Every year, Grassi’s Nonprofit Leadership Survey gauges current conditions and outlooks in the nonprofit sector and gathers meaningful real-time data to help leaders benchmark and advance their organizations. Here are the key takeaways from the 2022 survey findings, released this fall:
Conditions are improving. When compared to the 2021 survey results, this year’s findings show vast improvements in certain areas of the nonprofit sector. The percentage of organizations conducting employee layoffs and furloughs decreased sharply from 31% to 12%. The percentage implementing hiring freezes was cut in half (from 20% in 2021 to 10% this year). Funding levels increased for 44% of respondents (compared to 26% in 2021). The sector is also making strides in the area of Diversity, Equity and Inclusion (DEI), with 71% of firms reporting they have a DEI plan (up from 50% in 2021).
Certain challenges are worsening. While rising costs are always a concern, the impact of inflation and other economic factors is clearly evident in the 2022 survey results. Operating costs increased significantly for 74% of the respondents (compared to 33% in 2021). At the same time, organizations reporting an increase in demand for services jumped from 51% to 68%. More than 60% say their funding is insufficient to fulfill their missions. Attracting and retaining talent is still a top concern, but now for 70% of respondents (up from 60% in 2021).
Risks are still going unaddressed. Even after the COVID-19 crisis, more than half of all respondents do not have a business continuity or disaster recovery plan. A minority of respondents across all sub-sectors surveyed conduct annual board performance and skills assessments, and only 27% feel their board’s financial understanding is “excellent.” Less than half of organizations reported “keeping up with digital technology” as one of their top three priorities.
Nonprofits are finding resourceful solutions. Amid ongoing challenges and uncertainty, increasingly more organizations are innovating their way to sustainability. More respondents in 2022 reported making the following strategic changes: creating new programs and services; collaborating with other organizations; and targeting populations not previously served. The survey also found increased levels of board engagement, diversity and training.
To read more about these findings and how they varied by sub-sector, click here to download a complimentary copy of the full survey report. For assistance with applying the data to your organization or implementing strategies to overcome these challenges, contact David M. Rottkamp, Nonprofit Practice Leader, at drottkamp@grassiadvisors.com.
