Nonprofits Spending Bare Minimum on Infrastructure, Report Finds
In a recent fundraising study conducted by Common Impact, 79 percent of nonprofits surveyed reported spending 2 percent or less of their operating budgets to support key infrastructure.
Common Impact, a nonprofit organization that connects professionals from global companies to local nonprofits, surveyed more than 185 nonprofit organizations, interviewed social-sector experts, reviewed existing literature and analyzed its own outcomes data for the study. This study was the second in a series of three reports identifying common capacity constraints in the nonprofit sector.
Compared to 2007, when the first study in the series was conducted, Common Impact found the following:
- Functional challenges have shifted from technology and marketing/branding as the top two challenges to operations/efficiency and marketing/branding in 2009.
- Functional expertise remains a key challenge for nonprofits.
- More nonprofits are spending the bare minimum on infrastructure.
Other key findings from the study include:
- Strained budgets leave little room for back-office investment — 48 percent of respondents reported they struggle with funding core programs, making nonprogram infrastructure investments difficult to justify to donors, boards and institutional contributors, and 38 percent said that a lack of infrastructure to support service delivery was the top programmatic challenge.
- Volunteers represent half of nonprofit human capital — 50 percent of all human capital comes from volunteers, but 24 percent of nonprofits have no one in charge of managing volunteers. Making matters worse, one in three volunteers drops out of service each year.
- Human resource management sets some apart — High-potential nonprofits manage human resources differently, according to the study, investing more and approaching the management of internal resources with greater rigor. When asked if their organizations invest enough in HR to meet their missions, 67 percent of high-potential organizations said yes, while only 38 percent of overall respondents said yes.
To download the entire study, click here.