What do nonprofits struggle with the most?

Acknowledging Nonprofits’ Vital Community Role

Having a respected position by local governance, rather than being treated like beggars on the street corner. Too often, and especially now with the increased standard tax deduction, the nonprofit role in American economics is overlooked and misunderstood.

Nonprofits exist to fill the gaps that government can’t or won’t fill. Donations to charities/nonprofits exist to give tax breaks for those who actively support the common good through their donations to nonprofits.

Most local (and federal) lawmakers have no knowledge of this economic wheel and often set up an “us and them” scenario when it should be “how can we work TOGETHER to make our community better?”

— Stephanie Lile from Harbor History Museum

Overreliance on Grants Threatens Nonprofit Missions

One of the greatest challenges nonprofits face today is diversifying their revenue streams. Many organizations rely heavily on foundation grants and government funding, which — while essential — are often unpredictable and come with restrictive guidelines.

This dependence can create a precarious financial position, especially when funding priorities shift or economic conditions tighten. When too much of a budget hinges on a few sources, the entire mission can be at risk if even one of those sources dries up.

To build more resilience, nonprofits must think beyond traditional grants and government grants. Individual giving, corporate partnerships, earned income strategies, and online fundraising campaigns offer opportunities for financial stability and growth.

Opportunities exist in launching social enterprises, fee-for-service programs, investing in donor engagement, and more. Diversifying efforts can provide more flexibility and allow nonprofits to better adapt to changing circumstances.

The key is to approach fundraising with the same creativity and strategy that nonprofits bring to their programs. Diversifying revenue is not just about survival, it’s about sustainability. When organizations cultivate a broader mix of income sources, they gain the freedom to innovate, plan long-term, and stay focused on what matters most: Serving their communities.

— Paul from The DC LGBTQ+ Community Center

Balancing Animal Care with Inconsistent Funding

At Cat Tales, one of our biggest struggles is balancing consistent funding with the daily demands of animal care and education. We’re a small team caring for big animals, many of them aging rescues with lifelong needs.

While we’re passionate about our mission, it’s tough to stretch limited resources to cover staffing, veterinary care, and facility upkeep — especially during off-season months when visitor income drops.

We also face the ongoing challenge of helping the public understand that we’re not a zoo — we’re a forever home for animals that have nowhere else to go, and that comes with a very different set of needs.

— Debbie from Cat Tales Wildlife Center

Volunteer Recruitment and Retention Challenges

Volunteer recruitment — and retaining those volunteers — has changed dramatically since COVID. There are far too many options available for individuals who want to volunteer with nonprofit organizations and give back to their communities.

The potential volunteer(s) must be contacted immediately as well as engaged by our nonprofit — or the potential volunteer moves to something else or simply changes their mind.

The concept of volunteering has taken on an entirely new meaning to most people — i.e.: Is it convenient? What’s in it for me? And will it be fun all the time?

— Marie Cole from Golden Retriever Rescue of Atlanta

Lack of Strategy Hampers Fundraising Growth

For most nonprofits, I believe fundraising is a constant uphill battle. Growing competition makes it hard to raise the money needed to sustain programs and grow impact. Many organizations don’t have a full-time fundraiser or access to modern tools and training.

Without a clear strategy, they often rely on one major donor, an annual event, or the hope of landing a grant, a risky approach in today’s unpredictable landscape.

Even more challenging is donor retention. It’s tough enough to get someone to give once; getting them to give again requires time, relationship-building, and consistent communication — things many nonprofits struggle to prioritize.

On top of that, boards and leadership are often hesitant or unprepared to engage in fundraising, further slowing momentum. At the heart of it all, many organizations simply don’t feel confident asking for money. But fundraising isn’t about begging, it’s about inviting people to be part of meaningful change.

Until nonprofits embrace that mindset, the struggle will continue.

— Paul Marengo from The Cherry Fund

Uncertainty in State and Federal Funding

Currently, funding uncertainty (financial sustainability.)

Many of our programs are state and federally funded. The status of future funding is unknown. Planning for the future is very difficult.

— Margo Olson from River Valley Resources, Inc.

Funding Mission, Not Just the “Project”

I just shared this with a communications consultant when asked, “What is your organization’s biggest challenge right now?”

The challenge is articulating to funders, especially granting entities, that our work is the mission!

The “project” is the programming we provide day in and day out; and to NOT fund general operations is to not fund our “project.”

— Jason Alvis from ReHope

Mission Drift in Tough Times

Staying on mission. It’s so easy to drift when the landscape gets rocky.

— Carol Davies from HOCC

Financial and Recruitment Challenges

Financial sustainability, as well as recruitment and retention due to the lack of competitive wages.

— Ruth Taverner from Richmond Family Place Society

Balancing Daily Tasks and Strategy

Balancing working ON the business versus IN the business is essential.

It’s easy to get consumed by daily urgent issues, but making time to focus on strategy is critical — it’s the key to reducing those emergencies over the long term.

— Judie Caribeaux from Mission + Strategy

Connecting with Like-Minded Donors

Being a small nonprofit utilizing various grant platforms, my experience has been difficulty finding donors with similar interest to the mission.

— Kathy Hickman from Precious Gifts Ministries & Community Development Corporation

Fundraising Ethics: Balancing Donor and Community Needs

Nonprofits struggle with moral and ethical issues surrounding the intense resources required for fundraising; “donor-centric” vs “community-centric.”

The big elephant in the room is the selfish motivations of the rich: The tax advantages of nonprofit giving, decades of widening wealth inequality, and wealth hoarding.

If they don’t struggle with this, enabling and codependency are the top problems.

— Nancy Buffum

Scaling Without Strategy Leads to “Hunger Games” for Resources

Nonprofits struggle the most with scale. By scale, I mean the ability to grow programs while still maintaining a strong infrastructure.

I have worked in nonprofits that prided themselves on the ability to expand geographically and hire more staff, but were ignoring the fact that their benefits package was inadequate or that back-office staff members were overburdened.

In addition, there are many new nonprofits that began with a donor’s dream but might have been more effective if the donor approached an aligned nonprofit and offered to fund a new program. Instead, each new nonprofit replicates the infrastructures of older, more established nonprofits.

As resources for nonprofits became more and more scarce, it is essential that the nonprofit community look for mergers with similar organizations.

Otherwise, we enter into a “Hunger Games” scenario where we all must fight for the weapons (tools) and resources (funding) — but only the larger organizations with more established revenue streams will win in the end.

— Randi Sunshine from Learning Rights Law Center

Funding Day-to-Day Operations

Funding day-to-day operations is one of the biggest struggles our small nonprofit has. We want all funds to go straight to programs, but the reality is wages and space require funds in order to raise funds.

We provide the care and feeding of a board of directors, volunteers, donor outreach, AND we all work together to raise funds for innovate programs.

— Aron Carleson from Hillsboro Schools Foundation

Note: The opinions and product/service recommendations expressed above are solely those of the participants and do not necessarily represent those of Blue Avocado. Submissions may be edited for length and clarity.