Survey: Top seven challenges of nonprofit organizations in 2018

Update: Wipfli has released the Nonprofit Priorities Benchmark 2020 Report, covering what nonprofit leaders see as the top nonprofit challenges they face in 2020. Download your copy today.

Nonprofit financial leaders have a lot on their plate. From shifting tax codes to changing regulations to the increased competition for donors and volunteers, leading a nonprofit is no easy task. But overcoming the both uncommon and common problems faced by nonprofit organizations makes success that much more rewarding.

Knowing this, even if your mission and your path to achieve it is unique, you likely face the same nonprofit challenges as other organizations — both internally and externally.

Priorities and challenges for nonprofits

In December 2017, Wipfli LLP — a top 20 accounting firm and leader in consulting, technology, and advisory services — surveyed over 350 financial professionals at nonprofit organizations to see where they stood and where they hoped to be.

The resulting report, 2018 Outlook Survey Report for Nonprofits, identifies what nonprofits believe are the key aspects necessary for growth and operational efficiency. Among the issues discussed include:

• The number one challenge for nonprofits in 2018
• The top financial priorities
• Top financial challenges for nonprofits
• Accounting system of choice
• Organization size, tax status and employment numbers
• Respondent demographics
• Top takeaways and initiatives for nonprofit leaders

As we highlight some of the key takeaways from the study, we invite you to download the entire report here.

Seven top challenges nonprofits face in 2018

From regulations to revenues, staffing challenges to member recruitment, nonprofits face a multitude of challenges as they look to progress through 2018 and into the future. Out of the twelve “top challenges” listed, nonprofit leaders were most concerned about these seven:

1. Government regulations and tax reform

A common concern — both inside and outside of the nonprofit world — is the impact of changing regulations and tax reform. From the paper-cutting maneuvers by the Trump Administration to the largest change in tax code in more than three decades, nonprofits are working diligently to adapt, but face challenges doing so, with 18.8% listing “Government Regulations” as their top challenge.

Among the biggest questions:

• Will the increase of the standard deduction reduce the likelihood that individuals donate, or will it help the economy enough to increase donations?
• With changes in regulation and legislation, will we be able to bill for services and receive the same funding as we used to?

2, 3, 6: Organization growth, revenue, funding and fundraising concerns

As mentioned above, changing regulations also have an impact on the way nonprofits compete, generate revenue and operate. The biggest challenges in fundraising are always a concern for nonprofits, with increasing competition for donor and member money creating perpetual risk and opportunity. 

Coming in at 2, 3 and 6, Growth/Generating Revenue, Funding/Donors and Fundraising were the top concerns for 16.7%, 11.3% and 7.5% of nonprofits respectively.

4: Staffing and volunteer challenges

8.5% of nonprofits saw staffing and volunteer recruitment challenges atop their list of concerns for 2018. With high employment numbers, rising wages and increasing time at the office, finding people to work and volunteer could pose a challenge in the coming months and years.

5: Technology and Software Concerns

Also among the perpetual challenges for nonprofit organizations, issues pertaining to manual, paper-based processes and outdated software fall in at number five on the list of top challenges of nonprofits, with 7.5% of respondents seeing is as their top challenge.

Again, this issue is one of those that creates a ripple effect — ineffective software reduces the reliability of reporting, harming the overall transparency of a nonprofit, creating additional challenges in growth, funding, and fundraising. 

With outcome metrics one of the many ways nonprofits can improve communications, the right technology can also create a positive effect. Better communication means more donations, while automation means less reliance on labor. In turn, this leads to faster, less painful growth.

7: Membership and recruitment

A unique challenge for membership organizations and associations, recruiting new members and retaining existing ones can be a challenge, and it is a top challenge for 7.5% of respondents. Again relating to technology and other factors on the list, membership organizations need to prove their value to members and prospects if they want to succeed.

Get the nonprofit challenges guide

The entire 2018 Outlook Survey Report for Nonprofits discusses these challenges in much more depth, as well as some of the opportunities for nonprofit organizations, charity and membership organizations to thrive as they progress through 2018 and forge into the coming years. We welcome you to contact us to learn more about our services for nonprofits.