Beyond being short-staffed for program and service delivery, organizations also face risks when they are short-staffed in their finance department.
Nearly half of nonprofit leaders said staff issues were the biggest challenges their organizations faced in early 2023, according to the State of Nonprofits 2023 report from The Center for Effective Philanthropy (CEP).
The main staffing issues were hiring and retention, compensation and pay equity (frequently due to competition with tech and for-profit firms), and burnout. Staff burnout has led to having to adjust programs and organizational goals in some cases.
Burnout is contributing to staffing shortages
Ninety-four percent of nonprofit leaders were concerned about staff burnout, with more than one-third “very much” concerned.
Tim Delaney, CEO of the National Council of Nonprofits said, “I’ve heard this so often: ‘I don’t think I can take another step. I’ve loved what I’ve done, but I can’t do it anymore.’”
And, burnout is afflicting staff at all levels:
In the Columbus, Ohio, area, for example, about a third of the top leaders of several social-service organizations have left their posts since 2020, according to an article in the Chronicle of Philanthropy.
Clear and accurate financial reporting is imperative for nonprofits and part of how they communicate their values, trustworthiness, and impact to the public and potential donors.
Michael Corey, executive director of the Human Service Chamber of Franklin County, said in an interview, “Folks are just exhausted.” He mentioned that one director became a librarian. “I’ve got one former CEO who retired and moved to a new home on the beach within a week. He was just done.”
Position vacancies lead to delayed services
A quarter of nonprofit leaders saw more staff leave their organization than is typical in 2022, according to the CEP report. Further, 76% of leaders said they found it difficult to fill vacant positions.
A report from the National Council of Nonprofits (NCN), which surveyed nonprofits in the spring of 2023, showed that nearly 75% of nonprofits reported job vacancies. Nearly 52% of respondents said there are more vacancies now compared to before the pandemic; however, some respondents said vacancies have gone down since 2021.
This matters because, as the NCN report notes, when the public loses nonprofit services, it suffers. Many nonprofits reported longer wait lists for services in 2023.
Hiring difficulties ahead
Beyond being short-staffed for program and service delivery, organizations also face risks when they are short-staffed in their finance department. Clear and accurate financial reporting is imperative for nonprofits and part of how they communicate their values, trustworthiness, and impact to the public and potential donors. While nonprofits are competing for talent with for-profit companies, they may have an even harder time hiring in-house accountants.
In addition to the difficulty inherent in recruiting the right accounting talent and training and monitoring personnel, a report from the American Institute of CPAs shows that the pool of prospective accountants is set to shrink. A smaller percentage of students are pursuing degrees in accounting: between 2021 and 2022, the share of students graduating with bachelor’s degrees in accounting dropped 7.8% and master’s graduates in accounting dropped 6.4%.
Han Group understands these challenges because we are dedicated to working exclusively with nonprofit clients. Our purpose is to use our expertise in nonprofit-specific accounting to be a reliable partner to organizations as they navigate a changing landscape. Reach out to us if you would like to learn how we can help!
