Here are the 10 challenges facing non-profits in 2023:
- Funding cuts and decreased donations
- Competition for grants and philanthropic support
- Increased operational costs
- Measuring impact and demonstrating value
- Attracting and retaining talent
- Navigating government regulations and compliance
- Adapting to changing technology
- Maintaining transparency and accountability
- Building and maintaining community support
- Addressing social and political changes and challenges.
Let’s elaborate on each of the 10 points:
#1. Funding Cuts and Decreased Donations:
The ongoing financial uncertainty and the need to reduce government spending have resulted in cuts to funding for non-profits. Additionally, with the rise of new sources of giving such as crowdfunding and social media, traditional sources of funding, such as individual and corporate donations, have decreased.
This has put a strain on the resources of many charities, making it difficult for them to sustain their programmes and services. To overcome this challenge, non-profits must diversify their funding sources, engage with new donors, and build stronger relationships with existing supporters. Here is how they can go about it:
- Online Fundraising: Utilise their charity website to raise funds as well as online fundraising platforms and social media to reach a wider audience and engage with new donors. For instance, all our charity website templates have customisable online donation forms.
- Corporate Partnerships: Building partnerships with businesses and corporations helps to secure funding and in-kind donations. Charities should leverage the social or CSR initiatives that most public companies work on.
- Grants: Applying for grants from foundations, corporations and even government agencies to secure funding for specific programmes or initiatives. There are now venture capitalists that work with social enterprises. They are a good option to tap for immediate or future support.
- Events: Hosting fundraising events, such as galas, auctions, and community events, to engage with supporters and raise funds.
- Legacy Giving: Encouraging supporters to include the charity in their estate plans and to make gifts through bequests, trusts, or other planned giving vehicles.
- Direct Marketing: Direct marketing through ad campaigns or even flyers and brochures helps the charity reach out to new and even existing supporters and solicit donations.
- Loyalty Initiatives: Building strong relationships with existing supporters by regularly communicating the impact of their gifts, recognising their contributions, and engaging them in the work of the charity.
- Volunteer Programmes: Non-Profits should engage with volunteers and supporters to help raise funds and increase awareness about their good work.
Utilising a mix of these strategies and tailoring their approach to the needs and interests of their supporters will help charities to diversify their funding sources, engage with new donors and build stronger relationships with existing supporters.
#2. Competition for Grants and Philanthropic Support:
With the increasing number of non-profits and charitable organizations, competition for grants and philanthropic support is becoming increasingly intense. This makes it challenging for non-profits to secure the funding they need to sustain their operations and achieve their goals. To overcome this challenge, non-profits must differentiate themselves from other organisations, demonstrate the impact of their work, and build strong relationships with funders and donors.
Boiling it down into specific steps, charities can get more grants and philanthropic support by following these steps:
- Develop a Clear and Compelling Case for Support: Charities should have a clear and well-defined mission, goals, and impact. This will help them articulate their needs and demonstrate the impact they are having in their communities.
- Research the Best Funding Options: Research potential funding sources, including foundations, corporations, government agencies and individual donors. Identify which organisations align with your non-profit’s mission and goals, and assess their funding priorities and processes.
- Build Relationships: Building strong relationships with funders is critical. Network with individuals and organisations in the philanthropic community and attend events and conferences to connect with potential funders.
- Prepare a Strong Proposal: A well-written and well-researched proposal that clearly outlines the charity’s mission, needs and impact can increase the chances of securing funding.
- Leverage Technology: Utilise technology, such as fundraising software and even online donation forms like the ones our charity templates offer, to streamline the grant application process, track deadlines, and communicate with funders.
- Evaluate and Refine: Evaluate the success of each funding request and use the feedback to refine and improve future proposals.
- Foster Donor Loyalty: Engage with donors and keep them informed of the charity’s work, impact, and plans for the future. This will help build trust and increase the likelihood of future support. Calling the donor up when you need funds or sending them a newsletter every now and then does not work as effectively as say, mentioning their names on your posts, blogs, or other events.
These seven steps, if done well, will increase your charity’s chances of securing grants and philanthropic support.
#3. Increased Operational Costs:
The cost of running a non-profit organisation continues to rise, with inflation affecting everything from staff salaries to equipment costs. This can make it difficult for charities to balance the need to provide quality services and programmes while keeping expenses under control. To overcome this challenge, non-profits must prioritise cost-saving measures, such as reducing waste and inefficiencies, leveraging technology, and seeking out more affordable resources. For more information, read our points on financial management and financial control in the previous blog post on How to Run a Successful Charity.
In addition, here are a few practical steps to reduce operational costs for charities:
- Streamline Processes: Streamline processes to eliminate waste, increase efficiency, and reduce costs.
- Automate Tasks: Automate repetitive tasks, such as record-keeping and data entry, to reduce labour costs and increase accuracy.
- Implement Cost-Saving Technologies: Implement cost-saving technologies, such as cloud computing and virtual meetings, to reduce expenses associated with physical infrastructure and travel. We understand this problem. For instance, our website templates can be used to reduce operational costs by automating fund collections, HR management, accounting and so on.
- Evaluate and Negotiate Contracts: Evaluate existing contracts and negotiate new contracts with suppliers and vendors to reduce costs and improve value.
- Reduce Energy Consumption: Reduce energy consumption through energy-efficient technologies and practices, such as installing energy-efficient lighting and using power management software.
- Implement a Procurement Policy: Implement a procurement policy to ensure that your team makes informed purchasing decisions and gets the best value for money.
- Outsource Non-Core Functions: Outsource non-core functions, such as accounting and legal services, to reduce the costs associated with hiring and training staff.
- Sharing Resources: Collaborate with other organisations and share resources, such as office space and equipment, to reduce costs and increase efficiency.
#4. Measuring Impact and Demonstrating Value:
Non-profits are under increasing pressure to demonstrate the impact of their work and show the value they bring to communities. This requires gathering and analysing data, setting performance goals, and regularly reporting progress to stakeholders. To overcome this challenge, these organisations must invest in robust evaluation and performance measurement systems, engage with stakeholders to understand their needs and priorities, and communicate their impact in an understandable and accessible way.
#5. Attracting and Retaining Talent:
Attracting and retaining a talented and motivated workforce is a challenge for many non-profits, especially as they often compete with the for-profit sector for the same pool of talent. To overcome this challenge, non-profits must offer competitive compensation and benefits packages, create a positive and supportive work environment, and invest in training and professional development opportunities for staff. They must also prioritise employee burnout, diversity, equity and professional development.
#6. Navigating Government Regulations and Compliance:
Non-profits must navigate complex regulations and laws at the local, state, and national levels, including tax laws, employment laws, and reporting requirements. This can be challenging and time-consuming, taking resources away from the charity’s core mission and programmes. To overcome this challenge, these non-governmental organisations must stay informed about changing regulations and laws, seek out technical assistance and support, and build strong relationships with government agencies and regulators.
#7. Adapting to Changing Technology:
Technology continues to advance rapidly, creating new opportunities for non-profits to reach and engage with their communities, increase efficiency, and improve their impact. However, it also presents new challenges, such as the need to stay up-to-date with new software and platforms, and to integrate technology into their operations and programs. To overcome this challenge, non-profits must stay informed about new technologies, invest in training and professional development, and seek out partnerships and collaborations with technology experts.
#8. Maintaining Transparency and Accountability:
Non-profits are held to high standards of transparency and accountability, and must maintain the public trust in order to continue to secure the resources they need to operate. To overcome this challenge, non-profits must implement robust financial management and reporting systems, engage in regular internal and external audits, and communicate openly and transparently with stakeholders about their operations and impact.
#9. Building and Maintaining Community Support:
Non-profits rely on the support and engagement of their local communities to achieve their goals and make a lasting impact. However, building and maintaining community support can be challenging, especially as people’s interests and priorities change over time. To overcome this challenge, non-profits must engage with their communities on a regular basis, understand their needs and concerns, and communicate the impact of their work in an accessible and meaningful way.
Non-profits can also build community support by collaborating with other organisations, leveraging social media and other technology platforms, and by providing opportunities for volunteers and supporters to get involved and make a difference. Additionally, non-profits can demonstrate their impact and commitment to their communities by engaging in open and transparent communication, being responsive to feedback, and by actively seeking out and addressing community needs. Building strong relationships with community members and stakeholders is key to maintaining community support and securing the resources necessary to achieve non-profit goals.
#10. Addressing Social and Political Changes and Challenges
This is an important enough point to write about in some detail.
- Staying Informed and Engaged: Non-profits must stay informed about the political and social climate in which they operate and actively engage with decision-makers, stakeholders and communities to understand the challenges they face.
- Building Coalitions and Partnerships: Charities can address social and political changes and challenges by building coalitions and partnerships with other organisations, businesses and community groups. Collaborating with others can help non-profits leverage resources, influence policy and achieve a greater impact.
- Adapting Programmes and Services: Non-profits must be flexible and adaptable in response to social and political changes and challenges. This may involve modifying programmes and services to meet changing needs, developing new initiatives, or partnering with other organisations to find new solutions.
- Building Resilience: Non-profits can build resilience by diversifying their funding sources, developing contingency plans, and investing in systems and infrastructure that can withstand change and uncertainty.
- Advocating for Change: Charities can use their platform and voice to advocate for change and to raise awareness about important social and political issues. This can include lobbying for policy changes, participating in public campaigns, and using media and technology to reach a wider audience. This should only be attempted once the charity has spent some time working on the above four points.
To summarise, charities can effectively address social and political changes and challenges and continue to make a positive impact in their communities by staying informed, building coalitions, advocating for change, adapting programmes and services, and building resilience.