Is there competition between nonprofits? Probably, even if it is not head-to-head competition.
- The number of nonprofit organizations increases daily.
- Charitable donations by individuals are declining, as is the number of givers.
- Major donor giving has stalled and the number of givers is shrinking.
In short, more nonprofits are seeking funds, less money is being donated, and fewer major donors are redistributing the same amounts of money.
The Lilly Family School of Philanthropy at Indiana University reported that 20 million fewer households gave in 2018 than in 2000. That does not even consider the impact of the new tax law or the volatile stock market.
What Can Your Nonprofit Do?
The first thing to do is to embrace the fact that your nonprofit is not a statistic. You are smart, compassionate, and resilient. You do good work and are fully capable of adapting and improving. Forget the whole competition thing. There is more than enough funding out there for your nonprofit to not just survive but thrive.
A few years ago, Fidelity Charitable conducted a rather extensive survey entitled Overcoming Barriers to Giving. They surveyed more than 3,200 people who give and explored why donors aren’t giving as much as they’d like and what might help them to give more.
Here’s something important we learned:
More than 80% of donors cite concerns ranging from unease about determining an organization’s credibility or trustworthiness to frustrations that some nonprofits do not always explain how a charitable donation will be used.
Here’s the lowdown. Nonprofits need more funding. Funders need more confidence. More confidence comes from demonstrated operational competence. Funders with more confidence give nonprofits more funding. Operational competence can be measured and improved.
How Your Nonprofit Can Demonstrate Organizational Competence
Assessments based on accepted best practices and proven industry standards can help you determine your nonprofit’s current level of competence in all six areas of nonprofit operations and understand their importance, the consequences of nonperformance, and what you need to do to improve.
The six areas of operations are:
- Program Management & Accountability
- Fundraising, Marketing & Communications
- Governance, Legal & Risk Management
- Finance & Accounting
- People and Organizational Development
- Business Systems, IT & Facilities
Once you have a baseline of your operational competence in any of these six areas, you can confidently communicate where you are currently with your donors and your plans to improve.
The benefits are twofold. First, your overall operational effectiveness will improve and second, your transparency will bolster your donor’s confidence in your credibility and trustworthiness. Funders with more confidence give nonprofits more funding. Viola!
Are you ready to leave the competition in the dust… or at least your competitive impulses?
For more thought leadership on nonprofit Best Practices, measurement and how to achieve operational excellence, please visit The Capin Center for Nonprofit Excellence, where nonprofits, funders, and recognized experts work together for the greatest impact. We make nonprofits better. We can help yours.