The Uncertain Fundraising Challenges For Not-For-Profits

The impact of the Covid19 pandemic, and resulting economic recession, has left many organisations across the globe struggling to get back on their feet, with Not-For-Profits significantly affected. Though the struggle among Not-For-Profits can be traced back to the last decade, the events of the last few months have worsened fundraising challenges for nonprofits and a large number of other charity organisations.

Many Not-For-Profits have seen significant declines in revenue since March 2020, leading to many being unable to provide the normal services communities have come to rely on them for. This is understandable as many economies are just beginning to open up after various lockdowns which were put in place by governments across the globe to curb the spread of Covid19.

Having said that, even if we take the Covid19 pandemic out of the equation, evidence suggests that there has been a massive decline in the financial strength of most charities over the last decade. The major cause of this, and the possible solutions are listed below.

A Drop In Donations

Not-For-Profits thrive on donations, both individual and corporate, and grants from the government. With the ongoing global recession, it is no surprise that there has been a great reduction in the amount of money that come in through such donations. 

If they are to survive, Not-For-Profits must innovate and find new ways to generate revenues. They must be willing to employ modern means of finding, and reaching out to, donors. This may include the use of advertising campaigns on popular social networking platforms and lead generation tools on their websites.

Lack Of Transparency And Mismanagement Of Funds

Lack of transparency and mismanagement of funds are two elements which have historically caused challenges for Not-for-profit organisations and their perception in the broader community. Both of these give rise to issues of trust, and mean that individual and Corporate donors withhold their resources from charities.

Not-for-profits must operate a very transparent policy that upholds thorough accountability for all funds received. Cases of mismanagement of funds should never be ignored, and must be dealt with swiftly and communicated to donors and the community in an open and transparent manner. This approach ensures that the most important tenet of a Not-For-Profit, trust, is strong within the donor base, and the community.

  • Depending Only On Donations

Though donations can be a great way of generating revenue for Not-for-profit organisations, relying only on donations introduces significant risk. To ensure viability during the current economic recession and beyond, Not-for-profit organisations need to be able to have alternate sources of income other than donations.

This can include renting out their space for events, renting out educational materials, and ensuring that operational cash reserves are sufficient to cover 6-12 months of low or no donations. That way, should donations diminish, the organisation will have sufficient funds to ‘weather the storm’.

Although this may be a shift away from standard operations, and may feel ‘foreign’, as time goes on, operations will normalise, and the organisation will move into a ‘new normal’ that will ensure its long term viability and compliance with regulations.

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