![]() As a society we’ve weathered the storm of the pandemic and its subsequent prolonged fallout and now are firmly in what is being considered the “post-COVID” era. So, what does this mean for nonprofit organizations operating in today’s day and age? At each juncture our consultants have given their advice on how nonprofits should respond during these unprecedented times. We gave early advice on how to act quickly, mid-point advice on how to rethink strategic planning, and now it feels right to give a final summary of what the nonprofit world looks like to close out the discussion and equip organizations to understand how to navigate the road ahead. In a recent all-hands meeting our team discussed what the current state of nonprofits is and what the future looks like moving forward based on their current roles and most recent engagements. Here are the insights they shared from their vantage point on the frontlines of some of today’s most dynamic organizations:
Where Are We Now? What is the current state of the nonprofit world post-COVID? Which areas have seen the most change and what are some of today’s biggest obstacles to nonprofit organizations? Our team identified four key changes: Income Uncertainty The biggest struggle that nonprofits are facing right now is income insecurity. The government funds that many organizations received during COVID are now gone, shaking organizations out of the false sense of security that they had created. What they are left with is the reality that fundraising is more difficult now than it was before. Philanthropy is down because individual donations have fallen off and organizations are not able to secure grant dollars that were previously available. Compounding matters, as wages have increased, nonprofit revenue has not kept up. The combination of these factors has resulted in organizations proposing deficit budgets for the year. Inadequate Cash Reserves On top of new fundraising challenges, there are the ongoing nonprofit budgeting issues that many organizations already face. Historically, nonprofits have failed to keep enough cash reserves on hand to provide for unexpected needs and bridge fundraising shortfalls. Even organizations utilizing what are considered best practices for the industry (i.e. setting aside three months of revenue) are often saving less than they should be based on the current economic climate, necessitating a rethinking of the nonprofit budgeting process entirely. Additional savings are strongly advised, and more creative budgeting strategies are needed to allow nonprofits to fulfill their missions amid this more difficult operating landscape. However, obtaining these additional funds and rallying leadership around this kind of reinvented budgeting approach both pose significant challenges for organizations. Leadership that is Resistant to Change Exacerbating income uncertainty is the problem of leadership at many nonprofit organizations who were unwilling or too afraid to change to shifts in their financial and mission delivery realities. This may look like:
Staff Turnover The tumult of the last few years has led to increased rates of burnout and employee turnover (especially at nonprofits where there is not strong, well-organized leadership to reassure them of the organization’s future). In some cases, employees are not only experiencing “everyday” burnout, but full-blown compassion fatigue as well, causing them to need to take a break from nonprofit work altogether while they focus on their own personal health. Simultaneously, as organizations have dealt with funding deficits, there have also been significant layoffs in the nonprofit sector. With staff leaving both voluntarily and involuntarily, morale across nonprofits is largely down, driving people away. Systemic Issues Organizations have largely struggled with finding their bearings post-COVID. As today’s cultural landscape has necessitated a radically different way of operating, more organizations seem to be facing systemic issues than ever before. As nonprofits rally to address their most fundamental and widespread issues, they are finding that they need to draw on a new boldness to bravely overcome their obstacles and turn the organization around. Our New Reality What is our permanent new reality post-COVID? Many of the changes that the pandemic ushered in are now here to stay, making them worth a mention in the discussion around what the future will hold for nonprofits. Remote Work Across every industry remote work has become a common requirement among workers. The nonprofit world is no different! These days nonprofit employees almost unanimously believe that they can do their jobs remotely. And yet, leadership at the organizations that employ them still understand the value of in-person culture building. As a result, nonprofit remote work is still a work in progress. Organizations are still softly pushing for employees to come back into the office, but when hiring organizations realize that they can’t compete on compensation they are more likely to compromise on remote work to appease candidates. As a result, nonprofit work is becoming more flexible all the time and the days of going into the office regularly (even as a part of a hybrid work arrangement) are likely coming to an end. Risk Tolerance With cash deficits weighing heavily on nonprofit leadership teams, Boards are more risk averse now. As a result, they are placing more emphasis on saving to create strategic cash reserves, making this a top priority when raising funds. Furthermore, they are less willing to dip into their reserves to fund projects or pursue new opportunities. As a result, EDs that want to utilize the organization’s reserves for new initiatives are likely going to be met with stiff resistance unless they can demonstrate a significant return on investment. When your organization needs help navigating these kinds of changes, please reach out to us! Our team of nonprofit consultants can advise your board or help you work through a leadership transition. Every day we help organizations to better fulfill their missions even in the face of sweeping organizational, political, and cultural change. Find out more about the Valtas difference that we bring to every engagement! Comments are closed.
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