Nonprofit Organizations face many unique challenges which are constantly changing with the shifting economic and working landscape. In addition to common challenges most businesses face such as keeping up with new technology, remaining compliant with regulatory requirements, and cyber security, nonprofits are faced with additional issues that may not be so obvious.
So, what are some of these challenges that might be flying under the radar and what can you do to overcome, prepare for, and/or manage them? Let’s take a deep dive.
Challenges Nonprofits are Facing Today
- Limited Government Funding
In times of economic uncertainty, unfortunately, nonprofits can take hard hits. If your nonprofit depends on government assistance (which many do) in the form of grants, matching programs, or safety nets, a shrinking government budget means that your organization might come up short on funding. One tool that can help solve this challenge is grant management software. Software such as AmpliFund, available through Welter Consulting, manages many aspects of the grant process including recording, management, and reporting, and having a clear picture of what funding is currently available to you as well as understanding what’s down the pipeline will help your organization navigate uncertainty.
- Income Stability and Accurate Budgeting
Sometimes, nonprofits may feel like they’re already running on a shoestring budget, but when that’s paired with the anxiety over an impending financial crisis, nonprofit organizations might feel that shoestring pulling a little thin. By practicing financial discipline and establishing a robust financial framework, your chances of understanding the real state of your budget are going to be much higher. Your organization must be willing to have difficult conversations about funding and long-term viability which are not only necessary but will also help you navigate income instability in the long run.
- Pressure to Perform
Hopefully your nonprofit organization already has a strong mission statement and depending on the longevity of your organization’s founding, you’ve enacted programs that reflect and carry out that mission. However, when funds are running tight not only governmentally but in the general public, your organization’s ability to perform and carry out your mission may very well be what determines your funding. Donors and contributors are much more likely to continue to support your organization if the results of your mission are clear and consistent.
- Ignoring the Bottom Line
As your organization considers software, social impacts, and funding, the “bottom line” may fall off to the back burner and it’s crucial that as a nonprofit, you don’t let this happen. Sometimes, nonprofit workers wear many hats and so there might not be one dedicated employee keeping an eye on this bottom line. As your organization focuses on the mission and what needs to be done to carry that out, make sure you’re still using the right tools and/or software to recognize and understand where your bottom line lies and then, continue to track it as you move forward. Task someone specific or engage the whole staff to have a clear picture and way to track your organization’s bottom line.
- Scouting and Retaining the Right Talent
Competing with the for-profit sector when it comes to recruiting can be a daunting task. Those companies often have more lucrative assets which can make it difficult to compete for potential new hires, but it’s important to focus on the positive here. Jobseekers who are attracted to nonprofit work are often passionate about whatever cause and/or mission that your organization supports. So, when you’re seeking talent, look for individuals who share the same passion as your organization. Your company may not be able to compete with the salaries offered in the for-profit world, but nonprofits can offer jobseekers the opportunity to participate in real change.
Also, it’s important to consider the retention of your dedicated staff. If your organization is not in a place to take on new employees, study who you do have and be sure that you’re investing in them. Ensure that your team remembers why they came to your organization in the first place—keep up the passion for your mission and make sure they have what they need to do that, too.
- The Need for Nonprofits …
As our country sees a rise in homelessness, poverty, and other social hardships, the need for nonprofit services is rising too. Because of this, as the demand for resources rises, so does the demand for funding, staffing, and availability. As a nonprofit organization, it’s important to keep your finger on the pulse of whatever it is your organization is supporting. For example, if your nonprofit’s mission is to help people experiencing homelessness, you’ll want to keep your eye on those statistics in the area(s) you serve so that you can plan as best you can.
- … But also, the Decrease in Need for Nonprofits
Hopefully, as a nonprofit organization, you find yourself engaging in programs that help you continue to achieve your mission. But if you find yourself too successful, it’s possible you might run out of work to do and end up having to scale back. If you find that your organization is having a huge impact in the area in which it’s focused (which we hope that it is!) but to the point that you might run out of work, it’s a good idea to plan on diversified versions of your mission statement; or ways in which you can branch out so that you can continue to make an impact even when parts or all of your original mission are complete.
Navigating These Challenges: You’re Not Alone
There’s no one answer that’s right for all nonprofits, but now is the time to recognize and face these challenges head on. Working together with your teams, colleagues, and community can help your nonprofit organization adapt and adjust to obstacles you may be facing. Also, we’re here to help.
Welter Consulting
Welter Consulting bridges people and technology together for effective solutions for nonprofit organizations. We offer software and services that can help you with your accounting needs. Please contact Welter Consulting at 206-605-3113 for more information.
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