The San Diego Foundation Conducts Survey to Assess Financial Impact of Energy Crisis on San Diego Nonprofit Organizations

The San Diego Foundation's purpose is to improve the quality of life for all San Diegans. The energy crisis, with its increased utility costs, has had a significant impact on our residents and businesses, including nonprofit organizations. The San Diego Foundation has initiated a Community Capacity Building Program to identify critical organizational needs of nonprofits and to promote philanthropy to assist nonprofits in building organizational capacity to achieve their mission. In response to a growing concern regarding the local consequences of the state's energy crisis on nonprofit organizations, The San Diego Foundation developed a survey and asked for input from a random selection of San Diego County nonprofit organizations, big and small, from all regions of the county. The resulting data was analyzed with the support of the University of California San Diego Civic Collaborative.

• Has California's energy crisis had an effect on local nonprofits?

  Of the 80 nonprofit organizations that replied, 82.5 percent reported an increase in their utility costs. The other 17.5 percent of respondents were nonprofits whose utility costs are part of their lease agreement on their facility. Of those organizations that responded affirmatively to increased utility costs, the results indicate an average increase of 90 percent from February 2000 to February 2001. The range of increases in utility costs was from 44 percent to 271 percent!
  
  The most significant trend was the percent increase in utility costs compared to the size of the organization, based on its budget. Specifically, the greater the organization's budget, the larger the percent of the increase in utility costs. Nonprofit organizations with an annual budget under $250,000 experienced a 30 percent increase in utility costs, while a nonprofit with an annual budget over $5 million had an utility expense increase over 120 percent. Regionally, the North County Inland, East County, and North County Coastal regions experienced the largest average increases in utility costs, with all organizations in these regions reporting over a 100 percent rise in these costs.

• What are the consequences of increased energy costs on nonprofits?

  In response to the two survey questions regarding the consequences of the increased utility costs, nonprofit organizations responded as follows:
  
  

  • 15 percent will cut hours of services.

  • 15 percent will cut employer paid benefits.

  • 30 percent indicated they will reduce their operating expenses.

  • 39 percent stated they will reduce services to community.

  • 50 percent reported that they will limit organizational expansion efforts.

  These results indicate that most agencies would not ask their employees to bear the brunt of the increased costs, but that half of those that responded said they would limit their organizational expansion efforts. More than two-thirds of all Central San Diego, North City San Diego, and South County respondents indicated they would wait before implementing expansion plans. This was particularly true (55 percent) for smaller organizations with a budget of less than $500,000. Larger organizations tended to indicate that they would have to reduce services to the community.

  Respondents were also given a final opportunity to describe in a narrative format any other consequences that their nonprofit organization has experienced as a result of increased energy costs. Most responses included one of these four themes:
  
  

  • Organizations were taking energy saving measures as a result of increased costs.

  • Most nonprofits appear to be experiencing economic distress and uncertainty.

  • Some reiterated that they would have to reduce services to the community.

  • A small number described a personal impact on one or more employees.

• How will San Diego's nonprofits pay for their larger utility expenses?

  In order to pay for the increased energy costs, San Diego nonprofits indicated that they will take the following actions:

  • 77 percent of those surveyed will absorb the costs into their existing budget.

  • 53 percent indicated they will expand their fundraising activities.

  • 44 percent will seek increased funding from their existing donors.

  • 25 percent stated that they would raise service or membership fees.

  • 16 percent will use surplus resources from previous years.

  Though it appears most nonprofits will identify expense saving strategies to absorb these expanded costs into their existing budget, these charitable organizations will also be seeking additional or new funds from their donors and government contracts. The greatest concern is that the nonprofit sector appears to be absorbing the costs into their already tight budgets and then reducing their proactive efforts to expand their services and organizations. When asked to describe other actions they might take, many respondents offered proactive solutions to address their concerns for the nonprofit sector. The responses clustered around three primary themes:

  • Most want information on energy conservation for their programs and facilities.

  • Many endorse advocacy to insure the voice of the nonprofit sector is heard.

  • The respondents also want to develop cooperative and collective strategies in terms of advocacy and conservation.

• What are the next steps nonprofit organizations in San Diego County can take?

  Though the challenges of the current energy crisis in California seem enormous, the nonprofit sector can respond to these challenges as an opportunity to understand how social trends affect the sector and to use these challenges as an opportunity to find a united voice. Some suggested strategies include:

  • Increase awareness of the effects of elevated utility costs on the nonprofit sector in the San Diego region among key stakeholders.

  • Convene under a local interest group, such as the San Diego Association of Nonprofits (SanDAN), to articulate a local plan of action for advocacy and conservation.

  • Unite with the California Association of Nonprofits in their efforts to document the impact statewide and seek common solutions.

  • Set up a system to monitor legislation at the state and national levels that addresses the energy crisis and analyzes the impact of the legislation on nonprofits.

  • Disseminate information on successful energy conservation efforts by nonprofits.

• What can foundations and grant makers do?

  • Utilize this data to increase the awareness of greater utility costs on the nonprofit sector.

  • Support the convening and organizing efforts by the community.

  • Convene discussions among local and statewide grant makers on this critical issue.

  • Develop a grant program for energy conservation among nonprofits.