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This article will continue the discussion of challenges nonprofits are facing this year in light of the pandemic and changing economic conditions.

Increasing Costs

Rising costs will significantly impact the operations of many nonprofit organizations. Due to the lack of funding, many programs are already underfunded. Rising costs will also hurt organizations that were hit by the pandemic.

According to a survey conducted in 2018, over two-thirds of the country’s nonprofit leaders were worried about the rising cost of insurance. They also noted that they were concerned about the increasing cost of cleaning and personal protective equipment.

The concerns about inflation among nonprofits were similar to those of the private sector. Nonprofits and charitable organizations are likelier to feel the impact of price increases than businesses. However, since companies can pass on the higher costs to their customers, this is less challenging.

Staffing Challenges

There has been a lot of media coverage about private companies offering various perks and bonuses to attract and retain their employees. However, according to the CSBC, nonprofits are more likely than their private counterparts to be planning on increasing their wages. In 2021, almost 60% of organizations said they were planning on expanding their employees’ wages, while 31% were planning on increasing their salaries for new hires.

In addition, the average salaries of community nonprofits are lower than the national average. Many organizations are starting from a disadvantage when attracting and retaining employees. Also, many organizations cannot increase their wages due to the lack of operating budgets and flexible funding agreements.

Another issue that affects the nonprofit sector is the decrease in the number of volunteers. Despite the decrease in volunteers, almost half of charitable organizations are still run by volunteers. The combination of the low number of volunteers and the labor shortage will significantly impact the operations of many nonprofit organizations in 2022.

The emergence of the new wave of the pandemic caused by the Omicron variant has drastically changed the situation’s dynamics. Despite the various steps taken to address the COVID-19 situation, the future remains unpredictable. As a result, organizations must continue to monitor the status and take the steps needed to address it.