Section 1: Growth and challenges
In our 2018 Nonprofit Finance Study: The dynamics and challenges of growth, we asked nonprofit finance professionals about what “growth” means to them, which the responders mentioned increases in revenue, individuals served and funding. Being sensitive to our 2020-2021 survey participants, we re-framed the question, but indications resulted similarly.
When we asked about increases and decreases from 2020 to 2021, the responses were surprisingly positive. 52% of nonprofit professionals expect to apply for more grants in 2021 and 50% putting focus on finding different ways to generate revenue. Also, 50% expect to serve more clients. Lastly, from this question, we found that 43% expect to have the same budget, with only about 33% seeing an increase in their operating budgets.
When it comes to sustaining financial health and/or growing client programs, we found the majority of organizations have a positive outlook for 2021. About half of respondents expect some level of revenue growth over the next 12-18 months. With 54% expecting to grow either very much or somewhat.
From 2020 and going into 2021, we wanted to understand what funding sources had been impacted and what demands for services changed.
All challenges tested were important to at least 70% of respondents heading into 2021. At the top of the list of importance were meeting demand for program and services, identifying new funding and revenue sources, and increasing unrestricted funds/revenue. Unique challenges for 2020 as well as ongoing challenges in revenue, mission, and providing services.
Another question we asked related to actions taken in 2020 and actions going to take in 2021. In 2020, nonprofit financial professionals worked from home, 91% reported, applied for government loans, and expect to increase their funding sources through innovative fundraising and marketing tactics.
