Not-for-profits face an uphill battle at the best of times, attempting to stay relevant, and solvent, as they pursue an agenda that may not dovetail with economic expediency. Behind these obvious challenges lurk a host of other potential pitfalls which threaten to complicate, if not irradiate, their good work. Suffice to say, things haven’t gotten any better in 2020. (Have they for anybody but the super wealthy?) As Halloween approaches, let’s face these frights head on.
Recruiting Not-for-Profit Talent is Tough!
Running and growing a not-for-profit is not for the weak of heart. Tackling the challenges that comprise the rest of this list requires qualified professionals, preferably with legal and financial knowledge, as well as experience in the not-for-profit sector. Budgetary constraints often force not-for-profits to enter the recruitment arena without the ability to match their competitors in the for-profit sector dollar for dollar. Even those who can afford to spend money to recruit top talent may worry about the message such expenditures send their donor base, who may prefer to see their money go straight to the organization’s central cause.
The task is not impossible. Bloom Group, a not-for-profit based in Vancouver’s Downtown Eastside, recently found themselves needing to replace an outgoing Director of Finance. I searched our extensive database, contacting a range of qualified candidates. I chose to emphasize the organization’s strong sense of purpose and progressive culture, as well as the opportunity for leadership, knowing that this would prove enticing to many.
For more information on this successful recruitment, read our Bloom Group Case Study.
Covid-19 Impacting Fundraising Events
It goes without saying that 2020 has been a tough year for event planners. Many not-for-profits rely on special events as the central pillar of their fundraising efforts. For theatre and musical groups and the like, the events themselves are the raison d’être. The Royal Canadian Legion’s famous annual poppy campaign has been dealt a harsh blow by social distancing protocols.1 Overcoming these challenges requires creativity and resourcefulness.
Fundraising: Less to Give, More in Need
Further complicating fundraising efforts are the economic realities associated with Covid-19. Financial hardships mean that some donors are tightening their purse strings. Concurrently, economic, physical and emotional hardships result in a greater need for the services offered by some not-for-profits.
It’s important to remember that not everybody is struggling financially this year. The so-called ‘K shaped economic recovery’ means that many at the top end of the economic spectrum are doing just fine, and should be called upon for increased giving.2 In fact, according to the Harvard Business Review, they may be more willing to give.
“The pandemic has caused us all to be more conscious of our mortality. We’re thinking about what is truly important in our lives. Many donors will be open to supporting causes that will live on beyond themselves.”2
Not-for-Profit Budgeting
“Today’s non-profits are facing a perfect storm of epic proportions,” according to a recent report from Accounting Today. “The role accountants play in helping them navigate the turbulence has perhaps never been more important.”3
With so much of their budget going directly to the mission at hand, many not-for-profits fail to maintain an adequate safety net for operating expenses. Much of this budgeting (or lack thereof) has been the fallout from unqualified accountants, which is why organizations are increasingly turning to Certified Public Accountants, while also seizing the opportunity to update dated accounting software.3
Not-for-Profit Liability and Insurance
Property damage, slip and fall, wrongful act, breach of fiduciary obligation, all can result in potentially expensive claims. Staff or volunteers may act unethically. Data, including donor information, can be breached as a result of cyber-crime. From wrongful termination and sexual harassment claims to fender benders related to the organization, difficult situations can, and do, arise.
In some circumstances Directors and Officers can be held personally liable for issues related to the organizations they oversee. Because of this, it’s important that a not-for-profit organization have a clear understanding of their insurance policy.
As the old phrase warns, no good deed goes unpunished. The above list represents just some of the challenges and hazards facing well meaning not-for-profit organizations. Fraudsters may attempt to impersonate your organization in order to steal from would-be donors. An isolated negative incident could result in bad press for your organization, compromising your ability to raise money in the future. Failure to comply with regulation could result in fines, or worse. Unscrupulous volunteers may have their hands in the cookie jar.
Despite the aforementioned treachery, an absolute sense of dedication to the mission at hand makes the journey worthwhile. With dedicated and qualified personnel, the long and winding road can be steadily navigated.
