Nonprofits and Depleted Funding: The Challenge of Limited Resources
Updated: Apr 21
The purpose of nonprofits is to help the public. A need is identified, and good people work to fulfill that need. The main challenges many charities face are workload, funding, and demand.
Many people may not realize how much work goes into a nonprofit so it can run smoothly and efficiently. There are different laws and regulations surrounding nonprofits. However, a nonprofit is a business. They require money to stay afloat through donations or government assistance.
Keeping up with a challenging workload isn’t the only test that nonprofits face. Charities must constantly acquire volunteers to ensure they do not fall behind on their goals. Among other tasks, charities deal with operational, administrative, and developmental expenses. Operational costs include utility bills, rent payments, and office supplies. Administrative charges include bookkeeping and accounting, insurance policies, and board meetings. Developmental fees include marketing the charity needs to get the word out to new donors and those who need the nonprofit’s services.
Marketing is often one of the most difficult challenges facing nonprofits. Those who build nonprofits may think it’s obvious what they are all about, and people will come to help. However, due to the mistrust charities have faced in recent years, it has become increasingly difficult for nonprofits to get the word out about their objectives and instill trust in the public.
Even if a nonprofit has been around a while and has built a reliable reputation, the organization may not get enough donors, which could be due to not reaching its target audience. Yes, nonprofits will usually accept donations wherever they come from, but marketing and using the right platform come into play when seeking donors and those in need.
For example, the goal of Student LunchBox is to provide food to college students facing food insecurity. Many of SLB’s donors include local business partnerships, so it’s best to focus on getting the word out to the local community. Although SLB is location-based, financial donors can come from anywhere. There could be someone sympathetic to the cause who lives across the country. Social media and a consistent engagement schedule can help nonprofits increase visibility, regardless of their goal or target audience.
When securing donors, nonprofits should remember that money is extremely important to individuals. What people spend their money on - is personal. Nonprofits who share their story and appeal to donors are more likely to receive donations. Benefactors want to feel like they are a part of something and that their money is going to a good cause.
Primarily due to the COVID-19 pandemic, charities face more demand than ever. Many people are confronting economic hardships for the first time and are turning to nonprofits for relief. College students are especially vulnerable. The pandemic made finding suitable food and maintaining a healthy study schedule challenging.
SLB is no different from other nonprofits when it comes to limited resources. As previously mentioned, people tend to donate to causes they feel they are a part of. Nonprofits who share their story about why they got started can help secure generous supporters and people in need of the charity’s services. Food-insecure college students want to know where their food is coming from and be sure they can trust the people providing it.
In recent years, trust has also become an issue facing nonprofits. Due to the dishonesty of some so-called “charities,” many people have lost faith in all nonprofits. The misconduct of a few has become the perception many people have toward charities. Because of this, the public has demanded transparency. To increase visibility, nonprofits have strived to be more open about spending their funds, so recent developments encourage nonprofits to share their annual reports on organizations’ websites.
This copy was prepared by Allison Norberg, a volunteer at Student Lunchbox, a nonprofit organization dedicated to fighting food insecurity among college students.