The vast majority of nonprofits in the U.S. are small, community-based operations with budgets of less than $500,000 a year. These organizations provide a rewarding and exciting work environment where employees forge strong relationships and learn new skills while contributing directly to a cause they care about. But small nonprofits also come with a unique set of challenges. Let’s take a look at some common issues that these organizations face, along with some tips for addressing them.
- Funding
Financial challenges are one of the most common issues that small nonprofits encounter. They often rely heavily on donations and grants for funding, and even minor fluctuations in individual contributions or the loss of one grant may significantly impact financial stability. Diversifying revenue streams—receiving funding from as many different sources as possible—is one of the primary ways that organizations can manage this risk.
When assessing new funding sources, organizations should consider the level of risk involved as well as any associated costs. For example, if your organization is deciding which grants to apply for, carefully analyze both the likelihood of winning and the amount of time and resources that will go into the application process. Additionally, you will want to consider the level of autonomy provided by different types of income. Some sources of funding are restricted and can only be used for programs and services, while others are more flexible and can be used as needed. Striving to develop diverse and flexible sources of funding can help small organizations manage risk effectively.
- Staffing
Small nonprofits often rely on a limited number of full-time staff, and issues with retention due to burnout are not uncommon in this environment. Many organizations rely on the support of volunteers to address this challenge, and knowing how to attract and retain these individuals is one of the key aspects of managing a small nonprofit.
One of the best ways to attract new volunteers is to showcase how important their contributions are to your organization. The volunteer experience can be shared through narrative stories, compelling images or videos, and facts and statistics that demonstrate the real impact of these contributions. Channels for highlighting the work of volunteers include social media posts, annual reports, newsletters, the organization’s website, and community events.
Nonprofits should also go beyond a basic description of the role when advertising volunteer opportunities and consider some of the primary reasons that individuals choose to contribute, like the opportunity to socialize, gain work experience, or make a difference in the community. Consider sharing information like a list of skills that volunteers will develop, a description of any training or education that will be provided, and networking or social opportunities involved. Attracting the right volunteers and providing them with growth opportunities improves the likelihood that they will stick around and make meaningful contributions.
- Visibility
Smaller nonprofits often lack dedicated communications or marketing teams and, as a result, gaining recognition with public audiences can be a challenge. These organizations need to be strategic when developing promotional content and deciding how to share it. According to Lauri Hennessey, the Head of Marketing Communications for One Love Foundation, small nonprofits should prioritize digital communication. Social media platforms provide a particularly cost-effective means to reach a wide audience, engage supporters, and raise awareness for your nonprofit’s mission.
The choice of social media platforms for nonprofits can vary depending on the target audience, goals, and the type of content being shared. Organizations should research and analyze where their target audience is most active and tailor their social media strategy accordingly. Many nonprofits maintain a presence on multiple platforms to maximize their reach. Regardless of the channels you choose, use consistent themes and visual elements in order to develop a memorable brand that audiences will grow to recognize over time.
- Strategic Planning
The leadership and staff of small nonprofits are often stretched thin, and they may be tempted to put off strategic planning as they focus on more immediate and pressing operational needs. However, according to nonprofit board member and executive director Debbie Nguyen, strategic planning is critical for small organizations with limited resources. Leaders need to carefully choose priorities and align stakeholders on a single set of goals for the organization. Staff, board members, donors, partners, and clients should all have a shared sense of where the organization is headed in the coming years.
The strategic planning process typically involves conducting a strategic assessment, outlining goals, determining tactics, and choosing metrics to evaluate performance. Leaders of small nonprofits that are new to strategic planning should start by asking questions like: “What is the reason for our nonprofit’s existence? Where do we want to go in the future and how do we get there?” If everyone is aligned around a shared mission and vision for the future, developing and implementing an effective strategy will be much easier.