Biggest Business Challenges for Nonprofits

by Danielle Bloom

4 min read

Running a nonprofit can be extremely rewarding, but saving the world on a shoestring budget is also extremely challenging. Nonprofits face a lot of unique hurdles, and awareness of these issues is key to avoiding them.

1. Finding Donors

The backbone of most nonprofits is the donor base, but unfortunately, finding donors isn’t necessarily easy. Marketing is key to attracting donors. You need innovative, eye catching campaigns filled with engaging, truly relatable stories.

2. Limited Marketing Ability

Although you need marketing to find volunteers, most nonprofits face huge marketing constraints due to tight budgets. To combat the lack of resources, make the most of each dollar with targeted marketing efforts. Ideally, your ads should hit the age, income, and other categories that correspond with your anticipated donor and volunteer base. When possible, focus on lean marketing initiatives. To draw on a hugely successful nonprofit marketing campaign, consider the Ice Bucket Challenge. This viral campaign helped ALS Canada raise a stunning $17 million from over a quarter million donors. In a typical year, the organization receives about $7 million in donations. While these results are extraordinary, you can replicate the success by focusing on social media marketing, rather than traditional venues. Also, remember to leverage the skills of your volunteers. If you have marketing gurus in your database, reach out and see what they advise, or put a few social media savvy volunteers in change of your online campaigns.

3. Retaining Donors

It’s always easier to keep an existing donor than find a new one, but many nonprofits struggle with retaining their donors. To illustrate a classic case, imagine a nonprofit that finds a donor from a door-to-door canvassing campaign. The group adds the donor to its database, but the individual never donates again. To avoid this eventuality, you need to keep donors engaged. Provide updates on the progress of your mission — when donors know where their money is going, it encourages them to keep giving. Also make giving as easy as possible and let donors sign up for automatic monthly donations.

4. Over Reliance on Volunteers

As important as volunteers are, it’s critical to ensure your organization isn’t over reliant on them. Unfortunately, volunteers are ultimately free agents. They aren’t employees, and they can quit or drop a project at any time. Combating that involves serious efforts to engage your volunteers. It also requires vetting your volunteers. For example, you may not want to put a brand new volunteer in charge of a big project. Instead, you may want to entrust those jobs to established volunteers who’ve proven themselves.

5. Sustainability Issues

In addition to an engaged donor base and a community excited about your mission, you also need to focus on development. As a general rule of thumb, you should expect to get four dollars in donations for every one dollar you spend on development. If you are the leader of the organization, you also need to make a succession plan. If you want the organization to survive, you need to know who’s going to carry on the work once you’re gone.

6. Unclear Missions

The mission statement is the heart and soul of your organization, but it can be easy to lose track of in the midst of day-to-day activities. Successful nonprofits have clear missions. They articulate these missions to their donors, volunteers, and board members, and they also revisit and refine their missions on a regular basis.

7. Lack of Board Diversity

Ideally, all of your board members should share a strong commitment to your organization, but unfortunately, too many nonprofit boards have lots of commitment and hardly any diversity. As a result, there is a lack of strength and experiences to draw from. To create a robust board, you need people with a variety of skills. For example, someone experienced in management alongside of someone who understands marketing is ideal. To continue, someone who can see the large picture complements someone who is a detailed thinker. The right diversity creates balance and helps foster new ideas.

8. Disorganized Meetings

To optimize the role of your board, you need well run meetings. If meetings devolve into debates with no resolution, board members may feel bored and impotent. Instead, keep on track with agenda and a strong facilitator. Guide your board to create the strategies that move your organization forward. In addition to helping your organization, that also makes the board feel useful and needed, which ultimately makes them more likely to continue contributing. Running a nonprofit is a lot like running a business. Although the profit element is gone, you still face similar core challenges. To be successful, you need to identify these challenges and be ready to meet them head on

References & Resources

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