Inflation’s Outsized Impact on Nonprofits
Rising costs are a struggle for us all, but inflation is especially hard on those that help the most: like nonprofits. Inflation is creating an extra strain on social impact organizations still struggling from the pandemic, be it an overwhelming increase in demand for services, lack of resources, insufficient infrastructure, or staff shortages.
“Rising inflation increases community needs while slowing down donors’ ability to give—resulting in higher costs and increased budget pressures for organizations to keep shelves stocked and support going,” write Lynn Margherio and Dean Athanasia of Cradles to Crayons, a nonprofit Common Impact has partnered with on multiple skills-based volunteering opportunities, in a Philanthropy News Digest op-ed. “Inflation also has diminished the impact of every dollar donated; for example, a $1,000 donation represents less purchasing power than before, so the dollars aren’t able to cover as many nonprofit expenses.”
Nonprofits need our support, and companies have a secret weapon that can help them in these difficult financial times: their talent. Sharing corporate employees’ specialized skills and expertise with nonprofits that have corresponding needs is the basis of skills-based volunteering. This transformative service model strategically matches companies with nonprofits to help them build capacity, save money and time, increase efficiency, and better deliver on their missions.
Investing in Nonprofit Capacity and Long-Term Results
The average nonprofit reports spending only 2% of its total budget on infrastructure – better understood as critical business functions like HR, finance, technology, and marketing – compared to 20% for the average company.
Nonprofits face significant pressure from critics and donors alike to invest as little as possible in infrastructure to maximize programmatic spending, but this mindset is harmful in the long run. Nonprofits are businesses too, and like private sector companies, they need to be able to fund the departments that will make them nimble and prepared enough to survive challenges like inflation, not to mention help the causes and communities they serve to do the same.
If nonprofits don’t have the unrestricted funds or financial flexibility they need to invest in infrastructure, skills-based volunteering can be immensely valuable in bridging the gaps. Companies can provide nonprofits with much-needed pro bono support on underfunded operations challenges and business strategy needs, such as:
- Human resources: Hiring, onboarding, talent development, DEI strategy, succession planning
- Finance: Financial modeling, market analysis, cost-benefit analysis
- Technology: Vendor comparisons, systems streamlining & integration, app development
- Marketing & Communications: Branding, messaging, community outreach, stakeholder engagement, social media strategy, email marketing, website restructuring & updates
Stretching Nonprofit Dollars
Skills-based volunteering is an invaluable resource for time and cash-strapped nonprofits. A study by True Impact shows that skills-based volunteers were significantly more likely than traditional, hands-on volunteers to increase the organizational capacity of the nonprofits they were serving by 35% for increasing nonprofit reach and 28% for increasing nonprofit efficiency and effectiveness.
This means skills-based volunteering partnerships with companies can enable nonprofit employees to spend less time and energy navigating inefficient systems or working on projects outside of their core expertise (nonprofit professionals are frequently required to “wear many hats” beyond what their titles might indicate) and focus more on serving their communities and growing their organizations’ impact.
Tapping into the expertise of corporate partners is a low to no-investment solution for nonprofits to save money on consulting fees and free up staff time spent on strategy sessions, vendor comparisons, and more (areas where spread too thin staff might not be as strong and therefore not as efficient in analysis and decision making). It frees up valuable time for staff to focus on programmatic work and service delivery.
Whether a project lasts several months, weeks, or even just a day, the long-term efficiencies and progress that come from it benefit the nonprofit well past the time they invest working with a corporate partner.
Empowering Employees to Do Good – in Any Economy
In times of inflation (or a recession or stock market crash…), companies and individuals might not be able to donate to nonprofits as much as they’d like to, but they can still give their time and talents. This year, help your company’s nonprofit partners fight inflation with the capacity and resilience-building benefits of skills-based volunteering.
Start or enhance your skills-based volunteering programming with Common Impact. Learn about our strategic consulting and program management services, as well as tools & training to amplify your impact.