Rose Report: Issue 56
Overcoming Today’s Nonprofit Challenges
By Ted Rose, CEO, Rose Financial Solutions
With today’s economic headwinds and workforce shortages, nonprofit organizations face challenging times. Caught between shrinking resources, both financial and staffing, and rising demands from those affected by the economic downturn, organizations have to get by doing more with less.
Reports show that nonprofit organizations around the country are having difficulty retaining staff and filling vacancies. In fact, according to a December 2021 report from the National Council of Nonprofits, three out of four nonprofits (76%) reported job vacancies of greater than 10%, and 42% had 20% or more of their positions open. Organizations can’t provide the same volume of services, let alone meet increasing demands, without adequate personnel. And that is only half of the equation. According to the 2022 First Quarter Fundraising Report, donations decreased 5.6% comparing the first quarters of 2022 to 2021, and the donor retention rate of those who gave in 2021 and then again in 2022 decreased 6.2% year-over-year. As donations and donor retention rates dwindle, nonprofits must ensure that despite resource shortages, they can meet their missions.
While the challenges facing nonprofits are daunting, there are actions they can take now to achieve their 2022 goals. They include:
Obtain Financial Clarity
The importance of forecasting expected revenues and expenses should be top of mind. It is crucial to have an accounting infrastructure that delivers timely, accurate, and consistent financial reporting to quickly identify funding shortfalls and adjust to get back on track. Make sure to forecast quarterly for any unexpected changes in key cost drivers.
Outsourcing has grown in popularity for nonprofits that are having trouble filling positions. Another factor that makes outsourcing desirable is its cost-effectiveness. In fact, according to Deloitte, outsourcing was used by 70% of companies in 2020 to save on their expenses. Although cost savings are essential in these uncertain times, outsourcing has additional advantages including a larger team of knowledgeable professionals, fewer onboarding procedures, and faster delivery.
Implement Project Management
During uncertain times, nonprofits must ensure that projects remain within budget and timeline, despite shortages in human resources. Implementing a project management system helps guarantee that each project’s objectives are met in terms of time and cost. Ensure the system connects finance and accounting functions, provides budgeting and forecasting, and tracks project progress.
With RFS, our nonprofit clients are ideally positioned for project success. Having an in-house finance, accounting, and tax department at a fraction of the cost is possible with our Finance as a Service (FaaS) solution. A combination of our cutting-edge technology platform, Easby, and our team of finance, accounting, tax, and technology professionals provides an accounting outsourcing solution that allows nonprofits to do more for less.
Our people, processes, and technology support our nonprofit clients by:
- Establishing a modern accounting and finance infrastructure
- Connecting disparate systems currently utilized for business processes
- Implementing best practices to meet needs and reporting requirements
- Managing ongoing AP, AR, and payroll functions
- Performing month-end close and financial reporting
- Supporting grant reporting requirements
- Ensuring you are audit ready year-round
Discover how RFS can help your nonprofit organization achieve success. Please visit our pricing calculator to find out how cost-effective our solution is.
This content is for information purposes only and should not be considered legal, accounting or tax advice, or a substitute for obtaining such advice specific to your business.