Nonprofit organizations provide very valuable assistance to society. With shrinking funds for programs and a more competitive environment, nonprofit organizations will need to rethink their corporate strategies for future success.
In 2005, there will be approximately 1.4 million nonprofit organizations registered to the IRS. The majority of nonprofits depend on volunteers at various levels. In fact, 74% of all public charities and 83% of all foundations are small; they have less than $500,000 in expenses and limited staff.
Negative market trends signal trouble for many nonprofit organizations. According to the Nonprofit Research Collaborative in 2011, 59% of nonprofits reported their donation income was flat or lower than 2010. Although 41% of nonprofits saw an increase in their donations during this timeframe, smaller charities with less than $3 million in total spending saw donations drop.
In fact, food pantries and homeless shelters across the nation reported more usage which increased the cost of operations. Furthermore, 8% of charities noted they were in danger of closing according to the Center on Philanthropy at Indiana University.
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Demanding contributors and the public in general are demanding more accountable and efficiency after several high profile scandals. Nonprofit organizations are often influenced by their stakeholders that include clients, board of directors, committees, government officials, community leaders, staff, and volunteers.
However, most nonprofit organizations haven’t completely embraced this rigor due to various reasons (i.e. limited resources and the lack of knowledge). Yet, nonprofit organizations have a greater need for increased effectiveness in their processes during this economic crisis.
Describe your professional experiences with nonprofit sustainability issues.
© 2012 by Daryl D. Green
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April 18, 2012 at 10:37 pm
Not as the currently are trending. They will need to reevaluate their vision and adjust their strategy in order to fit the needs. This will consist of possibly many major changes since the environment is so volatile right now. Nonprofits need to evaluate all threats and weaknesses in order to begin fixing what is not working currently.
April 14, 2012 at 6:31 pm
Non-profit organizations are often the key to save a persons life. It saddens me to see that these organizations struggle to survive. With most nonprofit organizations depending on donations to be able to organize their key event is not as easy a sit used to be. Especially with the economy the way it is, businesses that used to donate are now forced to step away from the organization. According to an article in the in The Global Arc by Jayne Gumpel one of the biggest challenges non profit organizations face today is, burnout. Many leaders cannot stay in their positions for more than a few years due to lack of support, stress, low pay and work/life balance issues. A great and steady leader is something that will be valuable to a nonprofit organization. These organizations leaders have to be good personalities because they will be the ones who talk to the donors. They also have to be very determined and able to deal with stress when things are tough. It is hard for organizations to find these leaders who are able to bring in the donations, and without the donations, they have little to no capital or recourses.
Gumpel, J. (N/A). Sustainability of Non Profit Organizations. Retrieved April 14, 2012, from theglobalarc.org: http://www.theglobalarc.org/index.php/programs/detail/sustainability_of_non_profit_organizations
April 14, 2012 at 8:28 pm
Ann-Sophie,
Excellent! Despite the technological advances, an effective organization still needs good human capital…aka people. Nonprofit organizations are no exception!
Professor Green
April 28, 2012 at 12:01 pm
Hey Ann-Sophie,
You make some great points regarding nonprofit organizations and the steps they need to take in order to be successful. Over the years I have volunteered for a number of nonprofit organizations and I can attest to some of the challenges discussed in this article. One of the biggest challenges for nonprofit organizations is that a significant amount of their staff may be comprised of volunteers. Jessica Miller-Merrell explains that, “Volunteers can be tricky. They aren’t paid staff, yet if they perform work for an organization, they have to be managed like any other employee or the jobs they do can go to the wayside.” In doing so, it is vital for nonprofit organizations to recruit volunteers carefully, provide adequate training and make sure they have clearly defined roles. While individuals have different motivations for volunteering, I believe most volunteers have the best of intentions and truly want to make a difference. In order to maximize their efficiency and to reduce overworking, organizations should routinely meet with their volunteers and have honest conversations about their roles and how they feel about their jobs.
Miller-Merrell, Jessica (June 24, 2011). Challenges of Managing Non-Profit Volunteers. Blogging4Jobs.com. Retrieved from http://www.blogging4jobs.com/business/challenges-of-managing-non-profit-volunteers/
April 15, 2012 at 8:18 pm
Ann Sophie,
Great points indeed! The free medical clinic I volunteer at in Detroit called HUDA clinic is having similar issues right now in regards to sustaining their organization, mainly due to the lack of organization and funding. It isn’t cheap to run a free medical clinic. They spend a ton of money on pharmaceutical products. They stock all kinds of medications to treat most common diseases such as asthma, heart disease, diabetes, high blood pressure etc. Those who have high motivation and the sense of giving back to the community need to step up to help these struggling non-profit organizations with donations. The leaders involved are taking time out of their own personal life to provide free health care service to the needy without any compensation so the surrounding community needs to assist. I like the way the HUDA clinic has it setup. The way it works over there is that they rotate the 14 physicians committed to the program every Saturday to prevent burnout and also have volunteers and nurses. The clinic is open on Saturday’s for four hours, open to everyone in the greater Detroit area.
April 28, 2012 at 11:13 am
Hey Ann-Sophie,
You make some great points regarding nonprofit organizations and the steps they need to take in order to be successful. Over the years I have volunteered for a number of nonprofit organizations and I can attest to some of the challenges discussed in this article. One of the biggest challenges for nonprofit organizations is that a significant amount of their staff may be comprised of volunteers. Jessica Miller-Merrell explains that, “Volunteers can be tricky. They aren’t paid staff, yet if they perform work for an organization, they have to be managed like any other employee or the jobs they do can go to the wayside.” In doing so, it is vital for nonprofit organizations to recruit volunteers carefully, provide adequate training and make sure they have clearly defined roles. While individuals have different motivations for volunteering, I believe most volunteers have the best of intentions and truly want to make a difference. In order to maximize their efficiency and to reduce overworking, organizations should routinely meet with their volunteers and have honest conversations about their roles and how they feel about their jobs.
Miller-Merrell, Jessica (June 24, 2011). Challenges of Managing Non-Profit Volunteers. Blogging4Jobs.com. Retrieved from http://www.blogging4jobs.com/business/challenges-of-managing-non-profit-volunteers/
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It is understandable how nonprofit organizations could be in such peril, given today’s economic conditions. Unfortunately, there are so many individuals that are dependent on the goodwill of these organizations. Therefore, the sustainability of these organizations is crucial. According to Kyle Lacy of Business 2 Community, there are various tips and methods available in order to boost funding. Many of Lacy’s recommendations seem to depend on various marketing components. For example, Lacy first advises to “Identify Your Target Audience.” He gives other tips such as social media tactics and the use of technology. Another suggestion he also gives that particularly resonated with me is the importance of education. I believe that he is right! It is not every day that one may think to give to a particular nonprofit organization. Therefore, it is important for these organizations to take the initiative to constantly educate as many people in the community as possible. The more education that is given, the more members of the community will understand the cause, which would make them more likely to contribute to the organization.
Reference:
Lacy, K. (2011). 15 tips to building a better nonprofit marketing strategy. Business 2 Community. Retrieved from http://www.business2community.com/strategy/15-tips-to-building-a-better-nonprofit-marketing-strategy-042947
Katie,
You make some great points!
Can nonprofits continue on this same path?
Professor Green