<< Chapter < Page Chapter >> Page >

Although it is possible that there are purely internal explanations for the Society's rising costs, it is likely that the causes are primarily external. The strongest evidence for this is the fact that other nonprofit institutions share this tendency toward inexorable expenditure growth. A recent study of thirty-two prominent nonprofit institutions found that total expenditures rose at a nominal rate of 10.6 percent between 1972 and 1992.

Bowen, Nygren, Turner, and Duffy (1994), p. 168).
Similarly, a study of five major independent research libraries (institutions very similar in many ways to the Society) showed that between 1960 and 1993, their total expenditures rose at an average nomi­nal rate of 9.9 percent per year.
Bergman (1995).
The data clearly testify to significant upward pres­sure on costs at these types of institutions. Given such pressures, it is unlikely that these organizations can hope to balance their budgets through sustainable decreases in total expenditures without significant reductions in services.

Further evidence supporting this assertion emerges from the Society's 1992-1993 financial crisis. Facing mounting deficits and a growing threat of bank­ruptcy, the Society cut operating expenditures by 17 percent in fiscal 1992 and by 20 percent in fiscal 1993. To accomplish these cuts, the Society reduced its total workforce from a peak of 125 employees in the 1980s to a skeleton staff of just 35 employees in early 1993. The Society closed its galleries and suspended all public programs. There is a limit, however, to how much an organization can cut, year after year. For organizations with valuable collections and fixed assets, overhead and other fixed costs exist that cannot be avoided. Even though the Society had drastically reduced programs and services, its total operating expenditures in 1993 were still $5.3 million.

Such austerity measures have consequences. Most important, it is extremely difficult, if not impossible, for an institution like the Society to generate significant contributed income while it is inactive. Such institutions are expected to offer exhibitions, public education programs, and community outreach services. After a certain point, reductions in expenditures decrease the capacity to generate revenue, both earned and contributed. In the case of the Society, the 1992 and 1993 cuts did not balance the budget; in fact, the deficit actually increased in 1992 and was still $1.5 million in 1993.

The implication of the unremitting pressure on costs is clear: if institutions like the Society are to remain financially viable for the long term, their revenues must grow steadily—and presumably faster than the overall inflation rate.


Generating revenues that keep pace with an ever-expanding expenditure base is made more complicated by the fact that all nonprofit revenues are not created equal. Unlike the for-profit sector, where dollars received can be used for whatever purposes management and the board may choose, nonprofit revenues often come with strings attached. A donor may stipulate that funds given to an institu­tion be used only for a specified purpose, spent over an established period of time, or retained in perpetuity as capital. The types of revenues generated by a non­profit institution can be as important as the absolute dollar values, especially in a time of crisis.

Questions & Answers

how do you translate this in Algebraic Expressions
linda Reply
why surface tension is zero at critical temperature
Need to simplify the expresin. 3/7 (x+y)-1/7 (x-1)=
Crystal Reply
. After 3 months on a diet, Lisa had lost 12% of her original weight. She lost 21 pounds. What was Lisa's original weight?
Chris Reply
what is biological synthesis of nanoparticles
Sanket Reply
what's the easiest and fastest way to the synthesize AgNP?
Damian Reply
types of nano material
abeetha Reply
I start with an easy one. carbon nanotubes woven into a long filament like a string
many many of nanotubes
what is the k.e before it land
what is the function of carbon nanotubes?
I'm interested in nanotube
what is nanomaterials​ and their applications of sensors.
Ramkumar Reply
what is nano technology
Sravani Reply
what is system testing?
preparation of nanomaterial
Victor Reply
Yes, Nanotechnology has a very fast field of applications and their is always something new to do with it...
Himanshu Reply
good afternoon madam
what is system testing
what is the application of nanotechnology?
In this morden time nanotechnology used in many field . 1-Electronics-manufacturad IC ,RAM,MRAM,solar panel etc 2-Helth and Medical-Nanomedicine,Drug Dilivery for cancer treatment etc 3- Atomobile -MEMS, Coating on car etc. and may other field for details you can check at Google
anybody can imagine what will be happen after 100 years from now in nano tech world
after 100 year this will be not nanotechnology maybe this technology name will be change . maybe aftet 100 year . we work on electron lable practically about its properties and behaviour by the different instruments
name doesn't matter , whatever it will be change... I'm taking about effect on circumstances of the microscopic world
how hard could it be to apply nanotechnology against viral infections such HIV or Ebola?
silver nanoparticles could handle the job?
not now but maybe in future only AgNP maybe any other nanomaterials
I'm interested in Nanotube
this technology will not going on for the long time , so I'm thinking about femtotechnology 10^-15
can nanotechnology change the direction of the face of the world
Prasenjit Reply
At high concentrations (>0.01 M), the relation between absorptivity coefficient and absorbance is no longer linear. This is due to the electrostatic interactions between the quantum dots in close proximity. If the concentration of the solution is high, another effect that is seen is the scattering of light from the large number of quantum dots. This assumption only works at low concentrations of the analyte. Presence of stray light.
Ali Reply
the Beer law works very well for dilute solutions but fails for very high concentrations. why?
bamidele Reply
how did you get the value of 2000N.What calculations are needed to arrive at it
Smarajit Reply
Privacy Information Security Software Version 1.1a
Got questions? Join the online conversation and get instant answers!
QuizOver.com Reply

Get the best Algebra and trigonometry course in your pocket!

Source:  OpenStax, The new-york historical society: lessons from one nonprofit's long struggle for survival. OpenStax CNX. Mar 28, 2008 Download for free at http://cnx.org/content/col10518/1.1
Google Play and the Google Play logo are trademarks of Google Inc.

Notification Switch

Would you like to follow the 'The new-york historical society: lessons from one nonprofit's long struggle for survival' conversation and receive update notifications?