Biggest Challenges Facing Nonprofits [+ Tactics to Overcome]

The world has changed in the last few years. How we do business, live our lives, and interact with one another are very different from before COVID-19. We’re living in an era of uncertainty, with concerns about rising inflation and the threat of recession. There’s no telling what the future holds, but what we know is that while the world is adapting, so are the needs of nonprofits and the fundraising landscape.

Keep reading if your nonprofit needs tips on preparing for what’s in store and maximizing your fundraising efforts in 2024 and beyond.

What are the Biggest Challenges Facing Nonprofits in 2024 and Beyond?

If we identify the biggest challenges nonprofits face, we can start preparing to deal with them. To help with this, we’ve come up with a list of the top challenges charities face, followed by some valuable tactics for overcoming these obstacles and thriving during this uncertain time.

Fundraising is impacted directly by growing inflation and uncertainty. This is how.

1.    Higher Demand for Nonprofit Services

With prices rising daily, more people will lean on charities for help. Nonprofits that offer services such as food banks, clothing distribution, health services, and shelters will be in more demand than ever.

2.    Rising Costs

An increased cost of living means nonprofits’ resources and day-to-day expenses have increased. These costs can quickly eat into the annual budget, making it difficult to cope with the additional demand for nonprofit support and services.

3.    Donors Have Less to Give

Nonprofits normally appeal for more donations to help with rising operational and fundraising costs. However, everyone is feeling the pinch on their wallets at the moment, which leads to fewer donations. Add this to the fact that donations don’t stretch as far as they once did, and this could result in donor attrition if not dealt with wisely.

4.    Nonprofit Job Vacancies

With a higher demand for nonprofit services, recruiting more volunteers is required to help everything run smoothly. This may be tricky in a time of rising inflation as people might be less motivated to donate their time without any financial reward.

But don’t throw the towel in just yet! Now that we’ve identified the main challenges nonprofits face let’s help your nonprofit navigate how to overcome these obstacles and thrive in 2024 and beyond.

9 Tactics to Overcome the Challenges Nonprofits Face

With the impact of inflation and the threat of a global recession, now’s the time for nonprofits to assess their existing financial situations and take any necessary measures immediately. By making smart choices today, nonprofits can weather any storm.

Consider these nine tactics to help your nonprofit succeed in the face of uncertainty.

1.    Design a Solid Action Plan

Organizations that have strong fundraising strategies can adapt better than those that don’t. All nonprofits need a solid annual action plan to provide a detailed layout of your nonprofit’s future fundraising projects, goals, and activities for the year and how to achieve them. Just make sure it’s flexible enough to adapt quickly when the landscape changes.

Take a more detailed look at how to Write a Successful Fundraising Plan in 6 Simple Steps [with Free Templates].

2.    Improve Leadership Skills

During uncertain times, people tend to look for a leader to steer them in the right direction. Teach your nonprofit team how to be resilient, adaptable, and creative with your nonprofit’s marketing projects, fundraising ideas, and budgeting. These will be invaluable lessons for your staff and, in return, will build a stronger team and organization.

3.    Support Staff and Build Resources

Be transparent with your nonprofit staff and volunteers at all times. It’s important that you are all on the same page to achieve the same goals.

Prioritize:

• Gathering resources and looking for alternatives to meet growing demands for your services.
• Employing as many free resources as possible to get your nonprofit noticed without breaking the bank. For example, use free social media platforms, such as Facebook, Instagram, TikTok, LinkedIn, and YouTube, as marketing tools.
• Training nonprofit members on how to effectively use your CRM to track donors, increase the database, and practice data hygiene.
• Showing more appreciation to your staff. Recognize their achievements with non-monetary rewards like offering flexible working hours or home office options to support their situation.

4.    Be Transparent, Empathetic, and Extra Grateful

Putting yourself in your supporters’ shoes for a moment is important. Your nonprofit may be facing some rocky times, but so are they. Transparency, empathy, and extra gratitude could be just the ingredients your nonprofit needs to maintain strong ties and a healthy stream of donations.

Transparency

Transparency is essential for informing staff, donors, and sponsors about the truth of this challenging situation early on.

• Explain many of the financial obstacles your nonprofit is facing. 
• Send open and honest appeals, emails, and personal letters with this new information.
• When you receive positive feedback from recurring donors, why not ask if they’d be comfortable increasing their recurring amount in light of the current economic challenges – it would be a great way to increase a predictable revenue stream for your nonprofit.

Empathy

Be empathetic to your donors’ possible financial struggles at this time. Let them know you understand that not everyone can continue giving the same amount as before but that you appreciate anything that can be contributed. This could also be a chance to mention alternative ways to support your nonprofit’s cause, like in-kind donations if they cannot send monetary contributions.

Also, consider launching new membership programs with more affordable rates and lower contribution levels to adapt to the donation frequency and budgeting needs of your donors.

Gratitude

There’s never been a better time to show extra appreciation to your nonprofit supporters than now! Thank you letters, emails, and gratitude events are great ways to show appreciation, increase loyalty, boost productivity, and give updates about your nonprofit’s achievements. Get creative with the way your nonprofit thanks your donors and make them feel special. Remember that your donors are the ones that help your nonprofit achieve its goals, so make sure they know how much they’re appreciated.

5.    Seek Multiple Streams of Income

The more ways you can generate money for your nonprofit, the better, especially in light of the current economic situation. Diversifying your nonprofit’s income streams is also a great way to maintain interest among donors, as there’s something for everyone which increases the chance of giving.

Here are a few examples of how to diversify your nonprofit’s revenue streams

• Government funding and grants
• E-commerce stores – sell custom branded merchandise for your nonprofit.
• Gaming for good – incorporate gamification techniques into your fundraising campaign to heighten levels of supporter engagement and attract more generous donations.
• Matching gift programs
• Fundraising campaign add-on events:
  • A charity gala with a silent auction
  • A school festival or carnival with a penny social
  • A walkathon with custom-printed merchandise sales.

Remember: Special events bring in donations, but make sure it’s something that doesn’t break the bank. Otherwise, it will be counterproductive for your nonprofit.

6.    Expand Local and Corporate Sponsorships

Corporate

Sustainability, impact, and purpose are values that many corporations and foundations take seriously nowadays. Look for businesses with corporate social responsibility (CSR) goals and programs that align with your organization’s mission. This is a win-win relationship as nonprofits benefit from valuable and often recurring contributions, while companies are notably aware of how their consumers celebrate these charitable attributes.

Get corporate partners to encourage workplace fundraising, such as P2P campaigns.  This will encourage team building and awareness of your nonprofit’s cause and help spread the word about your organization among employees and their networks.

Local

Philanthropy is on the rise, and hopefully, it’s a trend here to stay. People recognize the value of supporting good causes and making a positive impact in their community. To encourage local partnerships with your nonprofit, why not see who’s doing what in your community and collaborate with them to make an even bigger impact? 

Donors like to see organizations joining forces with local businesses and individuals, which could result in more giving options. Be sure to explain to your supporters that donations are invested in a socially responsible manner, to provide long-term social benefits.

7.    Keep up with Trends

Attract existing and new donors by showing how your nonprofit is up-to-date with all the new trends.

• Learn creative ways to motivate people to give by making your campaigns relatable and exciting.

• Raise the bar by investing in your online platform. There’s some stiff competition out there, so make sure your fundraising website and donation platforms stand out, engage and connect with donors.

8.    Keep Fundraising

Fundraising is still the bread and butter of many nonprofits. Although it can be hard to fundraise in the face of inflation, especially when you’re not sure how much money will go toward your cause, it’s necessary for your nonprofit’s future.

Here are some great reasons to keep fundraising:

• It’s more than just raising money for a good cause. Fundraisers can serve to boost the morale for so many. It’s a perfect opportunity for like-minded people to come together for a great cause at a time when many people are struggling.

• Fundraising is one of the most effective marketing strategies for your nonprofit. Whether you’re looking for donations, sponsorships, or just want to have fun with it, fundraising can be a perfect fit for any nonprofit organization.

• Fundraising events can help give back to more than just the cause you’re raising money for. Consider hosting community-based fundraisers to help those in need at this difficult time. Make a bigger and more positive impact in your local community by hosting a community clean-up, an auction of promises, or even a pop-up food drive. 

9.    Double Down on Year-End Appeals

Finally, the last six weeks of the year are vital to most organizations’ fundraising efforts. Kicked off by #GivingTuesday and running through December 31, the year-end giving season cannot be ignored by nonprofit fundraisers.

November and December are often characterized as the months of kindness and charity, which is great news for your year-end fundraisers. Make sure to take advantage of this to end the year on a high note.

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