Overcome the Top 5 Challenges Nonprofits Face in 2019
Nonprofits are driven by their mission. From the CEO to the employees, nonprofits inspire brand ambassadors, forge relationships, and create tangible value through mission-driven goals. And, each nonprofits unique vision will produce its own host goals. But, all nonprofits share one thing in common --they want to grow.
Growth is the magic word that creates successful nonprofits. And, every year, these organizations face a unique mix of challenges that can quickly become growth barriers. Whether that’s funding issues, risk management failures, or donor acquisition troubles, nonprofits deal with their own distinct challenges.
These are the hurdles that nonprofits must bounce over if they want to grow in 2019.
1. Compliance and Risk
According to The Nonprofit Financial Priorities Benchmark 2018 Survey, compliance was the most significant issue for nonprofits in 2018. And, that’s not at all surprising. Between the New Tax Act --which changed employee tax-free incentives, dropped charitable donations, and changed profit/loss structures --and increasingly stringent state laws, nonprofits are facing a hurricane of compliance and regulatory barriers.
Compliance is particularly dangerous territory for birthing nonprofits. Navigating compliance complexities during those first few years is expensive and time-consuming. And, with the already outrageously high failure rates for startups, risk management can crumble starry-eyed nonprofits before they have a chance to execute their mission.
How to navigate compliance and risk:
- Plan for compliance costs early
- Assemble a team of compliance experts
- Keep your team informed of potential changes in their wages or incentives due to the New Tax Act
2. Shrinking Donors and Rising Competition
With more than 1.5 million nonprofits, increasing donor rates (which are up over 20% this year) are being drowned out by a seemingly never-ending supply of competition. Finding ways to remain competitive requires lean strategies and unique solutions. Growing revenue has always been a critical driver of nonprofit operations. Everyone wants to grow revenue. But, this year, growing revenue may require lean operations.
And, your areas for additional revenue capture could be your back-office. The rise of AI and automation has introduced new cost dynamics into the nonprofit space. The nonprofits that choose to act early are going to be at an advantage in the coming years. As donors shrink and competition increases, tech may be the easiest way out of the pickle jar.
How to fight shrinking donors and rising competition:
- Create lean operation strategies
- Introduce tech early and often
- Leverage Account Base Management to track and capture hyper-critical donor assets before your competitors
3. Donor Engagement
We’re in the age of drive-by-donors. People see a problem, get hyped, donate, and then disappear. And, this pendulum-style donation ecosystem makes donor engagement extremely fickle. But, not all donors are created equal. And, measuring donor engagement is a sure fire way to accurately track and capture new donation streams.
Here’s the problem... engaging donors is tough work. The news cycle is shrinking. And, with so much of our lives consumed by screen-time, engaging donors in a tangible way isn’t easy.
How to fight low donor engagement:
- Leverage your marketing funnel to inspire mid-to-bottom funnel donors
- Engage donors early and often
- Educate donors as often as possible to boost engagement rates
- Use your mission to forge brand ambassadors
4. Leveraging Social Media (New Media)
How do you connect with your community? The luscious fundraising galas are slowly being replaced by social media accounts and websites. The new age of non-stop engagement and participation will disrupt the nonprofit space. If you aren’t on social media, you’re already behind. 3.2 billion people use social media. And, they’re spending an average of ~2.3 hours PER DAY on their accounts.
Luckily, social media isn’t just another tech annoyance. There’s real value trapped in those social accounts. 55% of people who engage with your nonprofit on social media will take action (59% of those people are going to donate!), and 43% of people who attend nonprofit events heard about them through social media.
There’s plenty of power behind that Facebook profile.
How to win with social media:
- Respond to users immediately (most users expect a response within 1 hour)
- Remember to use features like Stories (they grow 15x faster than feed posts)
- Watch your competitors like a hawk (over 90% of businesses are on social media)
5. Marketing and Sales Woes
Nonprofits are in a constant cycle of funding. You need money to make an impact. And, you need donors to get money. Somewhere in this cycle, nonprofits seem to forget about the importance of marketing. The average brand spends around 10% of their revenue on marketing. That’s a lot of dough.
So, can you prove that your marketing strategies are giving you the results you want? Sure, you know marketing works. But does your marketing strategy work. And, you can be honest here... you probably don’t know. Around 40% of marketers say that proving the ROI of their marketing strategy is their biggest challenge.
Better yet, even if your marketing is working, are you converting? In an ecosystem where the average salesperson spends over an hour per day doing manual data entry for their CRM, and 40% of salespeople think getting a response from customers is getting more difficult each year, finding ways to utilize the value of your marketing spend is tough.
How to win with marketing returns:
- Track your ROI! 72% of brands that simply track their ROI are satisfied with their results. And, they usually score 1.6x bigger budgets
- Make sure that you aren’t blaming marketing for sales failures
- Don’t be afraid to bump up your budget if results are strong
No one ever said running a nonprofit would be easy. But, if you stick to your vision like glue and leverage the latest technology, you can spend the end of each year smiling. Don’t let the yearly hurdles get you down; bounce over them like an Olympic track runner. Let this year’s challenges be next year’s success story.
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