Adjusting to economic stress

Just as businesses have been making cuts and looking for more efficient methods of operations over the past few years, so too are nonprofit organizations. A recent survey from the Nonprofit Finance Fund revealed several strategies charitable organizations are deploying to weather through the economic downturn when donations may decline with lowered consumer sentiment. Nonprofit organizations are undergoing substantial changes to sustain donation levels while making other functions more cost- and time-efficient.

"Nonprofits are changing the way they do business because they have to: government funding is not returning to pre-recession levels, philanthropic dollars are limited, and demand for critical services has climbed dramatically," said Antony Bugg-Levine , CEO of Nonprofit Finance Fund (NFF). "At the same time, 56 percent of nonprofits plan to increase the number of people served. That goal requires change and innovation - for nonprofits, for those who fund them, and for the broader systems we need to preserve and expand economic opportunity and social progress."

New funding sources
According to the survey, 42 percent of respondents do not feel confident they have the right combination of financial resources to remain effective in the current economic climate over the next three years. About 25 percent of nonprofits have 30 days or less cash-on-hand, and 39 percent plan to adjust how they raise and spend money in the upcoming year. As a result, more nonprofits are turning to online donation pages, social giving and other cost-efficient strategies to increase both awareness and giving while remaining within budget.

By freeing up capital and resources through online donation initiatives, nonprofits are able to realign focus on adopting new business practices. In the past 12 months, the survey showed:

  • 49 percent added or expanded programs
  • 39 percent worked with another organization to enhance services

  • 39 percent upgraded technology to improve efficiency, such as online donation pages

Crowdsourcing is another growing trend in nonprofit funding, which taps into a wide pool of donors interested in making small contributions, typically online. Wyoming News reported crowdsourcing strategies are helping organizations statewide meet their fundraising goals when traditional efforts fall short and resources are spread thin. One group was able to raise $5,000 in a short period of time via online crowdsourcing strategies, which helped the nonprofit documentary team reach their desired goal and complete their project. While crowdsourcing may not be the main fundraising focus for charitable organizations, it offers a supplemental source of donations to fill in holes when online donation pages and in-person events fall short from previous years' successes.

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