NFF’s 2015 State of the Nonprofit Sector Survey focuses on the underlying causes of these dynamics by exploring the programmatic, financial, and operational issues facing nonprofits across the U.S. It launched the Survey in 2008, when economic crisis threatened the viability of many organizations.
Seven years later, results from 5,451 respondents show some indications of recovery, stabilization, and growth. Nonprofits are adding jobs, engaging in strategic conversations such as leadership succession planning, and looking to retain their workforce. Yet as they raise their sights from the focus on short-term crisis, many are confronting the troubling reality that current practices cannot sustain organizations in the long-term or meet the needs of the communities they serve now. Many organizations have stumbled out of crisis looking to make the necessary investments to secure their long-term future. And it is a hard road ahead.
Key findings
Under-resourced communities are going without because nonprofits can’t meet demand. Americans — particularly those in low-income communities — are still struggling to secure jobs, affordable housing, and healthcare.
76 percent of nonprofits reported an increase in demand for services — the 7th year that a majority have reported increases.
52 percent couldn’t meet demand — the third year in a row that more than half of nonprofits couldn’t meet demand.
Of those who reported that they could not meet demand, 71 percent said that client needs go unmet when they can’t provide services.
The 2015 NFF Survey Analyzer at survey.nff.org allows you to investigate questions that cut across sub-sectors, budget size, geography and other dimensions.
By Jim Simpson, CPA and director, Financial Technologies & Management |
In 2013, over 1.5 million tax-exempt organizations in the U.S. reported $1.74 trillion in total revenues and $1.63 trillion in total expenses, according to the National Center for Charitable Statistics. That means nonprofits are responsible for reporting and tracking all that financial information.
In September, Abila, a nonprofit software company, set out to understand this current financial landscape and interviewed 350 nonprofit finance professionals. Specifically, they wanted to:
learn about the day-to-day challenges facing nonprofit finance professionals
define emerging trends in fund accounting and technology
apply how trends and challenges differ based on the organization
Nonprofit boards and leaders should pay careful attention to the Nonprofit Finance study. The study reveals that the trends are for smaller, leaner finance teams and the importance for leaders to improve the finance department by implementing more efficient software products and processes.
Finance teams staff feels too many of their limited resources are spent on day-to-day activities, and not on more important strategic and planning activities. A typical finance team says they spend significantly more time than they would like in the following areas: helping other departments, month-end-closing, financial reporting, grant reporting, bookkeeping, accounts payable, accounts receivable and payroll processing. Their preference would be to spend more time with strategic and planning activities including strategic accounting, financial analysis, budget planning, and board engagement and development department activities.
Here are some key findings and study recommendations for how you, as a nonprofit finance professional, can overcome similar challenges.
Interruptions are common:It would help if other departments would schedule collaboration times and learn to self-manage their finance role to minimize interruptions to the finance department.
Nobody is above the basics:Nearly all financial/accounting professionals continue to be involved in the day-to-day activities of the organization. This is reflective of a trend towards smaller, leaner finance teams.
Funding is (obviously) key:Organizationally, finance/accounting professionals identify long-term sustainability and finding new funding sources as the biggest challenges.
Embracing the cloud:Larger organizations are moving to the cloud quicker, and see greater value and benefit to cloud-based software. Overall, most of the respondents see the cloud as beneficial, with security being the biggest area of concern.
Finance/accounting professionals want to focus more on strategy:By and large, respondents spent much of their time focused on either running reports or preparing for monthly presentations, and would like to spend more time on strategic and budget planning.
Jim Simpson, CPA and director of Financial Technologies & Management, is a financial leader and trainer, Software Advisor, CFO advisor, controller and forensic accountant to nonprofit organizations since 1999, serving over 350 nonprofit clients. He has worked as a CFO, controller and software advisor for over 25 years.
Contact Financial Technologies & Management to learn how our firm can improve your organization’s financial management operations and capacity. You can schedule an appointment directly from the website at WWW.FTMLLC.COM, or emailinfo@ftmllc.com; or phone at 317-819-0780.
The critical challenges society faces — such as water scarcity, access to education, and the rising cost of healthcare — increasingly require the business, government and nonprofit sectors to work together to create lasting solutions. But this is only possible if the senior executives of our leading institutions are what Dominic Barton, Worldwide Managing Director of McKinsey & Company, refers to as “tri-sector athletes” — leaders able to engage and collaborate across all three sectors.
Our research at The InterSector Project shows that these leaders often have prior experiences in each sector and a unique ability to navigate different cultures, align incentives and draw on the particular strengths of a wide range of actors to solve large-scale problems.
Take water scarcity. A potential 40 percent gap between global freshwater demand and supply by 2030 puts billions of lives — and dollars — at stake. And all three sectors have skin in the game. For agri-food and beverage businesses, fresh water is an essential ingredient in their production process. Governments are often the stewards of water and regulate its use. Nonprofits work to ensure access to clean water and conservation of watersheds and the environment.
