Surviving the Downturn: Environmental Nonprofits Face a New Economic Reality
The groups that act as stewards for the earth’s oceans, land, water and wildlife are facing a new battle: the poor economy. With the national unemployment rate hovering around 9.5%—the highest it’s been in 25 years—and more than 14.5 million Americans out of work, funding for the nation’s large and small environmental nonprofits has stalled, forcing them to reexamine their core priorities.
Leaders of these nonprofits say they have cut jobs, eliminated annual events, reduced the number of issues they can tackle and have watched annual donations dip due to the economy.
“Obviously we feel the effects, it’s not like we are immune,’’ says Oceana Executive Vice President Jim Simon. To be clear, Oceana, which has 300,000 supporters worldwide and saw its cash revenue increase nearly 20% from 2007 to 2008, is not planning any layoffs or cutbacks for 2009. About 70% of their funding comes from foundations, which Simon says lag a bit in responding to the economic climate. “That’s because they tag their giving against an average of their income over three years,’’ he says. “Also, we had planned already on a little bit of surplus for revenue over expenses and had a working reserve.”
But it’s not all good news.
“We have had funders who have said, ‘we are going to have to give you a little less this year than last year, I’m sorry.’ We do have foundations that we’ve approached that have said ‘we are not taking on new grantees this year,’’’ he says.
At the Environmental Defense Fund, Executive Director David Yarnold says the organization has “cut back some” in anticipation for next year. “We’ve had to make some hard decisions. We cut 10% of our headcount, which is always painful…”
However, because the organization has grown by 40% over the past four years, the 10% cut was more like finding a new benchmark from which to grow again, he says. “Thirty-six people lost their jobs. It’s always bad because it’s somebody’s life, but we were able to make most of the cuts through voluntary buyout plans. Those were people who were ready to do something different in life,’’ Yarnold says.
For his organization, one of the advantages of the downturn is having the ability to cut costs by bargaining with everyone from phone companies to insurance companies. “We are taking advantage of new technologies,’’ says Yarnold, who has headed the organization for four years. “We are doing what a smart business would do, but we just happen to be a nonprofit.” The group has also cut about $1 million in administrative costs, he says.
“We are fortunate, a lot of our major donors were hit hard but for many of them we remain at the center of their philanthropy,’’ Yarnold says.
Still, to cut costs, the organization will not continue work on at least two issues, including international finance regulations and port pollution. He says: “All of this is responsive to the question that our board asks: ‘are you certain that you are adding value every time you get involved in something?’ So, this was a good opportunity to say, ‘sure we add value, but can we add more value elsewhere?’”
The Nature Conservancy has also made cuts, reducing its staff by 10% because of the recession. “Unfortunately, the recession and subsequent de-clines in revenue require that we implement staff reductions to further reduce expenses. These reductions are designed to keep the Conservancy on a sustainable funding path and positioned well to capitalize on future conservation opportunities. We regret that these reductions were necessary,’’ read a statement from Mark Tercek, president and CEO of the Conservancy.
But there may be a silver lining to the cutbacks, layoffs and reduction in advocacy work: Environmental groups are joining forces. The newly opened David Brower Center in Berkeley, California, and the Alliance for Sustainable Colorado in Denver house environmental nonprofits under one roof, giving tenants shared common space, a break on rent and perks such as on-site showers and faster, cheaper Internet service.
“We are able, as a collective, to afford higher speed Internet and lower cost Internet and phone service, which any one of us couldn’t afford alone,’’ says Alliance for Sustainable Colorado Founder John Powers. Rents are about 30% below market value, and the nonprofits even score great deals on desks and chairs because one of the 27 tenants has made it her mission to keep office furniture out of landfills, according to Powers. And the benefits extend beyond bottom-line savings. “One of the reasons to get groups together is to be taken more seriously,’’ he says.
Peter Buckley, the founder of the David Brower Center, understands that concept. In an age when there are dwindling employees in offices and a surplus of open desks, morale can plummet. He says that at the Brower Center there is constant energy.
“My impression is that everybody is very happy being in the building and it’s good for their mission. They are doing better work, more effective work,” Buckley says. “There are meetings and events…film screenings, speakers, all kinds of stuff going on. For me, helping people be effective with their mission is the number-one priority.”