We have spent an intense year helping our nonprofit clients through a wide variety of threats and risks. During that time, we have seen and heard many repetitive concerns and worries expressed across a wide variety of organizations. Rather than siloing this information, we wanted to start a conversation around sharing best practices and approaches to what appears to be a completely new universe for clients in the nonprofit space.

What is the Work of our Nonprofit Clients?

For context, our firm represents quite a wide variety of organizations and types. This has allowed us to see the micro problems up close and personal in our work, but also to draw some macro conclusions that may be helpful moving forward.

On the small side, our clients include local mom-and-pop-style service provider nonprofits that largely are driven by a single founder and maybe a handful of volunteers.

On the large side, we represent national associations that have long-standing brands that are significant entities, have numerous employees, and whose name you would recognize.

In terms of their work, the range of size and maturity is reflected in the governance style. Some are nonprofits that have true working boards with the directors essentially doing “the work” of the organization. The clients using a policy board model are more common. Some are more of a hybrid. Others are more based around fundraising with quite limited governance.

The work of our nonprofits varies wildly. They include housing and homelessness; senior support services; medical issues; technology and cybersecurity issues; business associations; sports clubs and leagues; private schools (primary, secondary, and higher ed); advocacy; veterans issues; civic education; the arts; environmental issues; and many others.

 What are the Categories of Repetitive Risk Issues We are Seeing?

In board terms, we are seeing across the board repetitive issues and risks crop up for a significant percentage of our clients. Broadly stated, here are the categories:

1.           Funding and Economics.

Nonprofits are often faced with economic and funding challenges. These risks have been greatly exacerbated by current events to the level that they are placing the entire sector in tremendous peril.

Both governmental and private funding are in flux and at risk. Adding to that, many nonprofits face the double whammy of explosively growing demand at the same time funding sources are drying up or completely evaporating.

2.           Staffing and Talent Acquisition, Retention, Burnout, and Brain Drain

Nonprofits face the inherent challenge of hiring and retaining great staff due to the challenges of matching private sector salaries. Many employees are burned out by the challenges of the work and the constant economic crisis mode presented in their operations. Finally, the entire sector has seen a generation and leadership retire, leaving a lot of history and knowledge that just leaked away in many cases.

3.           Explosive Growth in Demand for Services

Many of our service-based nonprofits have seen huge increases in the demand for their services. A choppy economy and worse employment in many areas translates to more people needing medical, housing, and food assistance help in particular. Disaster response, especially when the federal government appears to have become politically selective in its approach to disaster response resource allocation, is another area of stress.

4.           The Overall Economic Context

Many of our clients face higher inflation and costs at the same time that economic support is becoming less predictable or weakening.

5.           Security and Operational Risks

For years, we have been receiving inquiries from fake clients attempting to defraud our law firm. The same happens with nonprofits. Having less financial resources means that providing proper cyber training and investing in the latest and greatest security is a pretty tall order financially.

6.           Political Risk

Last, but far from least on this list, is the current political climate. This issue threads through funding and compliance. This issue threads through potential existential branding and mission risk. You would be amazed at how much time we have spent attempting to decipher the dictates of the current federal regime and minimizing their downstream impacts on the organizations we represent.

Conclusion

We are envisioning this as a multi-part series digging into the topics above in detail. We invite you to provide comments and feedback, and most of all best practices that you and your organization have used to help survive and thrive during what is quite a challenging time for nonprofits.

For more information or help with nonprofit strategies, training, or legal compliance, please feel free to reach out Timothy Hughes at (703) 526-5582, thughes@beankinney.com or Doug Taylor, at (703) 526-5586, rdougtaylor@beankinney.com. We work with nonprofits throughout Virginia, Maryland, and D.C.

This article is for informational purposes only and does not contain or convey legal advice. Consult an attorney. Any views or opinions expressed herein are those of the author and are not necessarily the views of the firm or any client of the firm.