Page 6 - 2024 Nonprofit Industry Trends

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DAVID GOLDSTEIN JAN FISHER JUDY SIEGEL, ESQ. JOHN MILLER

CHAIR OF THE NONPROFIT/TAX EXEMPT EXECUTIVE DIRECTOR SENIOR STAFF ATTORNEY CHIEF EXECUTIVE OFFICER
/RELIGIOUS ORGANIZATIONS PRACTICE GROUP NONPROFIT WESTCHESTER PRO BONO PARTNERSHIP GUIDE DOG FOUNDATION/
CERTILMAN BALIN ADLER & HYMAN, LLP AMERICA’S VETDOGS
In order to achieve their mission-related goals, nonprofit leadership needs to position Nonprofit organizations continue to operate with insufficient infrastructure and resources. Our workforce There are several significant issues facing the nonprofit sector: (1) increased need for services; (2) As we transition from 2023 into 2024, the most significant issues the nonprofit
the organization to withstand the economic headwinds that we are sailing into, manage and clients deserve more. Equitable contracting with government partners and nonprofit agencies staffing shortages and retention; (3) delay in payment to nonprofits for the services being provided; sector is facing are fundraising in times of uncertainty (the economy and the
the demands of a shifting workforce, a shifting workplace, and a shifting fundraising is essential to ensure that government mandated, and other critical services, are delivered to our (4) more and more nonprofits chasing fewer and fewer dollars/funding. upcoming congressional and presidential elections year) and talent management
environment, upgrade information technology infrastructure, and protect against the society’s most vulnerable citizens – frail seniors; people with disabilities; survivors of domestic violence; and the shifting nature of work, including the continued rise of remote and hybrid
barrage of cybersecurity threats. Don’t forget succession planning and strategic planning children suffering abuse; people confronting mental illness, food insecurity/hunger and homelessness; The Sector needs to implement several processes to minimize risk and maximize the ability to provide models.
for the long-term sustainability of the organization and its ability to accomplish its mission. jobseekers and more. Delayed procurement and late payments by government partners over decades services. First, the Sector needs to take meaningful steps to quantify the additional services it will need
And throw in the need to do all of that while still building and maintaining engagement has seriously weakened the nonprofit infrastructure and has caused significant operational hardships for to provide. Then, each nonprofit needs to realistically assess its individual capacity to provide these Over the last couple years, fundraising has been challenging, and current economic
with the Board and staff, as well as with the organization’s supporters and donors. Did I too many agencies. Below market wages for New York’s nonprofit workforce and insufficient allowable services. It’s not enough to project that the need for services will increase by 17%, the nonprofit has and political conditions don’t bode well for nonprofit fundraising in the short term.
to determine if its Certificate of Incorporation (COI), the legal document that describes the work the
mention maintaining appropriate internal financial controls, and assuring compliance with reimbursement for necessary administrative and overhead costs, can no longer be absorbed by nonprofit nonprofit is legally allowed to perform, permits the type of work that is being contemplated. If not, the With economic uncertainty, rising costs, and domestic and international upheaval,
the ever expanding raft of regulations and governance requirements facing nonprofits? Be organizations. This continues to destabilize nonprofit organizations, negatively impact our communities COI will need to be amended, which takes time. The nonprofit must ask itself if it has the capabilities people are holding onto their money. To mitigate these challenges, nonprofits must
absolutely certain that your corporate governance is in order, that your Board and your as a whole, the people we serve and the nonprofit workforce, and perpetuates unnecessary inefficiencies. to address this additional need from a staffing, resource, and infrastructure perspective. The nonprofit proactively diversify their revenue streams and find ways to better partner with
Board committees are functioning like well-oiled machines, and that your Board members should also determine if it is best suited to provide the services needed. Should it partner with another their donors.
and officers are meeting all of their extensive fiduciary duties under the law. You need to do Nonprofits must come together to advocate for the entire sector. This will benefit their individual and all organization, or refer a particular type of work to a different nonprofit? By performing a thorough
this from the twin imperatives of protecting both the organization and the individual Board agencies. self-assessment, the nonprofit will reduce the risk of unexpected, negative financial impact. Talent procurement and management continues to be a significant issue for all
members and officers from liability. businesses, and with nonprofits traditionally on the lower end of the wage scale, it
1. Support livable wages and reasonable fringe benefits for the nonprofit workforce. Nonprofits are The nonprofit community also needs to advocate for itself. Many nonprofits contract with local and
Nonprofits will need to continue to evolve, and to continue to adapt, and now at an essential partners to government in the delivery of mandated and other critical services. A partnership state government to provide social services that fill gaps where the government falls short. In exchange, is an even more significant issue. In the upcoming year, organizations in general
unparalleled pace because of the quantity, quality, and diversity of the challenges facing that was originally based on an understanding that nonprofit agencies bring expertise, efficiency, and nonprofits are paid under the terms of a contract. The nonprofit sector needs to advocate for timely need to look at employee engagement strategies, salaries, and benefits to ensure
them in the upcoming year. Multi-tasking is not enough to manage all of these demands, nor cost savings to the equation in the delivery of services, has essentially become a method that too payment under the contract and utilize contracts with enforceable penalty provisions if the government competitiveness in the evolving market. In addition, with the shift in the workforce
can a nonprofit leader possibly wear enough hats to single-handedly meet these immense often awards contracts solely on lowest bid, suppresses nonprofit wages, and reduces needed benefits fails to perform its job (funding) under the contracted terms. In addition, the Sector needs to ensure from Boomers to Gen Z, organizations need to retool their leadership. The best
and diverse challenges. Leadership must develop and implement a strategy of bringing that wages within contracts reflect the actual, complete cost of providing the services (yes, overhead chance for success for a nonprofit leader is to have clear goals, intentional and
together quality staff, board members, and volunteers, and supplementing these internal including healthcare. The negative impact on the nonprofit workforce cannot be understated. should be included in the cost of services) to ensure workers make a living wage. To mitigate risk empathetic communication and be yourself… “Authentic Leadership”.
resources with external support and resources where necessary, with everyone rowing in the 2. Eliminate caps on administration and overhead. Each nonprofit is different in terms of size and within government contracts, the Sector needs to place a priority on understanding the deliverables
same direction (towards fulfilling the organization’s mission). This purposefully resourced need for administrative investments. Allow nonprofits to explain and justify these expenses rather it has promised — how will the nonprofit be required to report back on its works? Does it have the
necessary data and data-tracking systems to ensure that it will be able to provide the requested
all-hands approach will enable the organization to navigate the oncoming turbulent waters than placing arbitrary caps on critical cost of business expenses that continue to weaken nonprofit data? If not, it may find the monies it receives are “clawed back” by the government for failure to
with insight, skill, empathy, and creativity. As we head into 2024, it appears that nonprofits operational and financial infrastructures. satisfy the terms of the contract.
will be buffeted by yet more challenges and adversity. These cascading, sequential 3.
challenges necessitate that nonprofits operate with an ever-increasing level of agility, Reimburse nonprofit organizations for late payments. Nonprofit organizations cannot continue Finally, the Sector needs to prepare budgets that realistically reflect their financial position, and
efficiency, and effectiveness. Nonprofit leaders will need to remain continually focused on to absorb the considerable expenses that results from late payments on government contracted also contemplate a “worst case” scenario. This comprehensive budget should be accompanied by
developing and then implementing a plan to bring this to fruition, while at the same time services. This is an added expense beyond the control of nonprofit organizations that needs to be fully a strategic plan that identifies what programs/services will be shrunk or eliminated, impact on staff
being nimble enough to adjust on the fly as needed. reimbursed. hours and applicable employment law considerations, and re-assignment of roles and responsibilities.
4. Pay nonprofit 50% upfront for contracted services.