Nonprofits' liquidity struggles continue, leaving more charities vulnerable to cash crunches

New research from accounting firm BDO shows that American nonprofits continue to struggle with liquidity issues, leaving them vulnerable to downturns in the national economy or sudden changes in their fundraising fortunes. According to the firm's latest Nonprofit Standards benchmark report, roughly half of surveyed nonprofits have less than six months of operating reserves available to get them through a cash crunch. While the six‐month figure isn't necessarily “gospel” and might not apply to all organizations uniformly, it does make for a good barometer of an organization's ability to weather a sudden drop in donations—for example, if a major donor rescinded their support of a new initiative at the last second—or a broader turn in the donor landscape.