Current Nonprofit Challenges

Posted on Wednesday, May 24, 2023
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With more than 2,300 tax-exempt organizations in Allen County including over 1,900 of those being 501(c)(3) organizations, nonprofits play a key role in our communities.  The current economy has created several challenges for nonprofits from staffing shortages to an increased demand in services.  Many of these challenges are not specific to only those in Allen County but all nonprofits. 

Staffing

Nonprofit organizations are struggling to find staff.  It used to be that they competed against other nonprofits but with the shortages in all industries, nonprofits are competing with for-profit businesses that can pay more and provide additional benefits.  When they can find staff, often times the individuals don’t have the required skills needed for the position.  Employees within the nonprofit sector many times wear multiple hats which makes it even more difficult to find qualified staff.  

In addition to staffing shortages, organizations must address remote work and work/life balance requests.  It’s much easier for some organizations to address these issues than others that provide programming in-person and on-site only. 

So how do we address the staffing shortage?  

Consider utilizing volunteers.  Does your organization have a  formal volunteer program in place.  The key is to identify the specific tasks worth delegating and provide clear job descriptions.  

Are you supporting your staff?  Are there ways that you can help your team members grow?  Can you allow a staff member to attend an online college class for an hour during the work day?  Can you partner with another organization to provide discounted child-care or gym memberships for your staff?  Sometimes a little something extra goes a long way.

Consider utilizing part-time or contracted staff.  Can you partner with another nonprofit and share staff, for example for accounting services?  

Think creatively!

Volunteers

Organizations are finding it harder to attract volunteers.  Changes in generations and the pandemic have had a significant impact on volunteering.  The University of Maryland noted in their 2019 report that volunteering had typically been strongest among college graduates, married people, and those with children.  Younger generations are delaying these life events and with the increased job changes and moves of younger generations, they are volunteering at lower rates.  The pandemic has also forced many individuals to re-evaluate what is important to them and how they spend their time.  

So how do we address the shortage of volunteers?

As with staff shortages, make sure your organization has a formal volunteer program in place.  Use social media to market your organization and how people can get involved.  Be sure to communicate the commitment requirement.  Is it a one-time service, weekly, monthly?  Having different options will appeal to a greater audience.  

Consider attending volunteer fairs to advertise your organization and get to know potential volunteers.  Reach out to the Volunteer Center in Fort Wayne that connects volunteers with local community organizations that need help. 

Board Members

Nonprofits rely heavily on their board members.  Without board members, the organization would not exist as the board is ultimately responsible for the organization.  So when an organization has difficulty finding board members, it should be a huge concern.  In addition to difficulty attracting board members, many organizations struggle with current members that do not play an active role.   

So how do we address finding new board members?

Make sure your organization has a clear path to board service.  Organizations should consistently be recruiting potential board members and have them serve as committee members or volunteers to get to know them and make sure it is  good fit for both parties.  Then when there is an opening on the board, it is easy to transition the individual to board service.  Provide your board members with clear responsibilities and expectations.  Included in the expectations should be that if they feel that they can no longer serve in the capacity of a board member, that they will resign.  Hopefully this does not happen, but things change and you want to make sure you have active board members. 

Evaluate how you are recruiting potential board members.  In Fort Wayne, Greater Fort Wayne’s Leadership Fort Wayne class encourages class members to join a nonprofit board.  Utilize LinkedIn.  Most people will include their board service on their profile which allows you to see what types of organizations they are passionate about and their experience.  Reach out to them either directly or through a connection and introduce yourself and your organization to see if they are interested. 

Funding

During the pandemic, there was an increased amount of funding for nonprofits from both the government and private sources.  As the pandemic comes to an end, many of these extra dollars that organizations relied on have gone away forcing organizations to find new revenues.  

Another challenge is the competition amongst organizations for funding dollars.  As the number of nonprofit organizations continues to grow, so does the competition.  Some funders have also re-evaulated their funding programs and the types of programs that they support.  This can be a challenge for organizations that have relied on a grant from a certain funder for many years. 

So how do we address funding challenges?

Evaluate your organization’s revenue streams.  Where is your funding coming from?  Are you reliant on a certain funder or source of funds?  What new source could you tap in to?  For example, if you have relied on contributions to support your programs in the past, is it time to start charging a fee to program participants?  Are there government grants that you can apply for that you haven’t utilized in the past?  Is it time to revamp your annual fundraiser or maybe start having an annual fundraiser? 

Government Funding

Within Allen County, especially Fort Wayne, many organizations have been or will be awarded government funding that maybe haven’t received government funds in the past.  The City of Fort Wayne recently awarded a significant number of nonprofit organizations ARPA Funding.  These are State and Local Fiscal Recovery Funds (SLFRF) from the American Rescue Plan Act (ARPA).  Since this funding started at the federal government, any organization that receives this funding may need to have Single Audit performed (See our explanation for Single Audit requirements) and file an annual E-1 with the State of Indiana.  Government funding requires additional reporting and requirements so make sure your organization is aware of these and has the capacity to take these on. 

The City of Fort Wayne also recently received New Market Tax Credits, from the federal government that will be deployed out, some likely to nonprofits.  The State of Indiana also recently awarded Build, Learn Grow Stabilization grants to many nonprofit organizations to support childhood education programs.  If your organization received or will receive either of these types of funds, you may be required to have a Single Audit performed. 

Local Resources 

Here are some local resources that can help your organization in addressing these challenges:

Contibuted by: Carrie Minnich, MAcct, CPA | Partner | DWD CPAs & Advisors

Posted in Mission Minded Nonprofits

Disclaimer: The information contained in Dulin, Ward & DeWald’s blog is provided for general educational purposes only and should not be construed as financial or legal advice on any subject matter. Before taking any action based on this information, we strongly encourage you to consult competent legal, accounting or other professional advice about your specific situation. Questions on blog posts may be submitted to your DWD representative.

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