A Coming Storm
I am not an economist. Nor am I a soothsayer. However, I see some troubled waters ahead, all based upon evidence of the day.
It might be because I spend most of my time in the healthcare nonprofit space, but I am watching the financial reporting on healthcare systems, either the first half of 2022 or their Q2 reporting. At least in healthcare, things don’t look very good. A number of larger systems are reporting enormous losses in either the first six months or in the second three-month period of 2022. Some of the reporting is nearly at $1 billion in losses. No matter how big you are, those numbers will eat you up quickly.
There are lots of reasons for it. Inflation is one. The shortage of nurses and overall employees is another. But at the end of the day, healthcare is beginning to realize that it’s too big to substantiate itself over the long term. It’s now over 20% of our gross domestic product.
With that said, I’m seeing similar things in social service nonprofits. I’ve got a few friends who are on university boards, particularly smaller private schools, and they’re concerned about the diminishing number of incoming students. Also, the decreasing retention rate is catching their eye. Tuition dollars drive a small school’s financial success.
And when you add on top of it the challenges of the stock market and people’s concern about the economy, donations are down. At least from what my ear hears. We won’t know for sure until long after this year is completed.
In the end, I think there is a storm coming. Do you have on your galoshes and your umbrella ready to go? The numbers indicate a challenge. The size of the storm is unknown. But our ability to prepare for it is totally within our control.
