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3 Challenges Facing Nonprofits

Challenges Nonprofits Face

Nonprofit organizations have unique challenges they have to face in today’s world. Everything from donor retention to keeping track of all the funds coming and going from your organization can be tricky. As a leader in your nonprofit, you are often the one to face these challenges and are responsible for successfully overcoming them.

Here are three common challenges nonprofit leaders face today.

1. Staying on top of the political landscape

Politicians and policies tend to change every two to four years. Regulations seem to come and go. Not only is the political climate continually changing, but donor priorities are changing right along with it. Legislative bills like the Tax Cuts and Jobs Act of 2017 are written and implemented faster than organizations have time to react.

Resources to help nonprofits are oftentimes not immediately available after a bill passes into law, even when the new law is difficult to navigate. And resources you’ve come to count on might not be relevant after the next election.

Media sources and voting pamphlets are only able to give you the basic information about what is happening, but not always how it will affect your organization. The National Council of Nonprofits works with both the federal government and any state nonprofit associations to ensure you are receiving the most accurate and up-to-date information about any changes affecting nonprofits. It is a network of people whose mission is the same as yours—to make the world just a little bit better.

2. Sustainability and restricted funding

The average donor today is rightfully concerned about where their money is being spent when they make a donation. They want to make sure their full dollar, not just a percentage, goes toward helping people. It can be a hard pitch to get money to help pay for a new administration office when donors want to see tangible results. With scrutiny on federal and state funds, grantmakers also want to make sure they aren’t just padding salaries. As a result, more restricted funds are being awarded. This prevents all but a small portion of these funds from going to administrative expenses. It is a frustrating battle to fight the myth that overhead expenses are a sign of inefficient organizations.

Restricted funds can be tricky to manage, and donors want to have confidence that their money is being used appropriately. Effective fundraising and fund tracking is a must for all nonprofits and there are tools available to help guide you through the challenge of maintaining restricted funds. Managing these types of funds properly also gives donors confidence in your organization so the proposal of a new administration building might not be met with as much resistance.

3. Communicating these challenges

Being able to articulate your organization’s standing to people with a variety of backgrounds and professions is critical. These days, board members are looking for sophisticated reports that can require more time and effort from you. Your other audience, your donors, want a clear, simple financial picture before donating. Simply offering a form 990 isn’t enough. Having a reporting system that offers transparency and customizable reports that track important KPIs is crucial. Reporting systems that have integrated artificial-intelligence are becoming increasingly popular as this level of business intelligence can assist your organization in predicting upcoming trends.

Business intelligence software is no longer just a luxury available to big businesses. More and more programs are accessible to various sized nonprofit organizations. Business intelligence programs give you everything you need in easy-to-read charts and graphs. You can view your revenue, expenses, and any other important KPIs.

At Cougar Mountain Software, we stay informed on the challenges that are facing nonprofit organizations across the country so that you can focus on your cause. With the right tools in place, you can spend more time on your mission and less time worrying about paperwork.

Contact us today to find out how Denali Fund can help your organization thrive in this challenging climate. Make sure to check out our blogs on fund tracking and our newest add-on Denali BI, powered by Sisense.