Study Finds Washington-Area Charities Dangerously Low on Cash

A new report finds that even before the recession struck, more than half of Washington-area nonprofit groups had dangerously low operating reserves, leaving them vulnerable in a period of sharply declining revenue, The Washington Post reports.

According to the study by the Urban Institute, 57 percent of Washington-area charities had less than the industry standard of three months of reserves in the bank in 2006. Nearly half of those agencies had no operating reserves.

“It’s an amazingly high percentage” operating below the three-month margin, said Thomas H. Pollak, the report’s author. “In some cases, they got too accustomed to the economy zooming along and didn’t appreciate the risk they were taking.”

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