Nonprofits face similar challenges with new solutions in 2014

February 4, 2014

Nonprofits face similar challenges with new solutions in 2014

The success of nonprofits in 2014 will depend on how well they conform to new trends in the industry, most of which continue to increase funding while lowering the cost of finding donors. One example of this, according to the Tallahassee Democrat, will be the continued growth of social media as a philanthropy tool.

The newspaper said that social media currently accounts for only 2.1 percent of charitable giving from private sources. While the platforms usually produce donations that are smaller in size, they do help keep a nonprofit organization in contact with its audience. However, while the cost of utilizing social media is low, the small return means that organizations cannot shy away from asking for gifts in person.

The importance of in-person fundraising could also be minimized by crowdfunding, which allows some organizations to raise a decent amount of funds by asking a large group of people for small contributions. While crowdfunding provides a new method for raising money, it does not replace the need for personally contacting and engaging specific donors for larger gifts.

Along with increasing funding, nonprofits must lower liabilities
The more money used to run day-to-day operations, the less that is available to help nonprofits reach their service goals. Organizations must take advantage of as many cost effective measures as possible, which often start with strong leadership.

• Engaging more volunteers: Groups should seek philanthropy outside of monetary donations.While a nonprofit's audience many not always have the finances to donate large sums of money, they are often motivated to help in other ways. Finding positions that utilize each volunteer's skills for optimal output is important.
• Saving on unemployment insurance: Organizations should also take advantage of ways to reduce unemployment costs. Opting out of state UI pools can cut the annual costs of meeting the responsibility to unemployment insurance by as much as 50 percent. This is best accomplished by seeking the advice of nonprofit financial services that specialize in UI cost savings.
• Create a savings plan: It is no longer taboo to run a small surplus in the nonprofit industry. The unpredictable economy is making it more difficult than ever to develop accurate budgets that can withstand sudden changes in funding or demand. Stashing away some cash for a rainy day is not bad philanthropy, it's good business.

For information on how your organization can cost-effectively meet its unemployment insurance needs, contact First Nonprofit Companies at FNCUI@firstnonprofit.com or visit www.firstnonprofitcompanies.com.