Being strategic for a nonprofit board often includes thinking about growth. A recent benchmarking survey by the BDO Institute for Nonprofit Excellence (sorry, don't know who this is) found that "nearly 50% of nonprofits are planning to grow over the next two years. BUT, hold-on, they may not be so ready. According to the survey:
- 51% of the nonprofits have "less than 6-months of operating revenues" - meaning they won't have much cash in case of unplanned shortages of income.
- 1 in 5 have not funded their infrastructure (new tech, employee training, fundraising) and spending 90-99% of their income on program - good for program but not good for growth
- 3 in 5 nonprofits say rising overhead costs is a moderate-to-high level challenges and pressure to minimize overhead costs is likely driving high-program-related spending at the expense of investment in infrastructure
- Nearly half (46%) say declining revenue or funding is a high-to-moderate level challenge while more than 1/3 say maintaining adequate liquidity poses no challenge and 40% rank it as a low level challenge.
- 4 in 5 say a merger is not likely
- 59% see recruiting and retaining staff as a challenge
So, how does an organization grow when it can't take care of the basics?