Page 7 - 2024 Nonprofit Industry Trends
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 DAVID GOLDSTEIN  JAN FISHER  JUDY SIEGEL, ESQ.                                              JOHN MILLER

 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.
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