The global nonprofit sector is facing a double-whammy - rising demand for services amid an increasingly constrained supply of resources. On the demand side, surging populations have led to widespread food and water shortages, chronic lack of education and crushing poverty. Wars and violence continue to rage, while social exclusion and abuse undermine both developed and developing societies. Experts agree that climate change and environmental degradation must be tackled on a global scale. Just as needs are escalating, however, raising money and other resources has never been more difficult. Individual and corporate giving have stayed reasonably robust through the economic turbulence, but with government budgets over-stretched, a key source of funding for nonprofits will be constrained for some time to come.

Yet this challenging outlook does have a silver lining. New forms of philanthropy are developing. Mega-foundations like the Melinda & Bill Gates Foundation, the Clinton Foundation, the Children's Investment Fund Foundation and the Jet Li One Foundation are bringing not just funds but a more strategic and results-oriented approach to social engagement. Smaller venture philanthropy funds are applying venture capital and private equity disciplines to social "investments" in nonprofits. Social enterprise is combining the power of for-profit motives with nonprofit aims.

Government

Government spending now represents about 20% of the $60 trillion total global economy [1]. The public sector's influence comes directly, through government entities, state owned enterprises and funding of other institutions such as nonprofits, as well as indirectly, through regulation and oversight. The public sector has begun to grapple with major challenges: rising costs (coupled with growing deficits), shifting centers of economic activity, a burgeoning war for talent and increasingly demanding "customers" - to name a few. Recently, the use of stimulus funds and regulatory reform has further blurred the lines between public and private entities. Both long-term trends and recent events have forced the public sector to adopt lessons from private enterprises in several areas, such as: overall strategy, performance improvement, organizational effectiveness and change management, IT infrastructure and customer loyalty approaches.

Higher Education

Likewise, universities are reacting with determination and creativity to the new challenges they face. Budget deficits have mushroomed following sudden declines in endowment values, deep cuts in state education funding, and limits on tuition increases that can be passed along to already financially burdened students and families. All these trends are making the operating environment for universities particularly difficult. These pressures are placing core academic missions of teaching, research and outreach at increasing risk. This has created a need to create deficit-planning scenarios. As a result:

• Schools are closely examining their operations and organizations to determine which administrative support functions, and redundancies, are diverting scarce resources away from higher education's core purpose.
• They're also finding ways to rationalize traditionally decentralized and highly complex organization structures; ones whose governance processes often produce isolated organizational entities, with widely disparate service levels and unworkable spans of control.

Since its inception, Bain & Company has provided pro bono strategy consulting services to more than 800 nonprofit organizations. Our efforts have been directed toward:

• Supporting educational organizations
• Helping economic and social development
• Assisting arts and sports organizations
• Working with foundations and venture philanthropy funds

Bain offices worldwide have long worked to strengthen our communities. In addition to extensive investments in pro bono consulting, we also engage as volunteers, serve on nonprofit boards and sponsor fundraising drives. In January 2000, the Bain partner group and a number of U.S. foundations funded the creation of The Bridgespan Group, an independent, 501(c)(3) nonprofit organization dedicated to applying leading-edge management strategies, tools and talent to help other nonprofits and foundations achieve greater social impact. The Bridgespan Group currently serves clients out of its Boston, New York and San Francisco offices.

Bain's Government consulting experience

Over the years, Bain & Company has provided strategy consulting services to more than 800 public sector and governmental entities and nonprofit organizations. Our efforts have been directed toward:

• Strategic planning with government agencies
• Supporting state-owned enterprises
• Working with government entities to realize social goals

Bain's Higher Education consulting experience

Bain has led dozens of projects over the past 20 years, working with both for-profit and nonprofit universities, public and private, in the US and internationally and with multiple academic medical centers. We have helped these institutions on strategic issues such as performance improvement, operating efficiency, cost management and reduction, growth strategy, organizational effectiveness and funding strategy, to highlight a few. Among recent university clients we have served have been:

• The University of North Carolina at Chapel Hill, where we helped UNC identify more than $85 million in cost savings options (5% of operating budget) across a range of administrative functions. You can view our final report at http://http://universityrelations.unc.edu/budget/.
• An Ivy League university, where we have launched a program targeting more than $90 million in annual administrative cost savings, plus identified significant alternative revenue growth opportunities.

[1] World Bank, Development Prospects Group, December 10, 2009