Service providers need help too. Nonprofit community service organizations are the providers of our society, offering support and vital service programs to at-risk populations. But nonprofits are facing declining government funding and the challenge of providing programs that are adaptable yet effective. These shrinking resources are causing nonprofits to work harder with less, resulting in staff burnout and overall battle fatigue as common outcomes.
Yet, these services are both needed and necessary, and it’s more important than ever that they are given the support they need to optimize their deliverables.
But where can nonprofits go to sustain themselves in the face of these mounting pressures?
Nonprofit Sustainability – Not an Oxymoron
Nonprofits face an urgent question: How do they achieve organizational sustainability? The National Council of Nonprofits (NCN) suggests sustainability encompasses several goals:
- Financial stability.
- Leadership succession planning.
- Strategic planning.
When nonprofits are on a treadmill of just covering costs without getting far enough ahead to build their infrastructure, the NCN calls it “the nonprofit starvation cycle.”
Nonprofits that fail to create capacity planning for their future state will live in this hand-to-mouth existence. Inevitably this leads to staff burnout and services that fail in achieving the long-term goals of the organization.
The NCN suggests that part of the problem is nonprofits don’t understand the true costs of service delivery. But organizations should also consider a capacity planning process that encompasses succession planning for leadership transitions that will allow the organization to continue uninterrupted without entering crisis mode when key support staff or leadership leave.
Diversifying income streams is also an important path toward true nonprofit sustainability. But how can nonprofits that are simply struggling to make it day to day find a way to achieve these goals? We’ve found some tools that will help:
- The Foraker Group offers a free tool called the Indicators of Financial Crisis, which helps nonprofits assess the fiscal health of their organization.
- The NCN offers a set of resources around building better budgets that tackle planning, fundraising, and financial leadership for executive directors. They also offer information on nonprofit internal controls that can help these organizations systematize checks and balances to help them grow.
- Propel Nonprofits offers a free overhead cost definition worksheet that identifies financial overhead categories to get your budget back on track.
- Blue Avocado has a great article on the idea of nonprofit overhead. It breaks down fixed versus indirect costs, administrative, and shared expenses. It’s an important piece of homework for board and finance planning committees.
- The Public Interest Management Group offers their Success Factors for Nonprofit Organizations, which is also a suitable tool to share with a board of trustees. In it, they outline the success metrics that contribute to nonprofit sustainability in the long-term.
- Capacity for Health (C4H) offers capacity planning as a tool for nonprofit service organizations to increase skills, knowledge, and expertise to create sustainability and achieve goals. The process includes strategic planning, change management, coaching, and board development to improve both your mission and margin.
All of these tools can help nonprofits exit the cycle of just struggling to survive, placing some breathing room between insolvency and the services they provide.
Today, nonprofits are facing increasing pressures to stretch services future while remaining adaptable to the fast pace of change in our society. With government funding for many services expected to continue to decline, nonprofits must take time to conduct capacity planning to achieve sustainability for the future.
The mission of C4H is to help nonprofit service organizations create long-term, sustainable best practices that improve the organizational outlook. Together with our clients, we work to tackle the areas that need improvement in nonprofits that are struggling with organizational effectiveness. Click here to find out more about our support services.