Financial crisis will kill nonprofits

At least 100,000 nonprofits nationwide will be forced to close their doors in the next two years as a result of the financial crisis, according to Paul Light, professor of public service at New York University. The financial crisis is already resulting in a steep drop in funding for these organizations, forcing them to cut their budgets, and eliminate staff and programs. Prof Light called on foundations to liquidate their assets to create a safety net for social services groups, or at the very least increase their annual pay-out rates from the current 5%, as one step toward solving the sector's problems. However, other experts said increased dollars from foundations wouldn't be enough to help these organizations make up for cuts in government funding and individual fundraising at a time when demand for their services was rapidly increasing.