How is your not-for-profit performing?
30 September 2021
Understanding how your organisation is performing in comparison to others in your sector can be a valuable and instructive exercise. The BDO Institute for Nonprofit Excellence recently released their 2019 Nonprofit standards benchmarking report, surveying over 200 US based organisations across a wide range of sectors. In this article we share some of the key findings from this Report, which we believe to be highly relevant to the New Zealand environment.
Operating reserves and the starvation cycle
Maintaining sufficient operating reserves gives an organisation options when it comes to making investment decisions or weathering an unexpected deficit. The starvation cycle results from chronic underfunding of infrastructure and employee training, so while an organisation may be meeting its short term objectives, it is in poor health for future growth. In the survey 63% of organisations surveyed had six months or less of operating reserves. Setting the right level of reserves for your organisation is dependent on a number of factors and is specific to your situation, for more information see out Not-for-Profit Reserves Survey.
Technology is a priority
As with other businesses, NFPs are looking at technology to help automate and make their operations more efficient. In particular, two thirds of those surveyed are planning to invest in technology such as management platforms and data analytics over the next twelve months.
Mission + compensation = employee satisfaction
Satisfied and engaged employees are a critical component of organisational success. For NFPs, attracting and retaining key staff can be challenging particularly in regard to compensation. 78% of those surveyed rate employee compensation as a moderate to high challenge. Feeling connected to the mission of your organisation is another key factor in determining employee satisfaction and it was pleasing to note an overwhelming majority rated this as only a low challenge.
Impact reporting offers NFPs the chance to improve engagement with stakeholders by giving a more holistic view of what the organisation has achieved. 84% of respondents noted an increase in requests from funders for outcome and impact reporting information. The most common challenges associated with impact reporting were lack of human resource to collate information and lack of consistent reporting frameworks.
Effective NFP boards require a range of skill sets and often rely on volunteers. More than half of those surveyed rated succession planning as a key challenge facing their board over the next year, along with cybersecurity and internal resource constraints.
To find out more please contact local BDO office or your BDO adviser.