The nonprofit sector in the United States comprises 1.6 million organizations with an aggregate budget of about $820 billion. Ranging from grassroots groups run on $25,000 a year to multimillion-dollar charities that serve thousands of people, nonprofits are funded by government fees and grants, private-sector fees, and private giving by foundations, corporations and individual donors - traditional funding sources that are under severe pressure as a result of the lingering recession.

Likewise, America's universities face unprecedented challenges and budget deficits 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. These pressures are placing core academic missions of teaching, research and outreach at increasing risk.

Looking at other recent significant nonprofit trends, three have emerged:

• A 5% annual rise in the number of organizations, which is outpacing the growth in funds and leading to intense competition for donor dollars
• A movement toward "venture philanthropy," in which donors view grant making as "investments" that reap "social returns" - an approach that reflects the mindset of venture capitalists
• Growing interest in adopting traditional business practices

• 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.

Bain's Nonprofit and Public Sector experience

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

• Assisting arts and tourism organizations (such as the Toronto Symphony Orchestra and the John G. Shedd Aquarium in Chicago)
• Helping youth and social-service agencies (Boston's City Year program, the UCLA Johnson Cancer Center Foundation, America's Promise)
• Aiding municipalities (San Francisco's efforts to address homelessness, building a Green Technology Strategy for Chicago)

Bain's Higher Education experience

Bain has led dozens of projects over the past 20 years, working with both for-profit and non-profit universities, public and private, in the U.S. 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 just 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 >$85M in cost savings options (5% of operating budget) across a range of administrative functions. You can view our final report at http://universityrelations.unc.edu/budget/.
• An Ivy League university, where we have launched implementation of a program targeting $90+ million in annual administrative cost savings, plus identified significant alternative revenue growth opportunities.