With the fourth quarter of the year coming to an end, El Pomar Foundation’s grants office has had the opportunity to review many requests throughout 2014. In the first three quarters of El Pomar’s competitive application process in 2014, we have received more than 300 requests and noticed a financial trend that is worth noting.
As we have reviewed the expenses of organizations submitting applications, we learned that 66% of the organizations are increasing expenses for the current year compared to last year. The median increase is 20%, while the average budget increase is over 170%. To provide some context for growth, we conducted research on current economic growth trends and found that the Rocky Mountain Region (Colorado, Utah, Wyoming, Idaho, and Montana) has had a Gross Domestic Product growth of 4.1% over the past year. We also learned that the projected growth in the United States for 2015 is 3.7%. While these are not staggering numbers, they are positive signs of growth and significantly less than the projected growth of expenses for many nonprofits. These significant increases represent not only higher expenses but also the need for increased revenues.
During the recent economic downturn, we noticed notable declines in nonprofits’ revenues commensurate with the broader economy, combined with nominal declines in expenses. While the economy has gradually begun to rebound, nonprofit expenses have exhibited greater growth expectations than that found in the private sector and the general economy. Unfortunately, many nonprofits have not seen similar growth in revenues and support comparable to their expected growth in expenses.
Two criteria that El Pomar’s Trustees evaluate organizations on are accountability and leadership. Financial management is one of many components of these two features. While we understand that all nonprofits could use additional resources to serve more clients and increase impact, the amount of resources available is not growing at a rate comparable to the expense growth in applications El Pomar has received. As the end of the year approaches and planning begins for 2015, we hope to see nonprofit leaders with reasonable expectations of their organizations’ expenses that are comparable to the growth experienced in the broader economy.
As your organization considers submitting an application to El Pomar Foundation, please take the opportunity to contact us at 1-800-554-7711 or to read El Pomar’s grantmaking guidelines on our website (www.elpomar.org). Thank you for the many ways you impact Colorado to make our communities a great place to live.