November 29, 2018

Survey Reveals Key Challenges at Non-Profits

Serving the community by providing education, training and other vital services is at the center of a nonprofit’s mission. Taking the time to develop the right human resources, whether volunteers or employees, is a necessary step that transforms intention into action and action into results. This means that nonprofit executives need to continually find new ways to energize, engage and cultivate people and programs to deliver the highest return possible. While each organization faces its own unique challenges (often dictated by service focus and size) there are industry-wide issues and trends impacting all organizations. The  2018 Nonprofit Finance Fund State of the Nonprofit Sector Survey, conducted by the Nonprofit Finance Fund, provides important insights into the key financial and operational challenges faced by organizations this past year as well as into the future. To help clients, prospects and others understand the survey and what it means for their organization, Wilson Lewis has provided a summary of key points below.

About the Survey

The online survey included responses from 3,369 nonprofit leaders from nonprofits across the country ranging in annual revenue from $50,000 to $20M. Respondents included C-level executives and those in leadership positions. Participants were asked a variety of qualitative and quantitative questions designed to uncover key financial and operational trends while inquiring about new topics such as leadership diversity and equality.

Key Survey Findings

• Funding Challenges – Not surprisingly, funding was identified as a central challenge by most participants in their attempt to retain and attract quality talent and achieve operational goals. From a talent perspective, 64% of respondents are experiencing issues offering competitive pay, 58% employing enough staff to manage the workload and 34% identifying and cultivating leadership. From an operational perspective, 62% of respondents are having trouble achieving long-term financial sustainability, 54% raising funds that cover full costs and 44% raising restricted revenue.
• Demand for Services – It appears the demand for services is increasing at a rate that many organizations cannot meet. According to the survey, 86% of participants anticipate an increase in demand for programs and services but only 43% expect to be able to meet the demand. Unfortunately, this is a similar trend from 2017, where 79% of nonprofit executives expected an increase in demand while only 45% expected to be able to meet the demand. This increased demand will continue to challenge nonprofits to find new ways to do more with limited resources.
• Meeting Demand – In order to meet the increasing demand, nonprofit executives are leveraging creative strategies to expand and enhance program effectiveness. According to the survey, 68% of respondents are collaborating with other organizations, 48% plan to expand programs, 54% plan to increase staff compensation and 52% plan to increase staffing levels. It appears that many are finding ways to increase demand through partnerships and increased staff levels.
• Financial Fitness – Meeting the need for increased services and programs can create financial stress. To understand how organizations are maintaining their financial position during periods of increased demand, the survey inquired about participants’ financial situations. According to the survey, 26% of respondents are operating at break even, 24% with a deficit and 50% with a surplus. While a large percentage operate from a surplus it’s surprising to see the number of organizations operating in a deficit.
• Cash on Hand – Ensuring an organization has enough cash on hand to meet expenses is imperative to weather storms and unexpected changes. According to the survey, 24% of respondents have six months or more cash on hand, 6% have five months cash on hand, 7% have four months cash on hand, 18% have three months cash on hand, 11% have two months cash on hand, 9% have one-month cash on hand and 8% have less than one-month cash on hand.

Contact Us

The funding challenge is one that many nonprofits continue to work on and try to solve especially considering the expected demand for services. Attracting donors and other sources of funding requires organizations to operate as efficiently as possible while executing their mission. If you have questions about the survey findings or need assistance with a nonprofit audit or tax issue, Wilson Lewis can help. For additional information please call us at 770-476-1004 or click here to contact us. We look forward to speaking with you soon.