New Study Reveals How Nonprofits Are Faring in 2023
Media contact: Chloe Heskett, Editor & Writer, Programming and External Relations | chloeh@cep.org
Cambridge, MA – Nonprofits across the U.S. report that they are experiencing an increase in trust from funders and positive changes in funder practice, while simultaneously noting that they are facing high levels of burnout in their staff and difficulty filling staff positions and retaining staff. Finally, nonprofits report a more positive financial outlook than many feared given the recent challenging economic context.
This new insight into how nonprofits are faring in 2023 comes from results of a nationally representative survey of nonprofit leaders conducted by the Center for Effective Philanthropy (CEP), with responses gathered from 284 organizations. The results of this survey are released today in a new report, State of Nonprofits 2023: What Funders Need to Know.
Since 2020, nonprofits have experienced — and continue to grapple with — a period of exceptional difficulty, with colliding crises stemming from the COVID-19 pandemic and an ongoing racial justice reckoning as well as economic uncertainty. Given this context, the aim of this study was to explore the state of nonprofit relationships with both foundation and individual donors, to understand how nonprofits are perceiving current challenges, and to gain a snapshot of the current financial well-being of nonprofits.
CEP’s new report reveals that more than half of nonprofit leaders perceived an increase in trust during the past year from their funders, and that in addition to this experience of increased trust, they have seen shifts in related funder practices, including easier application processes, reduced reporting requirements, fewer grant restrictions, an increase in multiyear support, and improved or new nonmonetary support.
The survey also revealed, however, that issues related to staff are the top challenge facing nonprofit leaders. In addition to nearly all nonprofit leaders surveyed indicating concern about burnout, three quarters of leaders also reported difficulty filling staff positions in the past year.
Finally, despite the challenging economic context, characterized in particular by high inflation, most nonprofits experienced either a balanced budget or surplus in the most recently completed fiscal year, and most expect to break even or have a surplus in the current fiscal year. Nonprofit leaders do report, however, struggling with rising costs.
In the wake of 2020, it appears that many nonprofits are indeed experiencing an increase in trust and a shift in funder practices, corroborating other CEP research based on self-reporting by foundations. However, staff burnout remains a top concern and, though the finances of organizations surveyed are generally strong, nonprofits continue to operate in a shifting and uncertain context. For more insight into the state of nonprofits in 2023, read the report.
This new report is part of CEP’s ongoing Nonprofit Voice Project. In the future, we will continue to explore these and other key issues and challenges facing nonprofits.
About The Center for Effective Philanthropy
The Center for Effective Philanthropy (CEP) is a nonprofit organization with a mission to provide data, feedback, programs, and insights to help individual and institutional donors improve their effectiveness. We do this work because we believe effective donors, working collaboratively and thoughtfully, can profoundly contribute to creating a better and more just world. For more information on CEP’s work, including its research, assessments, advisory services, and programming, visit www.cep.org.