Let’s explore what these expectations look like as well as how to attempt to alleviate that pressure on staff.

The overhead myth and the nonprofit starvation cycle

Overhead refers to costs to the organization that are not specific to programming or service delivery. This includes payment for office space, salaries of non-programmatic employees, and fundraising costs. If your nonprofit occupies a building, you have to pay for electricity, heat, and water. Unless previously agreed upon, you have to pay a salary to your CEO, CFO, and Human Resources staff. You have to pay for office supplies. If you plan on doing any serious fundraising, you have to pay to print off fliers and mailers.

The nonprofit starvation cycle comes into play with charity watchdog sites who rate nonprofits based on the percentage of revenue they spend on overhead as opposed to their total revenue. For example, a nonprofit reports a 6% overhead expense rate. This will attract donors who look upon nonprofits with a higher overhead percentage as inefficient. And that nonprofit with a 6%…

The nonprofit sector faces challenging declines in charitable giving, created by economic uncertainty, global conflict, and the lasting impacts of the COVID-19 pandemic. Reports from Giving USA show that individual giving has continuously decreased, reaching levels not seen in decades. Along with this, Baby Boomers, who have been the backbone of charitable giving, are retiring and passing on their wealth to younger generations. The New York Times (2023) highlights that $16 trillion in wealth will be transferred to Generation X, Millennials, and Generation Z within the next decade. However, with current philanthropic practices being tailored to the Silent Generation and Baby Boomers, nonprofit leaders must consider the best strategies to engage Millennials and Generation Z. After all, these donors may be the key to reversing the decline in charitable giving. To ensure sustainability, nonprofit leaders must implement innovative strategies to recruit, retain, and solicit the next generation of donors.

Enhance transparency to build trust

Increasing an organization’s transparency is a crucial step in building trust with younger donors who often distrust institutions and large-scale fundraisers. These donors also value autonomy and prefer to extensively research an organization before making a donation. Nonprofit leaders can practice transparency by making financial documents, such as the IRS Form 990, audited…

Why community collaboration matters

Community collaboration refers to the partnerships fostered between NPOs and the communities they serve, including local organizations, businesses, and individuals. These partnerships are aimed at achieving common goals that benefit the community. Effective collaboration strengthens the community as a whole and enhances the impact of nonprofit missions.

Research shows that when nonprofits engage with their communities, they are more likely to improve program outcomes, expand services, and increase funding. Direct engagement leads to better community satisfaction, more relevant programs, and improved access to local resources. By building partnerships, nonprofits can address complex issues more effectively fostering a sense of trust.

Trust is a cornerstone of successful collaboration. NPOs must ensure they authentically represent and involve the communities they serve, particularly historically marginalized groups. A…

Nonprofit organizations (NPOs) face a unique challenge when it comes to proving their impact. Unlike for-profit companies, where success can be measured by revenue and market share, NPOs are measured both financially and socially (mission) - an often intangible and difficult-to-measure goal. From mental health interventions to civil rights advocacy, proving the success of NPO efforts is crucial for mission alignment and financial sustainability. Funders increasingly demand transparency and measurable results, making the ability to demonstrate impact essential for nonprofit leadership.

The importance of transparency and public trust

Trust is the cornerstone of nonprofit funding. Studies show that nearly 70% of donors consider trust essential when deciding where to give (BBB Wise Giving Alliance, 2019). Transparency around accomplishments, financials, and operations helps build this trust. When nonprofits demonstrate the outcomes of their programs through their websites, they enhance public confidence and secure long-term donor support.

To enhance transparency, nonprofits must also communicate how donations are used, including funds allocated toward critical operational expenses, often referred to as "overhead." While donors historically frown upon funding overhead costs, public perception is gradually shifting. More donors now understand that investments in infrastructure, such as data collection tools and staff training, are…

Burnout is a problem in all sectors; however, research suggests that those in the helping profession are more susceptible. Nonprofit organizations often attract individuals who want to make a difference in the world, and who care deeply about others. Unfortunately, these employees are more vulnerable to burnout. Over 50% of the nonprofit sector is impacted by burnout. It can take an average of 14 months to two years to fully recover from burnout. Being able to notice the signs and intervene earlier in a successful way can reduce the costs of potential voluntary leave from the organization. 

Nonprofit organizations are only as successful as the teams that run the organization. It takes active leadership to ensure employees are not showing signs of burnout. The work of nonprofits is critical to those that they serve. This weight can be a load on employees and leadership. It is critical for leadership to address these weights to drive burnout from the organization. Several factors can contribute to minimizing employee burnout. It is up to leadership to take the initiative to protect their employees and themselves. 

Work culture

Cultivating a positive work culture can prevent burnout.  Positive work habits and culture can start from the top and can trickle down to employees. Leaders who can also prioritize their employees’ health and create a positive work culture can create an environment where employees feel valued…