The 5 Greatest Challenges In Nonprofit Management (And Solutions)

1. Money.

In a recent survey of nonprofit administrators, the following concerns were at the top of the list: Growth/Generating Revenue was at 16.7%, Funding/Donors at 11.3%, and Fundraising at 7.5%.

Clearly, the nonprofit sector is concerned about how to generate revenue, gain more donors, and fundraise more effectively. All of us who have worked in nonprofits have felt the pressure of raising enough money to accomplish our programming goals. 

How Do You Fix Financial Concerns in Your Nonprofit Organization?

Financial concerns can cause stress and frustration among your staff. Are you familiar with that feeling of excitement about an idea that is immediately followed by uncertainty and doubt because you probably don’t have the money?

Do you know the pressure of running a fundraising campaign and knowing that everyone is counting on you to get the messaging right and reach the goal?

How can you address these concerns to reduce stress and improve morale (and retention of staff!) in your workplace?

Know your numbers.

You can't go somewhere new if you don't know where you are. What do we mean by that? We think it is important for nonprofit leaders in your organization to know what the current financial situation is. 

What you should know: 

• Your current operating budget
• The success rates and totals of your most recent fundraising campaigns
• How many consistent donors you have
• How many one-time donors you have had in the past year
• How to access specific financial data for your nonprofit
• Anything specific to your organization that informs financial decisions
  
  

Implement strategic budgeting.

Run your organization like a startup. You should operate like a lean machine. This may take some time and research, it’s smart to invest in tools and automation that can work overtime and cut down manual processes.

Stay connected with your donors.

In our recent post about fundraising strategies, we talked about the importance of communicating with donors about other things than just fundraising campaigns. Some options include sharing success stories, sending thank you notes, and talking about where recently donated funds have been spent. This will build relationships with your donors that go beyond donor fatigue. 

Create an all-hands-on-deck strategic plan for growth.

When you think about your organization, everyone should play a role. Facilities workers, social media gurus, fundraising leaders, administrative officers— you should all be on board for implementing your strategic plan. This can ensure that everyone is working together to do two things: 1) save money, and 2) create revenue. 

2. Membership recruitment and retention.

Recruiting and retaining members to your association can create challenges for any organization. Whether you are a small nonprofit working in a little town or a huge organization with thousands of members, you likely feel the need to ensure that your membership numbers improve from year to year. 

How Do You Manage Membership Challenges? 

There are a lot of different challenges when it comes to managing membership, including satisfying the concerns of existing members, reaching potential new members, and convincing potential members to commit to membership.

Focus on engagement.

Engagement is key. Nonprofits must constantly be engaging with members and potential members. However, focusing too much on recruitment and not enough on retention can create long-term problems. Richard Gott from MemberWise says, “This year we have reached a tipping point. For the first time, we are placing more emphasis on long term member engagement rather than short term member acquisition.” 

Follow Gott’s lead and ask yourself: how can we ensure that we are engaging with our existing member base in a way that excites them and makes them want to stay connected with us? 

Expand your membership base with a new audience.

At the same time as you are engaging with existing donors and members, consider how you can expand your member base with a new audience. Specifically: Millennials. 

According to NextThought, “Millennials are looking for associations in which they can invest both time and loyalty. For associations, attracting these younger members is surprisingly simple: Build web-accessible professional development content with a community of practice.”

Build out your member benefits.

Membership organizations generally agree that members expect their online experience to be interactive and engaging. There is an increasing challenge of meeting the digital expectations of Millennials.

This generation uses their smartphones every day to access information and collaborate on social channels using the latest and best-funded websites and mobile apps. The user experience they get from these channels is driving up their expectations for their digital engagement. 

If you build your member benefits, you will satisfy this massive pool of potential donors/members. 

Millennials are looking for associations in which they can invest both time and loyalty. For associations, attracting these younger members is surprisingly simple: Build web-accessible professional development content with a community of practice.

 3. Staffing and volunteers.

Managing staff is a challenge for any institution, including for-profit companies. Nonprofits have great workers, we know that. But there are still challenges to managing staff at a nonprofit, and volunteers make that even more complicated. 

How do you manage HR challenges in a nonprofit?

Whether you have a Human Resources department or not, you have to manage a lot of HR challenges when you employ workers. There are some unique strategies that are encouraged for nonprofit managers.

Learn the language of appreciation.

Nonprofit workers report feeling overworked and under-appreciated. One way nonprofit leaders can respond to that is by learning the language of appreciation. Even if you don’t have the funds to give big bonuses or raises to your employees, you can still make them feel appreciated and valued through words of affirmation, public or internal recognition, and more. 

Encourage rest.

Instead of expecting your staff to be available 24/7 for most of the year, encourage your team to take rests as needed. A rest can be an occasional long lunch with colleagues, a break from some of the more intense work events, or vacation time that they might be tempted to skip. 

Build culture.

What is the culture that you are building? Are your workers valued? Are they treated as assets? Do you create an environment where people care for each other and encourage each other?

For nonprofits that work in difficult environments, it is especially important to create an atmosphere of self-care. Be intentional in how you develop a workplace culture.

4. Technology.

Another perpetual challenge for nonprofits is technology issues. Issues with manual, paper-based processes and outdated software account for 7.5% of respondents’ concerns. 

How Do You Address Technology Concerns in Your Nonprofit?

Everyone in your organization is affected by technology concerns, even though the concerns may be different from department to department. 

Understand the consequences.

If you have bad software, you are going to have unreliable reporting. You are going to have a lot of manual work for your staff and volunteers that could be automated or simpler. The consequences of bad software aren’t just occasional delays and frustrations; they have significant effects on your workers’ time and on the organization’s bottom line. 

Find an expert.

Technology is one of those things that changes every day, so you have to be in it to stay up to date with it. You may not have an internal person who can manage this. If you have an expert to help in this, it will make a difference and save you money in the long run.

Balance innovation & productivity.

Innovation for innovation’s sake isn’t worth it for most nonprofits. Rather, innovation should be balanced with productivity. Evaluate what works for your company and what is effective for your specific programming needs. 

5. Decision making.

When students pursue a master of science in nonprofit management, they might not realize just how much decision making is required on a day-to-day basis. And these are big decisions— there’s a big difference between theory and practice, so hopefully, the program prepares students for real-world application. 

Often, we have a reactive approach, rather than proactive. We end up spending a lot of time putting out fires and making decisions based on what is feasible at that moment. Often, this means we make decisions that are not in line with our mission. 

How Do You Resolve Decision Making Mistakes?

Mistakes happen. The important thing is developing a way to evaluate those mistakes and create a plan for moving forward. Consider who is involved in your decision making evaluation process. What is the chain of command? 

Who is held responsible for making mistakes? Is there grace for the occasional mistake, but are there also appropriate consequences when something goes terribly wrong?

Clear up your mission statement.

A great way to ensure that decisions are made according to the mission is to ensure that your mission is straightforward and understood by everyone in the organization. Communicate it internally and externally, and then really live by that mission. 

Write out the effects of your decisions before you make them.

Long term and short term results should be examined in writing before you make big decisions. Consult with experts. Get input from a variety of team members. 

Avoid mission creep.

“Mission creep” is a change that pushes a nonprofit past its original goals and objectives. Mission creep can cause you to overextend the organization. It can also cause processes to become ineffective, and it can produce a change in brand perception. These changes can be both internal and external. 

Keep your focus on your actual mission, not everything that you and your team care about. 

How Are You Resolving Your Challenges?

Are you overwhelmed by the challenges you are facing as a nonprofit administrator or manager? Do you have a plan for resolving these challenges? Let us know what we can do to help! We are always ready to provide great advice to nonprofits, especially as it relates to how you use technology to solve problems and advance your association's goals.