Under the Microscope: A Closer Look at Nonprofit Challenges

Imagine yourself in a job interview. You really want the job, you think you are well-qualified, and you have a good feeling about this one. Things are going well until the interviewer asks the dreaded interview question, “What are your weaknesses?”

What do you say? You want to make the best impression possible because you want the job. Do you share a real weakness? Do you say “I have a lot of trouble being under time pressure and meeting deadlines,” or “I don’t like to be told what to do”?

Or do you go with the more common answers that dodge the question and cast you in a more positive light: “I tend to care too much about my work,” or “I’m a perfectionist. If anything, I work too hard”?

It’s not difficult to imagine this same dynamic—this desire to present your best self—playing out in how nonprofits work with foundations. A nonprofit organization applying for funding might not want to be open with a foundation about its difficulties. How many nonprofit leaders would willingly offer up concerns such as “My leadership skills need some work,” or “We’re way behind the times when it comes to technology”?

Perhaps this is why our most recent research on nonprofit leaders, Nonprofit Challenges: What Foundations Can Do, shows that only 52 percent of nonprofits believe that their foundation funders are aware of the challenges their organizations are facing. Our data also shows that the more open nonprofits feel they can be with their funders about their challenges, the more aware their funders are of their challenges—no surprise there.

But the power dynamics between nonprofits and foundations don’t exactly foster openness. As one nonprofit leader said, foundations could “initiate conversations about [our] overall organizational health and ask about our challenges—not in grant applications, where we feel a need to gloss over problems, but during the course of our relationship.” Foundations may not be doing enough to ask about nonprofits’ challenges, either. In fact, our past research indicates they do not.

Nonprofit Challenges also sheds light on the untapped resources that nonprofit leaders believe foundations are sitting on. Less than one third of nonprofit leaders who responded to our survey believe that their foundation funders use the various resources they have at their disposal to help nonprofits with their challenges. And only 36 percent think funders share with them the knowledge they have about what other nonprofits are doing to address similar challenges. These findings are not about nonprofits asking for bigger grants—they are about nonprofits wanting foundations to think more holistically about the resources at their disposal.

So what are the greatest challenges facing nonprofits for which they would like more foundation help? According to the nonprofit leaders who responded to our survey, they are:

  • meeting the demand for their programs and services;
  • using technology to improve their effectiveness;
  • and developing their leadership skills.

Nonprofit leaders would also appreciate more help from foundation funders when it comes to maintaining, or growing, their earned revenue streams.

These challenges don’t come as a surprise. Much has been written about nonprofits’ struggles with these particular challenges, and for years; we’ve cited much of the literature in this paper. What is concerning from this new data is how little has changed over the years, and the degree to which these challenges persist. This is especially noteworthy in light of the fact that nonprofit leaders are not looking for foundations to help with all of their challenges. But, there are a handful of challenges where they believe more foundation help could be beneficial.

What would it take to help nonprofits—to change the status quo on these issues? Change can only happen if nonprofits and foundations have more open communication about what nonprofits are truly struggling with and if foundations are willing to recognize—and do more to help them meet—those challenges.

Note: Respondents to this research were members of CEP’s 2012 The Grantee Voice: Feedback for Foundations initiative. In total, almost 300 nonprofit leaders comprised this panel; 121 responded to our survey about nonprofit challenges. Other publications from The Grantee Voice include: Room For Improvement: Foundations’ Support of Nonprofit Performance Assessment (September 2012) and Foundation Transparency: What Nonprofits Want (May 2013).


Ellie Buteau is Vice President of Research at the Center for Effective Philanthropy. You can find her on Twitter @EButeau_CEP.

Grantee Voice, nonprofit sector, research, role of philanthropy
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