How Funding Complexities Fuel the Nonprofit Workforce Shortage

The National Council of Nonprofits released its 2023 report on the Nonprofit Workforce Shortage, concluding that job vacancies are a pervasive challenge in the sector. Nonprofits provide essential services in the numerous gaps between private enterprise and the government, and whether you work in a nonprofit or not this report is an important read. It's not all doom and gloom – the report provides a number of concrete recommendations for addressing this critical workforce shortage challenge. 

Among the reasons for trouble with retention and recruitment, many organizations cited the financial strain and burnout that comes from the heavy compliance requirements of government funding alongside very limited funding for covering the costs of staffing this admin work. As one org explained, “We are being asked to provide more and more information related to our work by our grantors. Yet no one wants to pay for administrative costs. We cannot keep up the demand for all the administrative work that is being required of us without it being funded.”

We’re hearing this a lot from nonprofits we work with. It’s a vicious cycle – admin capacity is essential to securing and retaining funding that your org needs to drive impact, and yet it’s incredibly difficult to attract and retain people to do this work when admin costs are underfunded and too few people are left to do too much. Reform around the administrative requirements and cost coverage of different funding sources – including but not limited to government funding – is a key part of the solution, and we advocate for this every opportunity we get.

To help organizations navigate the current state, we bring targeted, external operations capacity at an affordable cost to both build capacity-creating systems and provide interim hands-on support during staffing transitions. We’re here to help mission-driven orgs address the gap in their finance & ops capacity and build more sustainable infrastructure to reduce the stress on staff to manage it going forward. To learn more about how we can support your organization, reach out to us.