By Shellie Speer, Senior Vice President, BDI Academy
It’s no secret that today’s economy presents additional challenges for nonprofits – rising inflation and costs of living are making it harder on all of us. But for nonprofits, inflation can be daunting… both to deal with and to talk about. So how do you prepare your nonprofit for inflation, and the potential impact on your fundraising?
The impact of inflation can be felt in every city, in every neighborhood. With the current annual U.S. inflation rate at 6.5%, many families are struggling to make ends meet. Even a slight rise in the costs of day-to-day necessities can be distressing. And a recent study by PYMNTS’ Research found that 61% of U.S. consumers live paycheck to paycheck.
Assess what you’re up against
Organizations that rely on donations to stay above water are often forced to work harder to keep up with the increasing costs of goods and services. And as nonprofits assess and monitor both their budgets and donations, oftentimes the need for their programs and services continues to rise.
Skyrocketing costs are impacting many organizations’ ability to provide help, and for those that offer humanitarian services, such as food, shelter and healthcare, the task seems endless. Many are facing continued unprecedented challenges while trying to serve every man, woman and child who comes through their doors.
Unfortunately, the outlook for 2023 isn’t more encouraging. Nonprofits must make ends meet with less. The rise in cost of living, shortages of goods, less competitive bulk pricing and a downswing in funding all make for continued challenges for the very organizations there to help.
One way to prepare your nonprofit for inflation is by finding additional sources of income, diversifying your funding, and looking for other means to ride out this storm.
Putting a solid plan of action in place will lessen the effects of inflation AND build a more stable donor base for years to come. Relationships will be solidified. Donors will feel gratified. And your organization will find new and innovative ways to increase their offerings and help more than ever before.
Make a plan
- Don’t be afraid to communicate honestly with your donors. As you prepare your nonprofit for inflation, let your supporters know the reality of what your organization is facing:
- Provide examples of how the increased costs are affecting your capacity to serve those in need.
- Share heartfelt stories of men, women and children who are facing hardships but who have found hope and help through your organization.
- Reach out to recurring and major donors. Let them know they are your key contributors and that you rely on them to keep your doors open. Ask them to consider increasing their giving amounts and/or their frequency in giving. Give them the opportunity to be a part of the solution. They have been there for you, and they will continue to be.
- Don’t decrease your current efforts. Eliminating direct mail is not the answer. The immediate cost reduction to your budget does not outweigh the long-term ramifications. Continue to ask for help, continue to be transparent, continue to engage donors at every turn.
- Increase opportunities to volunteer. When a person sets foot inside your organization, they see the need and they want to become part of the solution. For many, sharing their time is the first step to helping financially.
- Increase your network of donors. Ask current major donors and board members to help your organization expand its reach to like-minded individuals and corporations. By widening your circle of friends, doors are opened and opportunities for greater support are found.
- Evaluate the bottom line. Look at your budget. Are there line items that could be procured through relationships with businesses?
- Can a small family hardware store provide all the light bulbs and trash bags your organization uses over the next year?
- Would the local office supply store donate ink, paper and other needed office supplies?
- Would the box store in your city contribute plates, napkins, paper towels and toilet paper?
Finding ways to bring in budgeted items without spending money opens the door for more funding in other areas.
- Consider growing your enterprises. More people than ever need help. Growing your thrift store, your car detailing or sales program, or your catering business could increase your income while building an even greater foundation within the community.
News of rising inflation rates can feel overwhelming for anyone, let alone nonprofit organizations that rely on the generosity of individuals to keep their doors open. But with proper planning, creativity and relationship building, you can help your nonprofit prepare for inflation, and ensure your organization is equipped and empowered to withstand this storm.
BDI helps organizations prepare for and navigate the unique challenges they face with one-on-one consulting and development support through BDI Academy. Learn more about the strategic guidance BDI offers our nonprofit client partners here.