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Nonprofit “Fact Check”
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Nonprofit “Fact Check”

It is important to understand the real facts nonprofits face on a daily basis. When viewed collectively it is quite a reality check and can give you a better understanding of where nonprofits struggle so often just to survive.

First let me begin by stating a older statistic given by the IRS:

“There is one nonprofit organization for every 228 people in the United States! Likewise, this number increases by 175 everyday except on Saturday, Sunday and on holidays.”

Now how would you like to own a for profit company with growth like that?

I think we have to realize that the IRS is not going to allow this growth to continue at the pace it has and so the next few years I think I can safely predict that we will see a huge influx of new rules and regulations in an attempt to weed some of those with tax exempt status out of existence.

Also, as I look deeper into the make up of the nonprofit arena in an attempt to take the current temperature trying to measure the overall health of the sector outside the phenomenal growth rate I see some daunting statistics.

71.2% of Americans do not volunteer

Source: The Bureau of Labor Statistics issues an annual study on volunteer rates in the U.S.

70% of adults give away money

Source: Kim Klein – November/December 2006 issue of Grassroots Fundraising Journal

70% of young nonprofit employees don’t ever expect to serve as the executive director of a charity, according to a new survey released at the national conference of the Young Nonprofit Professionals Network.

Looking again at the above information you realize that only 30% of the population is willing to volunteer and with the increasing number of nonprofits in existence I think it is reasonable to infer that for the foreseeable future there will be a gap in the ability to get qualified people to serve on governing boards of nonprofits.

Having strong board leadership will be more of a problem than ever before unless the older population of retired individuals that have the time will be willing to do more than they are currently doing to serve, which by the way is a lot of time already.

In this brief health check it is good to see 70% of the people give! However, the reason fundraising is such an issue for most nonprofits I am aware of is due to the time and moreover the emotional capital it takes for staff and board members. Asking people for money is not easy regardless of what people might say. But fundraising is not really just asking people for money which is something many nonprofits seem to be clueless to this fact.

Instead of nonprofit executives spending all their money and time on rushing out to buy every book or going to every seminar they can on fundraising looking for the silver bullet they need to stop and ask themselves what they really know about relationship building! If in kindergarten you hogged all the toys and said “mine” all the time then rest assured a development director you should not be! I am joking obviously but the point is simple. Getting money is what is needed in fundraising but building the relationship should be the higher goal if you hope to be a long term success. If you have questions, email me and let’s talk! i.e. build a relationship.

Lastly, the generation of today is not willing to work long hours for low pay. Can you blame them? In the survey I mentioned earlier in part one of this series it said 70% of those surveyed do not see themselves as the executive director, and in that same study it went on to say that 45% don’t even see working in the nonprofit sector.

One of the biggest complaints most nonprofit executives have is the constant pressure of fundraising and lack of support from the board in doing their job. It is not easy and it is lonely at times. Passion carries someone only so far. I think the reality is that until pay checks rise across the sector I don’t see this problem getting much better in the near future and fewer people will want to subject themselves to taking a job that has this type of pressure without some additional personal payoff.

DISCLAIMER: This information is not intended to provide legal or accounting advice, or to address specific situations. Please consult with your legal or tax advisor to supplement and verify what you learn here.