Since the recession over 10 years ago, basic needs in our communities have dramatically increased and nonprofits have been struggling to meet those needs. Subsequently investments in the arts and other non-emergent causes have gone without funding, until the past several years as the economy has improved and philanthropists have refocused on funding these causes. But a consequence of the drastic funding changes of the past decade is that many nonprofits have failed to invest in themselves.
Capacity building, investments in systems and processes, have often been an afterthought, or worse, a rush to upgrade after realizing the problems archaic systems create (which creates its own challenges). Inefficiencies like these create costs – both directly and indirectly. Staff that use systems or processes that require work arounds are losing valuable time. Potentially worse, outdated systems tend to be forgotten and not used the way they should be. This data loss hurts the organization in the long run, and again, creates future costs when the organization frantically tries to recreate or find lost data.
Similarly, investing in training staff has also taken a backseat. Funding for conferences or skills based training were some of the first line items to drop off the budget and many staff members are missing needed skills to grow in their roles and effectively do their job. Moreover, the rejuvenation factor of being amongst like-minded peers cannot be overstated. Some devalue conferences, but its at these places – in sessions and in the lobbies outside of them over coffee with peers – that stimulating conversations and ideas inspire colleagues to carry new energy, and a recommitment to their cause, back to work. This cannot be overlooked for another year.
And lastly, the most obvious area in nonprofits is investing directly in staff retention. The adage of ‘under paid and over worked’ results in a high turnover rate, organizational history loss, and operational inefficiencies – all of which results in loss of or for service recipients. While there are many ways we can invest indirectly in staff (through remote work opportunities, additional vacation days, respecting home/work balance, inviting furry friends into the office, etc.), nothing will take the place of a meaningful wage increase that represents the hard work these individuals do.
For those nonprofits that fear how these investments will affect their efficiency ratio and analysis of their budget, we invite them to open a dialogue with their funders. From our conversations on the funding side, many funders recognize this challenge and want to engage in a meaningful discussion of nonprofit needs (i.e. the “Real Cost” of running the organization – learn more here and here). You can always contact the team at Starfish Impact directly if you need help determining which investments in your organization make the most sense, and how to discuss them with your funders.
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