2023 report was provided by CliftonLarsonAllen LLP (the SobelCo team joined CLA in February).
