A report conducted with SeaChange Capital Partners and GuideStar titled, "The Financial Health of the United States Nonprofit Sector" found:
7-8% of nonprofits in the US are technically insolvent with liabilities exceeding assets
30% face potential liquidity issues with minimal cash reserves and/or short-term assets less than short-term liabilities
30% of US nonprofits have lost money over the last three years
~50% have less than one month of operating reserves
Risk management can reduce the likelihood of financial distress. It should be an important part of every trustee’s duties of care, loyalty, and obedience. A webinar about the report can be viewed here.
In addition to the national report, Oliver Wyman has produced two highly cited regional specific reports on the nonprofit sector, one for New York and one for Philadelphia. Both reports were conducted with SeaChange Capital Partners and GuideStar and can be downloaded below.
A more detailed examination of the financial health of one specific subsector (the human services) was contained in Oliver Wyman and SeaChange’s report “A National Imperative: Joining Forces to Strengthen Human Services in America,” sponsored by the Alliance for Strong Families and Communities and the APHSA. Additional details can be found here.
