Nonprofit organizations exist in numerous communities throughout our country. Even though they provide many valuable services and programs to needy individuals, operating a nonprofit organization certainly has its challenges.

What exactly are the challenges facing nonprofits, and how can they tackle them efficiently and within their limited resources?  The following are the six most common strategic issues facing nonprofit organizations today.

• Limited Government Funding for nonprofits:
  • Many nonprofits depend on the assistance of the government in the form of grants and/or matching funds. Reduction in budgets at the state, national and municipal levels means there is less funding available and may cause nonprofits to cut or eliminate services to their communities.
• Pressure on nonprofits to show results and strategic solutions:
  • In the past, a nonprofit’s emphasis was on showing that programs were being used and accessed by those they aimed to support. Now, largely because there may be less available in funding, the pressure has shifted.  Your nonprofit must demonstrate that its social impact objectives are being achieved, which can be a much more complex calculation.
• Not running nonprofits like a business:
  • Nonprofits often put their social impact goals at the forefront and their business objectives second. This is common practice at times but the challenges occur when there is not enough funding to cover current operations.  Revenue, expenses and social impact must all become aligned to deliver real life-changing results across all programs.  To ensure your mission never loses sight of its capability, you should use the right tools and recognize the importance of real time break-even analysis.

• Attracting and retaining the right talent:
  • Many nonprofits struggle to win the battle for talent when competing with opportunities in other sectors. People attracted to nonprofit work are generally very dedicated to the cause they serve.  However, the limited resources many nonprofits have makes it tricky to recruit top talent. In order to prevent this, nonprofits need to invest in their employees and provide an engaging work experience that allows people to focus on why they love their work and the mission they support.
• Increase in the need for nonprofit services:
  • Across the board, nonprofits are seeing significant increases in the need for their services. Poverty is a real issue and many people are facing economic hardship as well as a huge uptick in mental health cases.  This puts the burden on nonprofits to respond quickly to unpredictable situations and deliver much-needed services.
• Nonprofits challenge to keep their eye on the bottom line:
  • Employees working at nonprofits tend to wear many hats. Finding tools that empower everyone to analyze information and make data-driven decisions is essential.  Providing training sessions to employees will help them understand the budgeting and fundraising challenges nonprofits face and how these challenges impact the services the organization offers to the community.

Nonprofits that are serious about being around for the long-term need strategies to mitigate these challenges and use them as a starting point for a comprehensive business strategy.  Approaching an operational strategy from this perspective is essential to sustaining successful operations.