Australian nonprofits account for nearly 4% of the country’s GDP, and their staffing makes up around 10% of the national workforce, which means that in addition to all the services that they provide to the populace, the not-for-profits sector is a key contributor to the national economy. Despite their importance in the daily lives of many Australians, modern nonprofits face significant obstacles that threaten their missions and the ability to continue the good work that they accomplished. The following brief overview highlights some of the challenges faced by charities and other NFPs today.

Measuring and Reporting Performance in Terms of Outcomes

Today, there is an increased focus on producing value in exchange for funding. Individuals and businesses, as well as governmental bodies, all have higher expectations of the organisations that they support. To increase support, and secure adequate funding, nonprofits must learn how to use analytics to accurately measure their performance, as well as learn how to improve their reporting so that numbers, statistics and other data are explained in terms of the impact created by the grant, gift or other donation.

Learning how to measure and express impact is often not an easy, straightforward process. Many larger nonprofits turn to outside consultants and others with expertise in this area to help them produce more informed, relevant reports. Small to mid-sized organisations, however, often don’t have staff with the necessary knowledge to accomplish this task in-house. They also typically lack the funding needed to seek outside assistance. NFPs that fail to illustrate their impact not only face a potential loss of funding but they also face the threat of falling membership rolls when they fail to prove their value and worth.

The Push to Upgrade

As part of the push to increase the value that they offer their stakeholders, nonprofits today are also pressured to invest in technology, and new types of hardware and software to improve their efficiency and effectiveness. Outdated software and systems decrease the accuracy of reporting, make it harder to harness the benefits of social media and mobile platforms to improve messaging and fundraising. They also slow down the process of recording, tracking and analysing data. Older, outdated systems also increase the risk of loss due to theft or destructive events. Upgrading gives greater flexibility and accuracy and drives improvements in performance and effectiveness. While financially struggling NFPs often focus on the direct, upfront cost of the upgrade they shouldn’t be “pennywise, but pound-foolish,” and overlook the immediate and indirect savings that are gained from upgrading.

Recruiting and Development of Staff and Volunteers

Being able to recruit, train and retain talented people to serve is a challenge for nonprofits, whether they are seeking paid staff members, volunteer board members, or other unpaid volunteers due to rising employment and the tight budgets many nonprofits rely upon. NFPs that try to fulfil their mission must find ways to raise the funds necessary to recruit and develop the right people or face the risk of reducing programs, and outreach, to their communities.

What about your nonprofit? What’s the biggest challenge that your NFP faces today? Why not share your struggle in the comments section below?