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Tackling the Nonprofit Conundrum

The nonprofit sector employs more than 10% of America’s private workforce1, contributes around $985 billion to the economy, and produces myriad benefits that reach into every community and most homes.It’s a powerful, socially-focused engine focused on doing-good. Maybe nonprofits haven’t conquered all the problems or brought equal life quality to everyone, but they’re filled with millions of hard-working people who are out there trying.
Given the oversized burden nonprofits carry, the financial data is scary. Ninety-seven percent have annual budgets of less than $5 million, 92 percent less than $1 million, and 88 percent less than $500,000. Twenty percent have budgets of $100 thousand or less and many are run by volunteers. Around 50 percent have less than one month of cash reserves to draw on if the bottom falls out.3
The strain of inadequate, insecure funding is exhausting and often sends nonprofits tilting at every windmill that might throw out a grant dollar. And with low pay, long hours, and demanding work, nonprofits can easily turn into socially motivated sweatshops. There’s no easy way out of this. But just as a civil society is obligated to try to face down its dragons, nonprofits are obligated to try to face up to their conundrum. An America without nonprofits would be dystopian. They’re that important. 

Every organization has its own pressure points and problems. Having worked in nonprofits and trained thousands of staff members, I understand. But there are some commonalities throughout the sector and for those just starting to unravel this situation, I’d like to offer a few considerations. 

  • Claim the power that comes from your impact. This means embracing evaluation and using data as a tool to leverage increased, sustained financial support. This may mean prioritizing smart data over other compelling needs.
  • Claim the power that comes from genuine connections with those you serve. As the community’s front-line muscle on issues ranging from homelessness and childcare to arts and culture, your influence and impact are real. Use it. Show up at the important tables with a loud, well-reasoned voice.
  • Establish mutually respectful partnerships with funders who share your concerns. Your power rests in the knowledge, passion, and focus you bring to your mission. In the words of the late Norton Kiritz, founder of The Grantsmanship Center, “You’re applicants, not supplicants. Don’t beg.” Beggars see a chance to bring in some cash, think up a project, and chase the money. Applicants see issues that need tackling, make a plan, and build partnerships with funders. 
  • Take care of your own. Make a livable wage a priority. Support professional development. Provide adequate time off for staff to recharge and come back swinging. Maybe you’ll have to cut back on the service you provide but the long-term payoff will be a greater benefit to the community. 

You’re social activists and fighters, the moral engine of our society. Be lean but strong, loud but well-reasoned, tough-skinned but caring, fair and smart. And in the words of Winston Churchill, “Never, never, never give up.” 

Source Information:

1 National Council on Nonprofits, Nonprofit Impact Matters, 2019 

2 Urban Institute, The Nonprofit Sector Brief 2018, Brice McKeever

3 For data above see page 17  

This blog is an original work of the attributed author and is shared with permission via Foundant Technologies' website for informative purposes only as part of our educational content in the philanthropic sector. The views, thoughts, and opinions expressed in this text belong solely to the author and do not necessarily reflect Foundant's stance on this topic. If you have questions or comments, please reach out to our team.

About the Author

Barbara Floersch has over 40 years' experience managing nonprofits, writing grant proposals, and administering grants. She has raised millions of dollars in grant funding, served as a reviewer for federal grant competitions, trained thousands of nonprofit staff members throughout the US and internationally, and has testified before Congress on reauthorization of the National Endowment for the Arts. Floersch was a trainer for the Grantsmanship Center from 2000 to 2021 and served as the Center's Chief of Training and Curriculum for 12 years until her retirement in January of 2021. She has published hundreds of articles, has been a regular contributor to the NonProfit Times, and is the author of Grantsmanship: Program Planning & Proposal Writing, the updated, expanded edition of Norton Kiritz's seminal work in the field.

Profile Photo of Barbara Floersch