The Nonprofit Finance Fund (NFF) advances missions and social progress through financing, consulting, partnerships and knowledge sharing that empowers leaders, organizations and ideas. The NFF helps fill a data void in the not-for-profit (NFP) sector by conducting a survey that allows NFP leaders to raise their voices and share their opinions and experiences. The 2018 survey was completed by almost 3,400 NFP leaders whose organizations vary in size and mission across all 50 states. This survey is conducted every three years and can be used to help gauge the state of the industry. It also can be used as a benchmarking tool for NFP organizations. Visit the NFF website for a summary of the significant findings included in the survey results.
NFP organizations are complex entities that face many obstacles. The landscape of the NFP industry continues to evolve as societal needs and governmental policies change. With these changes, NFP leaders identified the most critical community needs as:
- Affordable housing
- Youth programs and services
- Mental/behavioral health services
- Financial capability
As NFPs work to meet these community needs, 52 percent of survey participants indicated the funding environment was getting harder. In addition, 67 percent of NFP leaders felt the challenges facing their clients were tougher than in previous years. Overall, 86 percent of the survey participants said the demand for NFP services is rapidly increasing—so much, in fact, that 57 percent of survey participants don’t believe they have the ability to meet this demand. As a result, 63 percent of the organizations are planning to expand their services to increase capacity. In addition to expanding services, NFPs face a number of operational challenges. The top three identified in the survey are:
- Financial sustainability
- The ability to raise funding for the full cost of their operations
- Raising unrestricted revenues to meet the organization’s needs
NFP leaders are continually looking at their business models to find ways to overcome these hurdles and identify opportunities for success. Sixty-eight percent of survey participants said they collaborate with other NFP organizations, and plan to continue in the next fiscal year. Increasing diversity within the organization also was included as a priority in the coming year by 60 percent of survey participants. NFP leaders are constantly looking for ways to be creative and resourceful with their funding and operations to evolve with the ever-changing industry dynamic.
Employees are a vital resource for organizations, and NFPs continue to invest in their employees despite funding restrictions; however, this doesn’t come without its own challenges. NFPs are typically budget-conscious, and NFP leaders identified offering competitive pay as the top staffing challenge. Providing competitive pay and benefits is a continual challenge, as corporate entities typically provide higher compensation and NFPs operate using a more modest business model. Due to funding and budget constraints, NFP employees may wear many hats and complete a variety of tasks that aren’t always included in their job description. As a result, 59 percent of industry leaders included employing adequate staff as the second highest-rated challenge. Additional struggles were identified as cultivating the next leaders of their organizations and recruiting/retaining staff with leadership potential. Despite these hurdles, NFP organizations continue finding ways to provide their employees with increased compensation and opportunities to grow professionally and deliver the organization’s mission.
The survey results show that NFP organizations are resilient and dedicated to meeting the ever-changing needs of their communities. NFP leaders are tackling real-time concerns by expanding programs, increasing compensation and collaborating with organizations to create brighter futures for their communities.
Read the survey’s full results at the link above. You also can use the survey analyzer to explore and filter the data included in the results, or watch BKD’s Analyzing 2018 Not-for-Profit Industry Trends webinar.
Contact Stephanie or your trusted BKD advisor with questions or for more information.