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State of Nonprofits 2023:
What Funders Need to Know

A Report of CEP's Nonprofit Voice Project

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Overview

Nonprofits across the United States played a vital role during a period of crisis that began in March 2020 with the COVID-19 pandemic and was followed by a nationwide racial justice reckoning that summer. As nonprofits experienced heightened demand coupled with marked uncertainty about revenues, they responded with resiliency and imagination, while many funders also stepped up, increasing philanthropic giving in a time of urgent need. Following this intense period of trial and turmoil, we wanted to take stock of current nonprofit perspectives and understand their evolving experiences with funders.

Our research aims to explore:

The state of nonprofit relationships with both foundations and individual donors.

How nonprofits are perceiving current challenges.

Nonprofit organizations' recent and projected financial results.

We surveyed:

0

nonprofit leaders

0

responded

representing a 57 percent response rate

1 / 7
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Finding 1

Increased Trust

Many nonprofit leaders report an increase in trust from funders and are experiencing changed practices, such as streamlined applications and reporting, removal of restrictions, and receipt of multiyear funding from foundations. In addition, most nonprofits report an increase in dollar amounts given by at least some individual donors.

What, if any, shifts in foundation practice did nonprofit leaders experience in the last year?

53%

of nonprofit leaders who responded to our survey reported experiencing an increase in trust from their funders in the last year.

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Percentage of Nonprofit Leaders Experiencing Changes in Foundation Funder Practices
(N = 282)

What, if any, shifts in individual donor practice did nonprofit leaders experience in the last year?

67%

of respondents reported an increase in the size of monetary contributions received from at least some of their individual donors.

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"The change that has been most helpful is to have true general operating support so we can be flexible as conditions rapidly change."

– Nonprofit leader

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Finding 2

Nonprofit Staffing Challenges

Issues related to staff—including burnout, filling staff positions, and retaining staff—are the top challenge facing nonprofit leaders.

Almost half of nonprofit leaders said staff-related issues were the biggest challenge facing their organization. These issues included managing staff capacity and avoiding burnout, hiring and staffing, retaining staff, paying equitably, and raising salaries.

49%

of nonprofit leaders who responded identified challenges related to staff as one of the biggest challenges their organization is facing.

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Almost all nonprofit leaders surveyed indicated concern about burnout, with more than one third of them stating it was “very much” a concern—the highest level of concern referenced in the question.

Staffing Challenges Nonprofit Leaders Are Facing
(N = 133)

75%

of respondents indicated difficulty filling staffing positions in the last year.

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"We have a solid culture and team, but burnout is real…our challenge is balancing the health and well-being [of] our team and the organization."

– Nonprofit leader

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Finding 3

A Hopeful Outlook

Despite a challenging economic context characterized by high inflation, most nonprofits experienced either a balanced budget or surplus in the most recently completed fiscal year, and the majority anticipate at least breaking even or having a surplus this fiscal year.

More than half of nonprofits experienced a budget surplus in the most recent fiscal year, while less than one fourth had a deficit.

Percentage of Leaders Who Identified the Following Contributors to Last Year’s Financial Picture

More than two thirds of leaders are anticipating either a balanced budget or surplus in the current fiscal year.

One fourth are projecting a deficit, anticipating high costs and lower than expected contributions from both foundations and individual donors.

Percentage of Leaders Who Identified the Following Contributors to This Year’s Financial Picture

"Rising costs of everything from labor to printing to travel have made budgeting and cash-flow management much more difficult…"

– Nonprofit leader

State of Nonprofits 2023:
What Funders Need to Know

A Nonprofit Voice Project Report

Many nonprofits are experiencing more trust from their funders and changed practices related to funding type as well as processes, indicating that many of the shifts in funder practices that began in 2020 have continued. Even as nonprofit leaders experience these shifts in practice, however, they name their top challenge as a series of interconnected issues related to burnout and hiring and retaining staff. Finally, despite specific worries about the economic context and inflation, the finances of the organizations represented on our panel are generally strong. However, the context in which nonprofits are operating remains uncertain.

In the future, we will continue to explore these and other key issues and challenges facing nonprofit leaders.

If this report has been helpful to you – and you’re interested in hearing more from nonprofit leaders –
please consider making a grant to support CEP’s Nonprofit Voice Project. Reach out to us for more information. Thank you.

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Webinar Video

Recorded: Tuesday, July 11th, 2023; 2-3:15pm ET

State of Nonprofits 2023:
What Funders Need to Know

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Research Funded By

Authors
Phil Buchanan, Lauren Broder, Ph.D., and Christina Im
Copies of the survey instruments can be found here.

 

This work is licensed under the Creative Commons BY-NC-ND license.

© 2023. The Center for Effective Philanthropy, Inc. All rights reserved.

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