Navigating Charitable Sector Challenges Including Budget Cuts

July 19, 2021

(US content, not applicable to Canada)

Strategies for Overcoming Charitable Sector Challenges

Charitable sector challenges are expected to continue as the pandemic has upended much of the economy and changed the nature of donations and generosity. The pandemic required many charities to adjust their missions, turn digital in an instant, and take great strides to ensure their volunteers remain safe on the job site. The unfortunate result is more costs and a revision of the charitable model that likely resulted in budget cuts.

Child sponsorship programs, disaster relief organizations, NGOs, religious institutions, food banks, and human rights organizations have spent thousands addressing the pandemic, along with making budget cuts that were necessary to keep the charity viable. However, with the economic uncertainty created by the COVID-19 pandemic, many donors are becoming much more patient with their offerings as they adopt a “wait and see” approach to 2021 and beyond. As a result, charities will need to reinvent, innovate, and adapt in order to overcome some of these challenges experienced as a result of COVID-19.

Charitable Sector Challenges and the Role of Generosity

Generosity has effectively changed in the midst of the pandemic. The general public still has a willingness to give, but likely in different forms other than cash donations. "In-kind" donations have grown in popularity as a means for the donor to support both a local business and a charity simultaneously. For instance, some donations might come in the form of a generous food offering from a local takeout spot made directly to a charity’s staff. Rolling lockdowns have pushed a “buy local” sentiment among the general public, and charities might expect more gifts from local businesses rather than cash donations.

Other in-kind donations can come in the form of goods like office furniture, computers, and other supplies that can help a charity thrive post-pandemic. Of course, these donations have tremendous monetary value, and charities can adapt to this trend by treating them the same way they treat a cash donation. In addition, these gifts should solicit acknowledgment from the charity in the form of a thank you letter.

Charitable Sector Challenges: Adoption of Subscription-Style Donor Options

Some charities might find more value from their donors by adjusting their donation models. For example, instead of asking for a large lump sum or a one-time donation from a donor, several smaller payments made over time might promote a longer and more fulfilling sense of accomplishment on behalf of the donor.

This “subscription” style of giving promotes regular contributions and helps keep donors engaged and involved. Further, these subscription donations might reduce the workload for staff as the charity continues to evolve post-pandemic, helping to adjust their models and achieve success post-pandemic.

Charitable Sector Challenges and the Adaption of Remote Work Models

Offices were the norm prior to 2020 but might now be considered an extra cost that strains a charity’s budget. Many companies and charitable organizations have completely done away with expensive office spaces and headed entirely online. Many web conferencing and productivity tools can allow directors to manage their volunteers and continue pursuing their vision, all from a home office.

Virtual events, meetups, and other gatherings can also help connect with new donors and potential volunteers far beyond the charity’s immediate local neighborhood. The nature of volunteering has likely changed, and charities will need to adapt, adjusting their volunteer offerings to include a hybrid mix of in-person and virtual work. Strive to create the same sense of community your charity offered prior to the pandemic, and leverage social media to better engage your volunteers and foster a sense of community. This can save charities thousands as they pursue their mission in a new remote working environment.

Charitable Sector Challenges: Adjusting Your HR Practices

Charities in many sectors are often required to perform their due diligence on a limited budget, and the pandemic has only made these budgets thinner. Those tasked with growing a volunteer base must recruit quality candidates and perform extensive due diligence that can help protect the charity’s reputation and better serve their community. Criminal background checks have helped many charitable organizations ensure the quality of their candidates but typically come with a high cost when done correctly.

Charitable organizations could address budget cuts by requiring their candidates to obtain their own background checks as a condition of employment. This HR innovation is likely to save a charitable organization significant time and money and help navigate budget cuts as a result of the pandemic.

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