Why Nonprofit is Big Business in a Failing Economy

Website Photo Credit – Symbols of Love Organization www.symbolsoflove.org  By Richard Peacock

Nonprofits are becoming the majority.  More predominately now, than ever before.  The reason you ask?  Well we have to start at the beginning of the entire economic meltdown to obtain that answer.  In a failing economy cash is king, many businesses which have failed have done so because of the lack of cash flow and a failing economy is a direct result of cash hoarding.

The current economic situation is very similar a stock market meltdown; the shareholder (consumer) looses faith in the stock (services & products which businesses sell).  The investor (consumer) at which time, sells the stock which they are invested in, off at market.   If the investor then begins to fear the entire market may be flawed, the investor becomes opposed to the idea of re-investment.  Thus, driving the stock further into the ground, as a chain effect starts to take place as a direct result of the investor becoming poisoned by fear.

The investor (consumer) sells the stock (service and/or products which business have to sell), the stock at which time drops in value (cash flow recedes) as other investors now begin to  “lost faith” in this particular stock (unwanted product and/or service) and begin to sell off their shares as well.  As fear continues to prevail and spreads like an epidemic, affecting many of the other stocks (products/services) which reside on the market (economy).  The media assists in the administering (broadcasting) of this poisonous venom (bad news) as it continues to interject it into an already failing system (the economy).

Those who have “lost faith” in a particular stock (product/service) soon thereafter sell all shares within their possession (cease their purchase of services/products).  The stock market plummets to the ground (economy).  Businesses then begin to dry up; as they grasp at new ways to “cut expenses” they begin tightening up their purchases as well eliminating many of their office supplies and other unnecessary expenditures.  As these struggling businesses and now consumers alike, have eliminated the purchase of such products and/or services.  This in turn, affects the businesses, which were at one time were financially supported by the consumers purchase.  As the consumer has now deemed that particular service or product produced obsolete.

Businesses begin to cut back on payroll, which affects their employees’ paycheck amounts, and as a direct result of a “paycheck on a diet”, the employee then starts similar cutbacks within their daily lives and home product consumptions, creating a vicious domino effect, as they continue to cut their finances and or expenditures, other businesses feel it.  Eventually businesses begin layoffs as they attempt to offset their losses and ride out the recession, these businesses eventually begin to dry up (cash flow) and ultimately fold as the cash hoarding continues.

With many of the businesses that once succeeded in a “good economy” having now failed and become nonexistent, and former employees of such businesses now out of work, out of money and in many cases without the necessary funds to maintain food, clothing, shelter & health care.  What type of business would be desperately needed at this point?  And if the consumer can’t consume what type of business would be needed?  That’s right, assistance programs (nonprofit)!  You get an “A”!

Nonprofit is the business model that is the obvious choice.  In desperate times, with so many having lost their home, their income, and don’t know where the next meal will come from?  The only correct answer is nonprofit.  Nonprofit is necessary to rebuild a failing economic system.  When the system is weak it relies heavily on nonprofit, when it is strong it relies on job growth and massive consumer consumption.  Without either there must be something to fill the gap.  Nonprofit… it’s old business that’s new again for 2013.