5 Biggest Challenges for Non-Profits This Year

The New Year always seems to be a great time for reorganizing, reanalyzing and reprioritizing. It also seems like the best time for reflection to determine what worked, what needs tweaking and what completely flopped last year. With the ebb and flow of the trends in the philanthropic world, it’s also of great importance to determine what trends are impacting fundraising and to thoughtfully predict what challenges may lay ahead.

In an article written in the Chronicle of Philanthropy, Suzanne Perry, Caroline Preston, and Nicole Wallace have written an article predicting what challenges non-profits will face in 2012. When you know what battles are in front of you, you can be better equipped.

1)     Economic inequality raises tricky issues for donors – Many have complained that charitable tax deductions primarily benefit high-income donors. With an increasing gap between the rich and poor, the high end donors are being encouraged to give towards causes that help the impoverished rather than erecting buildings at their alma maters. “This year, the question of how to broaden opportunities for all Americans is likely to occupy much of the philanthropic agenda,” suggests Perry, Preston and Wallace.

2)     Shrinking government aid – With decreasing government funding, many charities are going to have to look elsewhere to keep their doors open. Perry, Preston and Wallace share this surprising statistic: “A new study found that households in the hardest-hit states would have to increase their giving by 60 percent in the 2012 fiscal year just to help nonprofits make up for projected cuts in state spending on social services, Medicaid, and education—an unprecedented (and unlikely) jump.”

3)     The generation gap – With an ailing economy, there are fewer jobs for graduates and Baby Boomers are less likely to retire due to dwindling savings, stocks, and mortgages. Not only are these donors able to give less, but Perry, Preston and Wallace suggest that these two groups are having friction in the workplace.

4)     Measuring results – The cost of administrative overhead versus the amount of dollars a charity brings in has long been the standard for success and donations wisely spent. Without a tool to truly evaluate a word as vague as “success,” non-profits will still have to show proof of their effectiveness as best they can.

5)     Social purpose versus profits – One of the biggest trends right now in the philanthropic world is applying a business model to charity organizations. “Several states, including California, created new corporate structures that allow companies to incorporate social purpose into their businesses and put social goals ahead of profits… Will hybrids give nonprofit groups a bold, new way to pursue their missions—or will the new entities siphon off financial support that had previously gone to traditional charities?” questions Perry, Preston and Wallace.

While there are always mountains and valleys for non-profits, the good thing is that more organizations are joining together to share their methods for success. It’s important to use the resources available to you to jump over these hurdles and not to get distracted from your mission statement. Social media is one way to bridge the generation gap, enlarge your donor base and keep in contact with your volunteers.
Let Fundly be one resource to aid in your fundraising success for the New Year.