Nonprofits are teetering on the edge. Chronic underfunding and underinvestment in capacity building have stunted growth and put effectiveness at risk. While organizations consume more capacity than they have, the demand for their services continues to surge. Additionally, disruptive events have impacted donor behavior, causing global giving to decline. To survive, nonprofits need to strengthen resource development capacities.

Many, however, think these efforts are costly, complicated, and disruptive. The model below highlights the foundations and steps for capacity-building success.

Leadership, culture, and communication are the foundations for success in capacity building. Excellent leaders know their organization, accurately analyze trends, and anticipate future needs. Using these insights, they determine which initiatives can deliver the greatest impact, enabling them to make cost-efficient decisions. 

Since capacity building involves effecting change, it is critical that leaders manage potential disruptions and encourage cooperation. One way is to model the desired new behavior. When leaders act consistently with the reforms, they promote and sustain the change. 

An organization’s culture also plays a role. It can either be a catalyst or an obstacle. Make sure that the organization’s culture is ready. By helping people understand that change is the norm, not the exception, leaders become instrumental in developing a culture…

Since the pandemic's onset, the nonprofit sector has faced a significant struggle with the inability to find, recruit, hire, and retain talent. The problem isn't isolated to the nonprofit sector but has felt the most significant impact. The problem facing nonprofits, though, unlike for-profit or government sector industries, is when nonprofits that focus on human services (medical and mental health, shelter, food, etc.) experience labor shortages, the nonprofit frequently must reduce services to their communities. Worse, some organizations find that they must cease operation altogether - thereby starving their communities of desperately needed services. 

This is NOT a temporary problem. 

Our labor shortage may feel that it came as a result of the pandemic, but it didn't really. That is not to ignore the statistics showing an astonishing 97 million workers left their jobs in 2021 and 2022. No, the problem has been brewing for years - the primary culprit for the current and future labor shortage is the aging baby boomer generation. The math is simple: More workers are exiting the labor force than new entries into it. The result? The U.S. Department of Labor says we should anticipate a continually shrinking labor force into 2030! Ugh.

Remember the laws of Supply and Demand? 

When labor is in short supply, the cost of that labor increases. This law is…

Trust is falling in the United States. Since the 1970s, survey responses from the Gallup Poll, NORC’s General Social Survey (GSS), and the Harris Poll have recorded falling trust in both political institutions such as congress and the presidency, and nonpolitical institutions such as medicine and the press. The American nonprofit sector is not immune. An Independent Sector report revealed an 11 percent downfall in the public’s trust in the nonprofit sector.

This issue is somewhat unique to the U.S. nonprofit sector. A study assessing 31 countries actually identified a “small increase in global trust in the nonprofit sector,” from 2011 to 2019.

The stakes are high for U.S. nonprofits. Moral disillusionment theory asserts that nonprofit organizations are held to higher standards than for-profit organizations due to reputations of integrity. Thus, transgressions committed by nonprofits hold more weight. When organizations lose trust, they struggle to maximize impact. For example, the nonprofit starvation cycle, an epidemic of lackluster administrative spending within nonprofits limiting their ability to scale, is rooted in shaky donor trust.

A grim trust landscape in the U.S. begs the question: What can nonprofit professionals do to protect their organizations?

Trustworthy language

The “Four Ps of Credible Communication,” highlighted in “The Language of Trust: Selling Ideas in a World of Skeptics,” provide guidelines for…

Volunteering is the heartbeat of community involvement, yet many nonprofits struggle with the challenge of maintaining a committed volunteer workforce. Understanding the complexities of volunteer engagement, exploration of the use of strategic and innovative leadership approaches can amplify lasting organizational impacts.

The largest decline in formal U.S. volunteer rates since 2002 occurred between 2019-2021, according to AmeriCorps and U.S. Census Bureau. A downward trend has created a serious strategic human resource management deficiency and reduced service capacities for many nonprofits. Economic downturns, like that of COVID-19, have shined a light upon the federal government’s reliance on the nonprofit sector. Given their inability to fund or facilitate all vital community support services, many nonprofits rely heavily on dedicated volunteers to carry out their mission. The importance of engaging the right volunteers also sets the tone for strategic development in mission pursuit.

One size does NOT fit all

By discarding the notion of cookie-cutter design strategies, we make room for flexible approaches that are tailor-made for success. Forming long-term volunteer relationships includes working through complex layers. It begins in identifying the…

The complex social issues nonprofits attempt to solve require a diversity of solutions. Funding those solutions will happen as nonprofits embrace the democratization of philanthropy. Philanthropy in the United States is intrinsic to democracy and freedom as it allows citizens to support organizations which form a civil society separate from government. Names like Rockefeller and Carnegie evoke the plutocratic era of philanthropy during the turn of the century. Plutocratic philanthropy exists today through names such as Bezos, Scott, and Gates but the vehicles used to democratize philanthropy are changing the giving landscape. The increase of giving through donor-advised funds (DAFs), crowdfunding, and point-of-sale fundraising allows philanthropy to expand beyond the ivory tower of traditional wealth. People with varied economic backgrounds united by the love (philos) of humanity (anthropos) are now invited to the philanthropic table through these new methods of giving.

It is essential that nonprofit leaders understand these increasingly popular methods of giving to strategically integrate these methods into their development plans. By understanding the donor landscape and the surge to democratize philanthropy, nonprofit leaders can implement practices to expand their donor base. Donor populations are shifting, and astute nonprofit leaders know that millennials now outnumber baby boomer donors. Nonprofit leaders must adapt their…