Key insights
- The new year is a good time to try new ideas such as expanding DEI efforts and finding creative ways to attract and retain top talent.
- Collaborating with other nonprofits can increase outreach and reduce overhead.
- Educate the next generation of donors on community impact, operating reserves, and long-term goals, conveying those matters in a way that is meaningful to them.
- Building new technology into your operations can increase efficiency, reduce costs, and strengthen IT infrastructure.
Resolve where to focus your nonprofit’s efforts this year.
Pushing the limits and meeting challenges head on can grow capacity for services and outreach
When the year is new and filled with promise, the desire to outperform the prior year can be a powerful motivator. Making changes to your organization’s operations may cause disruption, but that’s no reason not to try new ideas. Consider some priorities and resolutions that could help your nonprofit achieve an exciting and impactful year.
Diversity, equity, and inclusion (DEI)
Nonprofits often lead by example — shaping their communities by responding efficiently to political and social challenges — so it’s no surprise when other entities turn to community organizations to learn how to better incorporate DEI into their environment.
DEI goes beyond simply denouncing racism, intolerance, and exclusion. Work collaboratively with governing bodies, donors, and the communities you serve to better understand the overall impact of external DEI programs and outreach. Regularly assess internal DEI efforts to encourage and foster an inclusive work environment.
Additionally, consider integrating DEI into finance policies and practices — from refining vendor selection and vetting to creating greater transparency on financials and making finance language more equitable and accessible.
Attracting and retaining talent
In today’s labor market, the competition is fierce. Companies and organizations are vying to attract top talent. Additionally, some fear “the Great Resignation,” which appears to be a combination of Baby Boomers retiring early and the younger workforce leaving jobs at record rates.
Finding creative ways to attract and retain top talent, given limited resources, can be built into the budget process. First, discuss ideas with those in governance. Then survey and interview employees, review current market studies and research, and use feedback to improve compensation, wellness, and benefits offerings. A few areas to review are:
- Compensation — including bonuses and incentive programs
- Retirement plans and organizational contributions
- Insurance packages — including pet insurance
- Disability benefits — including parental leave and family/elder care
- Employee assistance programs — including help with stress, anxiety, burnout, and other mental health concerns
- Office culture and events — including employee appreciation and feedback programs
- Flexible and remote work arrangements
- Employee membership and program discounts
- Compensation transparency — post pay ranges for all new positions when hiring
Collaboration
Nonprofit collaboration has been a hot topic for over a decade, but new ways of working prompted by the pandemic has brought it to the forefront. With the ability to do more work remotely — both back office and some client service — geographic boundaries are less prominent, opening the door for greater collaboration and efficiency.
Across the country, nonprofits focus on specific or narrow concerns of a larger issue. While it is inspiring to see many people and organizations passionate for a similar cause, it can create a strain on resources and donors. In light of labor shortages and supply chain disruptions, consider increasing collaboration with other nonprofits that address similar issues. The ultimate goal is for nonprofits to increase outreach, reduce overhead, and work together to address the larger, common issue at hand.
Before forming a collaboration, consider short-term and long-term goals for each organization. You may choose to just focus on services and programs, or perhaps arrange something more permanent, like a merger or acquisition. Upfront communication and expectations are essential.
Aging donor base
Over the next 5 – 10 years, Baby Boomers will likely be shifting wealth to their successor generation, which may have a direct impact on revenue streams. Having engaging (and sometimes challenging) conversations with your donor base and their entire families can build relationships with the next generation while also raising opportunities for major gift and estate planning.
Educate the next generation on community impact, outreach, and long-term goals, conveying those matters in a way that is meaningful and impactful to them. Find out what issues the next generation of donors are passionate about, then demonstrate how your organization is addressing them. There is a balance between financial results and storytelling — artistically educate the next generation on why their continued support matters.
Embrace technology to help improve operations
Given current labor shortages, you may want to rethink your organizational structure and operations to help increase efficiency. Management and those charged with governance should work together to address potential changes, while not sacrificing important checks and balances that can identify fraudulent activities.
Leverage automation and technology where feasible and practical. This can increase operational accuracy and timing while allowing employees to spend their time on mission-focused functions — rather than on mundane, repetitive back-office support functions.
See further discussion on these topics in our recent articles Getting Creative in Midst of the Labor Shortage and Nonprofit Fraud Awareness and Prevention Strategies.
Virtual engagement
Throughout the pandemic, nonprofits transitioned fundraising events to online platforms. These options helped nonprofits remain connected with donors, constituents, and members and were often successful, though many nonprofits reported significantly lower net proceeds from virtual versus in-person events.
As pandemic restrictions and concerns continue to evolve, consider the right time for your organization to return to in-person events — and whether or not to continue leveraging virtual engagement to some degree. The big draw to virtual engagements, beyond safety, is that they tend to be less expensive than in-person events. With inflation on the rise and nonprofits relying on limited resources, virtual engagement may be a valuable option going forward.
Cybersecurity awareness and improvements
Nonprofits have a treasure trove of digital information cybercriminals and hackers would love to get their hands on. Unfortunately, basic firewalls and security measures no longer prevent cyberattacks from happening. Cybersecurity threats are becoming more and more sophisticated and are a real risk for nonprofits.
Conduct regular cybersecurity assessments and build cybersecurity awareness and training into your organization’s IT infrastructure plans. Set aside adequate resources in the budgeting process to identify and strengthen vulnerabilities.
In our recent Cybersecurity and Nonprofits blog, we provide some basic and intermediate recommendations for nonprofits to consider.
Creating and enhancing operating reserves
Many nonprofits learned the value of a strong operating reserve — and a comprehensive policy governing its use — early in the pandemic. While many organizations saw enhanced balance sheets due to economic relief and donor support throughout the pandemic, creating and enhancing operating reserves is a growing priority.
We all know and love the value of unrestricted contributions; operating reserves are simply donor funds without restrictions set aside to help with unexpected events, increased prices, loss of income, and large unbudgeted expenses. Given the rise in inflation, competitive labor market, and the ongoing pandemic, it is important for nonprofits to consider creating or enhancing their operating reserve balances. As the budgeting process is completed, management and those charged with governance should collaboratively discuss their current and future needs and build reserves to address those needs.
Educating donors about operating or strategic reserves is an important part of the process, so they don’t see large surpluses or significant net assets and start thinking your nonprofit doesn’t need their support. Donors can more accurately and timely support nonprofits if they understand how current events are impacting them financially and what the greatest needs are for future success. Review current reserves now to help create stability and reduce long-term viability concerns.
How we can help
The demand for nonprofit services and outreach continues to grow, and CLA is here to help your organization achieve those new levels. Start assessing your priorities and resolutions today.
Below are a few services that may be of interest as you set your goals for the coming year.