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Top Seven Challenges for Nonprofit Organizations in 2018

Top Seven Challenges for Nonprofit Organizations in 2018

Nonprofit financial leaders have a lot on their plate. From shifting tax codes to changing regulations to the increased competition for donors and volunteers, leading a nonprofit is no easy task. But the challenge is half the fun and makes success that much more rewarding. Knowing this, even if your mission and your path to achieve it is unique, you likely face the same challenges as others—both internally and externally.

Challenges and Priorities for Nonprofit Organizations

In December 2017, Wipfli LLP, a top 20 accounting firm and leader in consulting, technology, and advisory services, surveyed over 350 financial professionals at nonprofit organizations to see where they stood and where they hoped to be.

The resulting report, The Nonprofit Financial Priorities Benchmark 2018 Survey, looks to find several key aspects necessary for growth and operational efficiency recognized by nonprofits as needing their time and attention this year.  Among the issues discussed:

  • The Number One Challenge for Nonprofits in 2018
  • The Top Financial Priorities
  • Top Financial Challenges for Nonprofits
  • Accounting System of Choice
  • Organization Size, Tax Status, and Employment Numbers
  • Respondent Demographics
  • Top Takeaways and Initiatives for Nonprofit Leaders

As we highlight some of the key takeaways from the study today and over the next few months, we invite you to download the entire report here.

Seven Top Challenges for Nonprofits Leaders in 2018

From regulations to revenues, staffing challenges to member recruitment, nonprofits face a multitude of challenges as they look to progress through 2018 and into the future. Out of the twelve “top challenges” listed, nonprofit leaders were most concerned about these seven:

1: Government Regulations and Tax Reform

A common concern—both inside and outside of the nonprofit world—is the impact of changing regulations and tax reform. From the paper-cutting maneuvers by the Trump Administration to the largest change in tax code in more than three decades, nonprofits are working diligently to adapt, but face challenges doing so, with 18.8% listing Government Regulations as their top challenge.

Among the biggest questions:

  • Will the increase of the standard deduction reduce the likelihood that individuals donate, or will it help the economy enough to increase donations?
  • With changes in regulation and legislation, will we be able to bill for services and receive the same funding as we used to?

Beyond this, the regulatory environment affects many of the other top challenges as well.

2, 3, 6: Organization Growth, Revenue, Funding, and Fundraising Concerns

As mentioned above, changing regulations also have an impact on the way nonprofits compete, generate revenue and operate. Always a concern for nonprofits, increasing competition for donor and member money creates perpetual risk and opportunity. Coming in at 2, 3, and 6, Growth/Generating Revenue, Funding/Donors, and Fundraising were the top concerns for 16.7%, 11.3%, and 7.5% of nonprofits respectively.

4: Staffing and Volunteer Challenges

A consistent concern for nonprofits, 8.5% saw staffing and volunteer recruitment challenges atop their list of concerns for 2018. With high employment numbers, rising wages, and increasing time at the office, finding people to work and volunteer could pose a challenge in the coming months and years.

5: Technology and Software Concerns

Another perpetual challenge for nonprofits, issues pertaining to manual, paper based processes and outdated software fall in at number five on the list of top challenges for nonprofits, with 7.5% of respondents seeing is as their top challenge.

Again, this issue is one of those that creates a ripple effect—ineffective software reduces the reliability of reporting, harming the overall transparency of a nonprofit, creating additional challenges in growth, funding, and fundraising. With outcome metrics one of the many ways nonprofits can improve communications, the right technology can also create a positive effect. Better communication means more donations, while automation means less reliance on labor. In turn, this leads to faster, less painful growth.

7: Membership and Recruitment

A unique challenge for membership organizations and associations, recruiting new members and retaining existing ones can be a challenge, and is a top challenge for 7.5% of respondents. Again relating to technology and other factors on the list, membership organizations need to prove their value to members and prospects if they want to succeed.

Get the Guide

The entire Nonprofit Financial Priorities Benchmark 2018 Survey discusses these challenges in much more depth, as well as some of the opportunities for nonprofit organizations, charity, and membership organizations to thrive as they progress through 2018 and forge into the coming years. We hope you stay tuned for more, and welcome you to contact us to learn more about our services for nonprofits.

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