The Unique Challenges Facing Nonprofits in 2022

Four Areas Nonprofits Are Experiencing Change.

by Rebecca Wiggins

Organizations across various sectors navigate similar challenges and trends, including changes in the economy, consumer spending, and technology. However, the ripple effect and impact of these trends are often experienced differently within the nonprofit sector.

COVID-19

For example, the pandemic has created massive changes for nonprofit organizations across the globe. Many are struggling with figuring out how and when to return to the office and how to enhance employee engagement across a virtual environment. In addition, nonprofits often rely on in-person revenue-generating fundraising or conference events and have had to pivot to virtual or hybrid platforms or cancel the event altogether. While these events can attract new supporters to the organization, they are often very costly and require increased training on the technology. Likewise, most nonprofits rely on volunteers to enhance staff capacity and increase engagement and awareness for the mission. The pandemic has largely halted volunteerism, leaving a void for the nonprofit and minimizing progress. Data also indicates that while charitable giving increased for COVID-19 relief, charitable giving to other organizations decreased overall.

Workforce

Additionally, many nonprofits are having trouble attracting and retaining employees. In a recent study by the National Council of Nonprofits, survey respondents cited vaccination policies, salary competition, and the inability to find affordable child care were among the top reasons for leaving jobs. Survey participants repeatedly cited stress and burnout, showing that the pandemic worsened the strains associated with under-resourced and often emotionally taxing nonprofit work.

Cybersecurity

Cybersecurity is another universal issue that often leaves nonprofits in precarious situations without proper risk management and oversight. Nonprofits should evaluate their IT solutions and assemble a committee to develop security policies and procedures to minimize risk. For organizations that process donations, registrations, and keep personally identifiable information on file like addresses, employee records, and social security numbers, cybersecurity insurance may be necessary to avoid liability concerns, reputational damage, and loss of funds which could be catastrophic for nonprofit budgets. Additionally, organizations that offer services to or receive donations from citizens in the European Union must adhere to the General Data Protection Regulation (GDPR) designed to protect personal data to avoid fines.

DEI

The last several years have brought a new level of consciousness around the moral and business rationale for creating more inclusive and diverse teams across all sectors. While diversity, equity, and inclusion have become part of the standard business vernacular, the data show it has powerful depth beyond words, including increased innovation and engagement when teams represent a variety of backgrounds, experiences, and perspectives. Diversity across race, ethnicity, gender, sexual orientation, religion, socioeconomic class, ability or disability, learning styles, and perspectives ensures accountability and sustainability for the organization – but more importantly, meaningful impact within communities.

Unfortunately, many nonprofits are still struggling with a lack of racial diversity (according to a 2021 report, 78% of nonprofit boards are still predominantly white), creating a disconnect from the people they serve. As a result, nonprofits are being held to higher transparency about policies and procedures, staff culture, and board and staff recruitment and composition. Funders and legislators are even requiring proven commitment to DEI through diverse staff and board representation to receive grant funds. However, the foundational work of deepening awareness and education must start internally at the individual, staff, and board-level to avoid perpetuating harmful practices without first creating the safety for diversity within a culture of belonging and inclusion, and ultimately the mission impact that the organization truly desires.

How are these trends showing up in your nonprofit organization? By not taking the time to address them at the root cause, how might you be increasing risk and liability, or diminishing morale or impact? What more would be possible for your organization with an intentional focus on these areas?

Five to Flow

While most nonprofit organizations are well versed in navigating the changing waters of the sector, there are ways to mitigate the constant barrage of challenges and qualified people who can help. At Five to Flow, our passion is to partner with you to design meaningful solutions that lead to organizational flow. Please contact us for more information about how we can work with your nonprofit to improve business health and alignment for the sustainable growth of your mission and impact.