Top 4 challenges for nonprofits and how to fix them
Seamlessly accomplishing the mission. Throwing a record-breaking annual gala. Mobilizing more volunteers for the cause. Those are the highs.
But for nonprofits, struggles can pop up in a myriad of places, causing the organization to refocus and reenergize to accomplish its goals.
The mission of any nonprofit is its north star. And money is raised to fund that beaming light.
But add to that office expenses, personnel, and incidentals, and that mission’s glow can get dimmer and dimmer.
Even more, only 20% of U.S. nonprofit funding is unrestricted. This means that not all donation dollars are created equal or able to be used at the discretion of the nonprofit. Money raised can’t always be used to keep the lights on, for necessary research and development, or to fund new projects.
Donor appeals should be specific and targeted toward supporters aligned with your needs.
- Have a group interested in professional development? Ask them to fund a workshop for your staff.
- Working with donors who like innovative ideas? Create a pitch for a new after-school program.
There are more than 1.5 million registered nonprofits in the U.S. alone.
Of those 1.5 million, many have overlapping missions. Sure, this could be seen as a positive. More hands on deck doing the good work.
But it also points to an over-saturation issue that many nonprofits face. How does a nonprofit stand out in such a large pool?
Lack of visibility has obvious ramifications when it comes to funding. If donors haven’t heard of you, they aren’t sending you money. It also causes trouble when seeking support from other community organizations and government agencies.
Consider the positives of partnerships to increase visibility.
Collaborating with a more known organization or corporation not only increases the ability to achieve the mission; it also helps promote the nonprofit itself.
Without the proper technology and software to collect and report data, nonprofits can’t adequately show their achievements and success. Without being able to show that success, funders are less likely to fund initiatives like… new technology.
According to the Marsh and McLennan Agency, “data is the new currency for nonprofits.” The group reports that 57% of nonprofits don’t use donor data in a way most beneficial for fundraising or marketing. Without accurate information to support their work, nonprofits can’t make informed decisions on what steps to take next.
Lack of updated technology and can also pose security risks for nonprofits. Each holds the data and private information of its clients and donors, which should be protected.
Nonprofits should pay extra attention to their password policies and who is given data access. Software should be supported and backed up and open sourcing should be avoided when possible.
Finding (and keeping) the right staff
Even the biggest nonprofits simply can’t compete with for-profit salaries. Changing work cultures have also made it difficult to attract employees that might have formerly looked to nonprofit work to meet their altruistic needs.
According to Nonprofit Quarterly, more for-profit companies are providing staff with opportunities to make a bigger paycheck and give back.
The nonprofit sector, in general, has not felt the need to invest in employee acquisition or retention because the field offered employees one benefit that for-profit companies could not: satisfaction from purpose-driven work. But, with the advent of social entrepreneurship and more companies recognizing that employees, especially millennials, want to engage in community service and value employers who offer these opportunities, nonprofits may be at some risk of losing their edge in this aspect.
Six in ten nonprofit leaders list recruitment as a challenge. Considerations when it comes to keeping competitive with for-profit companies include rate of pay, updated technology, internal communications, and internal relations.
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Retention can also be a struggle.
“Many business experts refer to this as ‘training employees for their next employer,’ as many nonprofits hire outstanding college graduates and young, ambitious employees — only to see them accept a higher-paying position in the corporate world a year or two later.”
To recruit and retain a better employee pool, think of perks and benefits that don’t have to create an additional line item in the budget.
Remember that professional development workshop mentioned above? Use it to invest in your employees and promote their expertise (and connection to the organization!). You can also find ways to promote self-care and limit burnout by offering occasional shorter summer hours or a day off during a non-busy season.