It's not just homeowners and businesses seeking bankruptcy protection in the cooling economic climate: Nonprofit organizations are hurting, too, and some aren't going to survive. With dwindling donations, tight loans, and stagnant state funding, social service charities and arts groups are running up huge debts, reports the New York Times. Under pressure to perform more like businesses, many are seeking protection as they reorganize or liquidate.
“Our expectation is that this is just the tip of the iceberg,” said the head of a trade association for nonprofit groups. One recent example: The American Musical Theater of San Jose filed for Chapter 7 after a group set to perform a much-anticipated production of Tarzan backed out. With no money to repay creditors (including season-ticket holders), the theater liquidated and laid off its staff. “We’ve gone through all the emotions here," said its leader, "shock, numbness, devastation, anger and tears.”