Information gleaned from regional and national studies on the challenges faced by nonprofits indicates that several issues are shared as concerns of nonprofit leaders. Board development and fundraising are top issues for nonprofits with a secondary emphasis on difficulties related to improving operations and managing resources more effectively.
Some fundamental concerns were commonly identified in the studies, which surveyed nonprofit CEOs and board members. Five main themes emerged clearly from the problem inventories in the various reports. These suggest areas of most urgent need as indicated by nonprofit leaders:
1. Board Development – The most frequent concern was building an active and strategically oriented board of directors. The specific problems identified were:
Recruit high-impact board members
Cultivate a dynamic and effective culture among board members.
Foster strategic direction for boards
2. Marketing / Fundraising: Developing effective marketing programs to recruit and retain donors was also a high priority. In particular, respondents were concerned about:
Apply technical / marketing communications to donor outreach activities
Expanding your current donor base
Increase donations from current donors, as well as improve donor loyalty and retention.
3. Information management: It was also very important to use effective information management to measure and evaluate operations and programs.
Establish a clear set of quality benchmarks for evaluating services.
Using IT to reduce costs and create value
Evaluation of programs / services against key performance measures
Establish a better model to measure and report the results.
Measure the real benefit of investments in development and marketing
Design a coherent approach to measure the performance and impact of the organization
4. Human Resources: Attracting, developing and retaining productive staff and volunteers was a fundamental concern:
Attract and retain qualified personnel
Attract trained and motivated volunteers
Develop a leadership transition and succession plan
Improving workforce performance
Provide ongoing training and skill development.
5. Collaboration: the search for constructive alliances, partnerships and mergers was also an important topic.
Develop collaborative partnerships with public sector agencies, including the government.
Forge collaborative partnerships with the private sector
Pursuing mergers with overlapping agencies / services
Extrapolating from these issues, a sixth issue is implied as a complementary concern:
6. Business Competence: The need to adopt the essential business processes and skills to effectively address the needs identified in these five main themes.
Various changes in the operating environment of the nonprofit sector are affecting leaders’ perceptions of the issues they face.
Funding Challenges: Many nonprofits simultaneously face a rapidly changing funding environment and an increasing need for services from the communities they serve. Low or highly focused government funding is putting great pressure on the sector, which has also seen a proliferation of new nonprofits over the past decade, increasing competition for a smaller pool of funds. Countless nonprofits are feeling the impact of federal reductions in their primary funding streams as donations from foundations and grants decline and many state and municipal governments are experiencing deficits that are reflected in reductions in program spending. social.
Accountability Pressures: As a result of some high-profile cases, nonprofits face strong accountability pressures to provide measurable evidence that the services they provide have an impact on the communities and populations they serve. Funders and the public want to know in detail whether the funded organization is effective at doing what it sets out to do and whether it is also efficient at what it does. While gaining and maintaining public trust is absolutely essential, calls for accountability can lead nonprofits to spend more time seeking financial support and accountability for the performance of funded tasks to continue receiving funding. from the source. This can make nonprofits more commercial, but it can also attract attention by responding in innovative or distinctive ways to community and / or customer needs.
Collaboration Fascination: Government and foundation funders increasingly require the use of inter-organizational relationships such as collaboration, partnerships, and alliances as an element of funded projects. However, while there is a growing body of knowledge about the factors that support the effective negotiation and integration of strategic partnerships, much less is known about the actual results that nonprofits experience and how these compare to those of nonprofits. expected results. Many nonprofits expend large amounts of organizational energy to obtain questionable returns while seeking interorganizational relationships. Nonprofits often encounter significant barriers to collaboration, such as autonomy and “turfism” issues, conflicting organizational cultures, and building trust between organizations.
Responding to these difficult circumstances requires accommodations that involve more than just developing additional financial support.
Leadership Challenges: The health of the nonprofit sector depends on the quality of its executive leadership. Agency leadership, including board members, must be able to raise critical questions related to strategy, mission, and accountability, as well as the roles their organizations play within their communities. For many nonprofits, responding to changes in the environment means an increased need to:
· Determine the most effective way to serve a customer population that may be growing or changing;
· Develop strategies and processes to access and manage new funding streams;
· Decide where and how to make budget cuts;
· Develop technology to capture information for reporting and billing;
· Manage cash flow challenges;
· Consider new partnerships, explore potential collaborations, and consider mergers or acquisitions.
Given the challenging changes in the typical work environment of a nonprofit organization, effective board leadership becomes particularly crucial. The issues facing the nonprofit sector underscore the need for responsive, skilled, and effective board leadership to maintain and improve the quality of organizational performance. It is appropriate for nonprofit boards of directors to take a leadership role in assisting agency management on critical issues such as mission definition and strategic planning, legal compliance and conflicts of interest, oversight of the agency financial management, resource development, establishing inter-organizational collaborations, cultivating community relationships, and training opportunities for capacity building.
Management Challenges: Nonprofit managers are challenged to perform multiple functions and roles while guiding their organizations through today’s complex environment. They must be highly trained not only in the technical aspects of their organizations’ mission, but also in management areas such as finance, human resources, information technology, program evaluation, resource development, and many other management responsibilities. Furthermore, the human resources of an organization represent the collective capabilities and experiences of its people. Unfortunately, nonprofits often face challenges when it comes to actively managing staff talent. Attracting and retaining qualified personnel, as well as increased responsibility and competence, creates the need to develop the specialized business processes and skills required in for-profit organizations. Consequently, like their counterparts in the corporate world, nonprofit managers must continually seek and use the latest organizational leadership and management methods and techniques.
IMPLICATIONS FOR SUCCESS
Reaffirming the six needs identified as positive attributes indicates that resilient nonprofits will have:
1. A strong governance structure and visionary board members with the right skills and access to resources.
2. Sufficient and flexible financing.
3. A defined set of best practices in service and management functions and an effective way to measure performance against these benchmarks.
4. A skilled workforce operating in a culture that facilitates opportunities for innovation and growth.
5. Effective community relationships including collaborative partnerships with other providers, sponsors, and other organizations and systems.
6. Management capacity to support services, including accounting, human resources, technology and marketing / development functions.
A SEVEN STEPS RECIPE
Viewed from this perspective, there are seven actions nonprofits can take to achieve these characteristics and address the challenges they face:
1. Conduct an organizational assessment and create a strategic plan to address any capacity shortfalls.
2. Involve board members to ensure quality governance structures, practices, and oversight.
3. Adopt and adopt solid marketing and communication strategies.
4. Develop business skill sets and integrate basic business tools and practices.
5. Identify and implement appropriate metrics and make better use of technology to allow evaluation of the success and impact of service and program delivery, as well as internal operations.
6. Institute progressive human resource practices that focus on skills and team building.
7. Explore and adopt new collaborative business models with complementary organizations.