The Challenges of Small Not-for-Profit Organizations

Small Not-for-Profit Organizations are the “backbone” of our communities. They provide essential services and programs that improve the lives of people in need, such as food, shelter, health care, education, and more. They also advocate for social change and justice, raise awareness and knowledge about important issues, and inspire people to get involved and make a difference in their communities. They create jobs, support the local economy, and strengthen the social fabric of our communities. 

Larger nonprofit organizations and local chapters of national organizations are not totally exempt, but they usually have resources and the ability to reach people the smaller ones do not. They are in a better position to recruit leadership and dollars to address their missions. Smaller nonprofits generally address more localized population needs that the larger organization do not. 

These organizations are being challenged like never before to the degree that they may no longer have the resources to continue. This will impact the very fabric of our communities, placing greater emphasis on providing programs and services through government structures and removing them further from the people served. Let’s look at a few of the most difficult challenges and some possible solutions. There are no magic answers, but an outside perspective may help identify what can be done and how new and creative approaches can be applied to meet the needs. 

Volunteer Leadership Engaged and active volunteer leadership is essential for any local organization to be truly successful. A core of dedicated individuals to the cause is essential. The dynamics of these volunteers have changed significantly over the past several years. There was a time when local businesses encouraged, and even supported employee involvement. Individuals used their involvement to generate contacts, build their resumes, and help establish themselves as leaders in the community. The expertise and contacts they provided were invaluable to their organizations. They also provided manpower to get things done beyond the abilities of staff. Business staffing levels, workplace/life balance, work-from-home opportunities, other means of businesses supporting their community, and related situations have severely limited involvement.    

Other “rewards of volunteering have also diminished. Volunteers may experience physical, mental, or emotional exhaustion due to excessive workload, stress, or pressure. This can result in volunteers feeling drained, demotivated, or depressed. Community divisions, criticism, and competition for other organizations may limit how “fun” volunteering may be. 

Leadership is the key to finding and retaining great volunteers. Nonprofit leaders must establish regular and reliable communication methods, such as newsletters, emails, phone calls, or meetings, and use them to share updates, goals, expectations, and appreciation. Volunteers must see real value in the time they spend and feel that such practices will continue throughout their terms and beyond. Strategic plans must be established that reflect current needs, and organizations must take actions that are recognized and appreciated. 

Recruiting and retaining the right leaders, and volunteers, is not easy and must be carefully planned and established in the organization. It requires a commitment from current volunteers to improve and set higher standards of operation, not just accept the status quo. It may also require organizational structures, working documents, and training not available within the existing organization. 

Funding Providing financial and other community resources is another major challenge. They struggle to secure enough funding and resources to sustain their operations and achieve their goals. They may face competition from other nonprofits, reduced donations from individuals or corporations, or restricted grants from foundations or government agencies. Small nonprofits must deal with increasing costs of rent, utilities, supplies, insurance, and other operational expenses. These expenses can eat up a large portion of their budgets and limit their ability to invest in their programs, staff, or infrastructure. They are often ill equipped to seek out new finances or other resources or are reliant upon existing sources that are dwindling or no longer viable. 

Volunteers are often reluctant to be engaged in fundraising for many different reasons. They hate to ask others because they do not want to be constantly asked themselves. There are limitations to funds that can be used to support nonprofits, and inflation and other business realities come into play. 

Solutions to funding are difficult to find and become more complex as the needs of the organization and community grow. People are divided in their loyalties, local challenges have become greater and more complex, and there is little consistency in our approaches. New laws and policies, greater restrictions on the use of funds, and broader regulatory controls are also at play. 

The demands placed on staff and higher expectations by boards limit how much can be accomplished. Many small nonprofits have difficulty building and maintaining relationships with their donors, who are essential for their survival and growth. They may lack the time, skills, or tools to communicate effectively, acknowledge contributions, show impact, or solicit feedback. 

Technology innovations are one of the most underutilized tools used by nonprofit organizations. There are many new applications and software programs that can help speed up processes, automate operations, and effectively help raise additional dollars. It is also important to be aware of the most current fundraising techniques and approaches. This is an area where consultants fees can more than pay for themselves in assisting both staff and board meet their goals . 

Staffing Most small nonprofits operate with lean staffing levels that must juggle multiple roles and responsibilities. This can result in staff burnout, stress, and decreased quality of service. Limited staff capacity can also limit the ability of nonprofits to pursue new opportunities, expand their programs, or respond to changing needs. Finding and keeping talented staff is also a challenge, especially in specialized fields or remote areas. Nonprofits may face barriers such as lack of awareness, limited resources, geographic isolation, or cultural differences. 

All too often, interference from well-meaning or ill-informed board members can be a major detriment to allowing talented and dedicated staff to do their jobs. Volunteer board members all too often participate in making decisions for the organizations that they would never make in their own businesses. Not-for-profit organizations are very different from for-profit organizations. 

Staff need support, encouragement, training, help and many other services they don’t often get from their organizations. Outside consultants, hired on a limited basis, can provide knowledge and efficiency, an outside perspective, and connection to funding or other resources. Training is one of the greatest needs of both volunteers and a small staff and can be best provided by those with broader experience then available internally.   

Characteristics of Success  

The most successful small not-for-profit organizations today share some common characteristics that help them achieve their missions and goals. Some of these characteristics are: 

  • They have a clear and compelling mission that guides their actions and decisions. They communicate their mission effectively to their staff, volunteers, donors, and beneficiaries, and inspire them to support their cause.
  • They are agile and adaptable to changing circumstances and challenges. They use flexible and collaborative methods to plan, execute, and evaluate their strategies and activities. They learn from their successes and failures and adjust their approaches accordingly.
  • They develop diverse and sustainable funding sources that support their operations and programs. They cultivate strong relationships with their donors and sponsors and demonstrate accountability and transparency in their financial management.
  • They invest in their human capital and organizational capacity. They recruit, train, and retain qualified and passionate staff and volunteers, and provide them with adequate compensation, benefits, and recognition. They foster a culture of teamwork, trust, and respect, and empower their staff and volunteers to take initiative and leadership.
  • They engage and serve their communities effectively. They understand the needs and preferences of their target populations, and design and deliver programs and services that meet those needs and preferences. They also involve their communities in their decision-making and feedback processes, and ensure that their programs and services are accessible, inclusive, and respectful.

 It is not easy to obtain and sustain these characteristics. They require a commitment that most organizations are not willing to make. Larger and more established organizations have the staffing, funding, and community support to accomplish these things on their own. Smaller organizations need to seek out and ask for help from trusted and experienced advisors. It is a small commitment to help the people and community they serve. 

There are many sources of help for small nonprofit organizations but not all consultants have the knowledge and expertise to provide the right assistance. 

Too often they are sourced from marketing firms or friends of board members who offer canned approaches.  The key qualifications of small nonprofit consultants may vary depending on the specific needs and goals of the organization, but some common ones are: 

  • Previous experience in a related field of need, demonstrating the ability to evaluate, plan, and execute real solutions.
  • A deep understanding of the nonprofit sector, its challenges, opportunities, and best practices.
  • A high level of professionalism, ethics, and integrity as well as the ability to establish trust and rapport with volunteers in the organization.
  • A willingness to listen, learn, and collaborate with volunteers and clients of the organization.
  • Clear and effective communication both in writing and presentations.
  • A passion for the organization’s mission and a demonstrated understanding of their commitment.

 Organizations must be clear about their needs and expectations for a consultant. Clear lines of communication and approval should be established. Different ways of engaging a consultant include requests for proposals, limited employment contracts, or retainers. 

Using consultants to expand capabilities, acquire resources or expertise, meet specific needs, or provide an outside perspective can be a cost-effective and efficient means of moving small nonprofits forward within the challenges they are facing. They might even mean the difference between failure and success in meeting the mission of the organization.

 Bob Price, Penn Price Management Group