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Tuesday, August 4, 2009

Charities Located In The Nation's Capital Have Limited Rainy Day Funds

As we've discussed previously on this blog, the charities that have the best chance of weathering the current economic storm are those that have 6 months to a year's worth of working capital (rainy day funds). That makes a new report, by the Urban Institute, showing that charities in the D.C. area have low reserves, very disconcerting. This particular study shows that more than half of the charities in the nation's capital have less than three months worth of working capital.

Our own analysis, from 2008, shows that D.C. charities have about the same amount of rainy day savings (about 8 months) as charities in other U.S. cities. In fact, we found that charities in Colorado Springs (about 3 months), Orlando (about 3 1/2 months) and Phoenix (about 5 1/2 months) were in a much more precarious position than those in D.C. On the flip side, the philanthropic marketplaces in St. Louis, Boston, and Pittsburgh all reported having at least a year's worth of working capital.

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