The Northwest Nonprofit Capacity report for 2016 recently released points to resiliency and advocacy throughout the northwest, with a healthy and growing nonprofit base. The full report may be accessed online for those interested in the comprehensive picture of nonprofit activity in our region.
Capacity-building, both for continuing existing work and creating growth for the future, remained a top concern for all nonprofits regardless of their mission. Among the areas of greatest concern are:
1. Human resources: All human resources activities were of concern, but the need for staff and expanded staffing was at the top of the list. Specific skills such as grant writing, fundraising, technology skills and other skills may be difficult to find for specific nonprofits. Maintaining and managing human resources for an organization remains challenging as well.
2. Facilities: Many nonprofit organizations hoped to improve their facilities and equipment. Capital campaigns to build new facilities or upgrade existing ones are a shared concern. Improving and updating necessary equipment also ranks high on the capacity-building needs.
3. Fundraising: There’s probably no nonprofit in the country that doesn’t wish it had better fundraising, but fundraising ranked third on the list of concerns for northwestern nonprofits.
4. Communications: Greater community outreach and awareness is a shared desire among nonprofits responding to the survey.
5. Strategy and leadership: Without exception, nearly all felt they needed to become more proficient at the business side of running a nonprofit. This includes improving leadership, strategic decision making, and other skills.
Five nonprofit, state-based associations participated in the survey. These included Alaska, Washington, Oregon, Montana and Idaho. Although serving a diverse array of needs, they all reflect a consensus around improved business practices, communications and community outreach, and additional resources to fulfill their mission.
Nonprofit Accounting: Gaps
One surprising result of the survey is that only 77% of nonprofits in the northwest have a written annual budget. About the same number have such a budget approved by a board, and use it. Slightly fewer agree that their budget is ‘effective.’
Budgeting is critical for nonprofits to remain healthy and viable. Understanding the nuances of your financial situation, apportioning funds accordingly, and diversifying income streams are all part of running a sound nonprofit.
Other key findings related to accounting show a significant lack of written fundraising plans. Only about 43% of respondents have a written plan, and approximately 33% find such a plan effective The remaining majority of nonprofits either do not have a plan at all or have a verbal plan agreed upon by their members.
Such haphazard fundraising efforts may lead to uneven income. Although grants, membership fees, and other funding may provide a solid foundation, without additional fundraising activities you run the risk of critical shortfalls should any of these routes fail to be productive in a given year. Diversifying fundraising efforts is just as smart as diversifying personal investments.
Perhaps most troubling of all is the lack of business planning among northwest nonprofits. Fewer than 25% have a written business plan. The old adage, “Those who fail to plan, plan to fail” may be true. A business plan also provides a solid base upon which a nonprofit can build and grow. Without it, your organization may suffer from mission or scope creep and unproductive activities.
Hopeful Signs, Room for Improvement
The report shows both many hopeful signs as well as room for improvement. Business strategies, financial management, and other quantitative disciplines must improve for nonprofits in the northwest to remain healthy.
The many hopeful signs, such as a strong commitment to change and growth, point to a positive outcome despite these limitations.
Welter Consulting
Welter Consulting offers financial reporting, compliance, and software to help nonprofits with their accounting needs. We focus solely on nonprofits, bridging the information gap between nonprofits and business disciplines. We are passionate about helping nonprofits success. For more information, visit us online or call 206-605-3113.
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