5 Challenges for the Modern Nonprofit

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Nonprofit Challenges

This article originally appeared at VailCentre.org

Nonprofits are becoming more and more essential to the core of a thriving community. According to the Council of Nonprofits, there is an increasing need for nonprofit services of all kinds within big cities, small towns and local neighborhoods.

However, the Council of Nonprofits also reports that many organizations are now having a harder time raising money. Nonprofits are facing big changes in how they operate, including fundraising in the digital age, attracting an engaged workforce and figuring out how to appeal to future donors.

Here are five of the biggest issues facing organizations today — including specific areas they should be looking at for continued and future success in the nonprofit sector:

1. Hiring and Retaining Workers on a Nonprofit Budget

One of the main problems nonprofits experience is not having enough funds to attract highly-skilled workers and keep them on the payroll for many years to come. 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.

Nonprofits need to not only find employees dedicated to an organization’s cause or mission, but also seek out future leaders who will push them forward and help increase their reach. One benefit nonprofit organizations have over corporations is that the people who choose to work for them are often very committed to enacting real change: they really do want to make a difference in the world.

There are several ways nonprofits can “reward” their employees that place less emphasis on pay and salary. Recognition programs, formal mentorship programs and fostering a culture of continuous education and development all have enormous value — and make employees feel valued in return.

2. Understanding the Trend of Social Entrepreneurship — and How it Benefits Nonprofits

Social entrepreneurship is a term often used to describe startups, businesses and companies who are developing products and services that attempt to solve social, cultural or environmental issues at both a local and global level. Toms Shoes is a good example of this. For every pair of shoes sold, the company donates a new pair of shoes to an impoverished child. Toms Shoes is still a for-profit business, but part of its mission is raising awareness and fulfilling a need for children’s shoes in underdeveloped countries.

Many of today’s social entrepreneurs — like Blake Mycoskie, founder of Toms Shoes — often express a desire to not just “give back” through charitable donations or philanthropy programs, but integrate solutions and provide resources for people in need as it relates to their business.

As some businesses become more socially conscious, nonprofits have the opportunity to collaborate with the for-profit world to create more resources and services that may be mutually beneficial.

3. Implementing Strategy and Measuring Performance

Like all businesses, nonprofits need a well-thought-out strategy for how they’re going to accomplish their goals. Unlike for-profit companies, which often focus heavily on profit margins and long-term financial gains, nonprofit organizations have to focus on many different factors to assess progress, growth and sustainability.

Strategy is different from a business plan. Strategy involves knowing your mission and fulfilling it in an efficient and impactful way. Strategy also includes looking at how your nonprofit fits into the wants and needs of the community you’re serving. Strategy is not only about operational steps your nonprofit can take to be more effective, but also about identifying your organization’s strengths and how these differ from other or similar nonprofits.

When funding is limited, nonprofits may face a lot of pressure to produce measurable results. By identifying the specific impact and direct outcomes of nonprofit programs, organizations are better able to quantify the ways in which they help residents and community members. Evaluating a nonprofit’s performance is not always easy, but it’s something all organizations need to address to continue with their mission and maintain funding.

4. Fundraising in the Digital Age

For nonprofits, fundraising efforts have changed significantly due in part to new technology, social media and digital marketing campaigns. In many ways this has been a huge boon for nonprofits. Someone can post about a charity or an important cause on their Facebook or Instagram page, share it with friends and then watch the outreach spread like wildfire. Celebrities and media influencers who support certain nonprofits can help organizations gain attention quickly — especially if the marketing is done in a smart, social media-savvy way.

However, fundraising in the digital age also poses many challenges. It can be hard to gain attention for your cause or organization among all the posts, news, updates, likes and shares that dominate all the different social media platforms we have today. Additionally, a social media campaign is often not enough to encourage donors to give or participate in an organization on a regular basis.

Generational shifts are also changing how donors respond to fundraising campaigns. Recent analysis of Millennials and fundraising found that 61 percent of donors age 20 to 35 give smaller donations to an average of three to five different organizations, rather than giving a large donation to a single charity. This analysis also showed the response rate from email marketing campaigns has decreased in the past few years, while the use of video often showed a positive impact on a nonprofit or charity initiative.

5. Highlighting Social Innovations and Creating New Avenues for Social Change

Many nonprofit organizations are uncovering new ways to deal with concerns and issues that affect communities and citizens. Social innovations include relatively small adjustments like a community college offering online courses for long-distance students, to large-scale efforts like overhauling the public school system by creating more charter schools.

Several high-impact nonprofits have focused on social innovation as a tool for real-time social change. Nearly three decades ago, no one could have predicted the effect Teach For America would have on education across the country. Since its start in 1989, more than 45,000 educators have participated in the Teach For America program. Over 80 percent of the organization’s alumni have full-time positions that impact education or low-income communities. Along with its measurable success rates, Teach For America has changed how people think about our nation’s education systems and “created a committed vanguard of education reformers.”

It’s important for organizations to take notice of how other nonprofits are developing new methods and models for addressing the needs of the groups they work with. Even social innovations that are happening on a global or national scale — like Teach For America — can inspire local nonprofits to try new ways of solving old problems.

Leadership Programs Help Nonprofits Succeed Long-Term

For nonprofits, it’s not enough to simply think about social innovations or brainstorm new social media fundraising campaigns. Leaders and managers of nonprofits need to enact strategies that create real change — both in local communities and within their own organization.

Vail Centre offers continued education certificate programs that target both the for-profit and nonprofit sector. The programs aim to teach working professionals new skills for leadership, management and business development. Taught by established practitioners and scholars in the nonprofit arena, the Duke University Nonprofit Management Program will focus on the skills and tools one needs to become a leader in the nonprofit world. Offered June 25-30, the course will be held on the Vail Centre campus and attendees can register here, or by contacting Todd Wallis at todd@vailcentre.org.