4 Common Challenges Nonprofits Face
Nonprofit work can be highly rewarding, but it also comes with a unique set of challenges. Nonprofit leaders must continually balance many priorities with limited resources. Therefore, creativity and the ability to adapt quickly are crucial characteristics of a successful nonprofit leader. Here are a few of the most common challenges faced in the nonprofit sector:
Changing Government Regulations
Changing government regulations serve as a continuous hurdle for many nonprofit organizations. Tax reform in particular has a huge impact. The new tax reform regulations may limit a nonprofit organization’s income as it could impact the tax credit amount provided for charitable donations. This change can alter the giving ability of donors ultimately impacting the bottom line.
Retaining Quality People
Many nonprofit organizations boast a small, overworked staff. While the work is rewarding, nonprofits don’t necessarily have an endless supply of cash making it difficult to retain and fiscally reward top performers.
Additionally, nonprofits rely on volunteers and research suggests volunteerism is on the decline. Time is precious and it is challenging to find incentives that push people to donate their time and energy. Nonprofits must be exceptional marketers and must invest a significant amount of resources in developing relationships. The need for continual recruitment and evaluation definitely tops the list when it comes to challenges facing nonprofit leaders.
Keeping Pace with Technology
In a tech-driven world, viable organizations have to meet consumers where they are in terms of technology. Instant gratification and online communications are now the norm. Additionally, new technology helps businesses of all levels glean information that can help with performance and business decisions. For nonprofits with limited resources and funding, keeping pace with the times can be a challenge. Technology is expensive and continual upgrades create a bit of a burden for many nonprofits.
Most nonprofits are managed by a volunteer Board of Directors. This group generally has term limits meaning the Board turns every couple of years. This constant turnover can make continuity and progress seem impossible. Each President may come with a new direction and set of ideas for the organization. Nonprofit leaders must delicately walk this line and must balance the needs of the organization with the personal interests of the Board members.
These themes are just a few of the many challenges facing nonprofit organizations today. Even so, nonprofit work continues to be an important mission for many leaders and their efforts do not go unnoticed.