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The 2024 State of Nonprofits: Addressing Burnout, Financial Stability, and Evolving Funder Practices

The Center for Effective Philanthropy's (CEP) has released their "State of Nonprofits 2024" report, which provides a comprehensive overview of the current landscape for nonprofits in the United States. 


The report highlights three key findings: ongoing concerns about burnout among nonprofit leaders and staff, financial stability within the sector, and funders maintaining or enhancing their supportive practices. 


In this post, we’ll delve into each of these findings, while incorporating some of our own insights in order to offer actionable strategies for nonprofit leaders.


Ongoing Concern About Burnout

The CEP report underscores that burnout remains a significant concern for nonprofit leaders and their staff. Nearly all leaders surveyed expressed some level of concern about burnout, with more than a third reporting that staff burnout has been a major issue over the past year. This persistent stress is compounded by staffing difficulties, inadequate compensation, and high turnover rates.


One leader poignantly stated, “We aren’t able to pay our staff a livable wage, [which is] the exact goal we are aiming to reach for the clients we serve.” This situation leads to higher turnover and larger caseloads, exacerbating burnout. Another leader highlighted the multifaceted challenges they face: “As the executive director [ED], I am the only C-level executive within the organization. Maintaining the budgetary discipline we need... can be demanding when added to all of my other duties — human resources, IT infrastructure, programmatic work, etc.”

The good news is that there are some practical strategies to mitigate the impact of burnout (See 4 Tips for Reducing Burnout for more info).


Make a Plan: Developing and implementing a transition plan can significantly reduce the chaos when key team members leave. This plan should include detailed documentation of roles and responsibilities, cross-training employees, and maintaining continuity of information.


  1. Focus on Retention: Prevention is the best strategy against turnover. Hiring individuals who align with the organization’s mission, providing ongoing training, and supporting employees’ work-life balance are crucial steps.

  2. Invest in Talent: Contrary to the belief that cutting overhead increases resources for programs, investing in employees enhances organizational effectiveness. Well-trained and mission-aligned staff members are more engaged and productive.

  3. Empower Staff with the Right Technology: Utilizing technology designed for social-good providers can streamline tasks, enhance internal communication, and simplify reporting. This reduces the learning curve for new staff and ensures continuity during transitions, thereby alleviating some of the pressures that lead to burnout.


Consistent Finances at Most Nonprofits

The financial stability of nonprofits is another critical area explored in the CEP report. Despite the challenges of the past few years, most nonprofits have maintained financial stability, with many reporting either a balanced budget or a surplus. Leaders who faced budget deficits primarily plan to address them through increased fundraising efforts.


According to the CEP report, “For nonprofit leaders who either experienced a budget deficit in the last fiscal year or anticipate a deficit in the current fiscal year, fundraising is the most common method by which they are planning to address the deficit.”


We’re no strangers to “Mission-Focused Fundraising.” Here are a few ways you can get started: 

  • Align Missions: The best way to increase fundraising is to convince funders that your mission helps them achieve their mission. This alignment is crucial for attracting support from funders who share your goals.

  • Set Measurable Goals: Mission-focused goals must be measurable. It’s not enough to believe your programs are creating an impact; you need to prove it. Data-driven goals with key indicators and metrics are essential for defining and quantifying success.

  • Prove Impact: To attract funding, nonprofits must be able to demonstrate their impact. This involves rigorous data collection and impact reporting, which showcases the effectiveness and reach of their programs.


Funders Staying the Course

The CEP report reveals that many funders are maintaining or making new commitments to improve their grantmaking practices. This includes reducing funding restrictions, streamlining processes, and providing more flexible and sustained support. These changes reflect a growing trend towards more trust-based philanthropy and a recognition of the need for operational flexibility among grantees.


One example of this evolving support system is the Siemer Institute, which uses impact measurement technology to streamline grant reporting and provide increased support for over 300 grantees. This approach not only simplifies the reporting process but also helps grantees demonstrate their impact more effectively.


As funders continue to adapt their practices, the use of technology to streamline processes and enhance transparency becomes increasingly important. Nonprofits can benefit from adopting similar technologies to improve their efficiency and reporting capabilities.


Conclusion

The "State of Nonprofits 2024" report by the Center for Effective Philanthropy paints a picture of a sector grappling with burnout, maintaining financial stability, and navigating evolving funder practices. To address these challenges, nonprofit leaders need data collection and reporting technology that increases employee efficiency, reduces burnout, helps raise more funds, and streamlines grant reporting.


SureImpact, a purpose-built impact management platform, is designed for social-good providers by social-good providers. It offers the data collection, impact reporting, and analytics infrastructure needed to build a culture of continuous improvement and maximize social impact. With SureImpact’s tools, nonprofits can manage, measure, and communicate their impact more effectively, supporting a high-performing and resilient organizational culture.

In conclusion, as the nonprofit sector continues to evolve, leveraging technology and aligning organizational practices with funder expectations will be crucial for sustaining impact and driving social change. By focusing on reducing burnout, maintaining financial stability, and embracing supportive funder practices, nonprofits can navigate the complexities of the current landscape and emerge stronger.


Join us on June 19 at 1:00 p.m. ET for our webinar “How to Become a High-Impact Leader by Cultivating a Pioneering Mindset.”


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