Diversifying strategies: Nonprofits navigating the inflationary environment

In today's economic landscape, nonprofit organizations face unique challenges, none more pressing than the effects of inflation. According to BDO’s 2024 Nonprofit Standards survey, the top three actions nonprofit organizations are taking to mitigate the impact of inflation focus on diversifying revenue streams, evaluating opportunities for operational efficiency, and enhancing fundraising strategies. With donor numbers declining by 4.5% annually over four consecutive years, nonprofits must stretch their budgets while seeking ways to both increase donations and enhance their impact.

Yet, amid these complexities, nonprofits are adapting, leveraging a blend of strategic donor diversification and technological advancements to navigate these turbulent waters. In fact, 52% of the BDO respondents indicated that they would be increasing their technology spending significantly or slightly with a focus on operational efficiency. By increasing operational efficiency, employees can on mission-critical tasks, demonstrating remarkable resilience and adaptability in the face of adversity.

Implementing donor diversification

Facing the headwinds of inflation, nonprofits are thinking outside the box to diversify their donor base. This not only broadens the financial support but also ensures the organizations are not overly reliant on a single source of funding. Many are leveraging data analytics to identify potential donors across different demographic segments and geographic locations. They're employing tailored messaging to communicate their mission and the impact of potential donations to these newfound audiences.
 

There has also been an uptick in the use of digital fundraising platforms, which has allowed nonprofits to reach an even wider, potentially global, pool of donors. These platforms facilitate a range of giving options, from in-kind donations to recurring gifts, attracting a variety of supporters. Coupling this with strategic partnerships - such as corporate sponsorships and matching grant opportunities - has further strengthened their fundraising resilience in the face of economic volatility.

Leveraging technology

Nonprofits are turning to technology as a linchpin in streamlining operations and freeing up precious employee time. According to the 2021 Digital World Class™ procurement research from The Hackett Group, Digital World Class procurement organizations employ 33% fewer full-time employees. While your nonprofit organization will need someone to perform procurement and purchasing, digital transformation can reduce the time spent on these activities.
 

Key among these tech-based solutions is the adoption of digital tools like HAQM Business. This B2B procurement hub serves as a one-stop-shop for procurement, effectively reducing the manual efforts traditionally associated with this task. With its user-friendly interface, vast product selection, and business-specific pricing, nonprofits can manage their purchases more efficiently. It's not just about procurement, though. Features such as automatic reordering, bulk purchasing, and multi-user accounts further save time, letting full-time employees focus on mission-critical tasks rather than administrative duties. On top of that, powerful analytics provide insights that aid in strategic decision-making, further optimizing resource allocation.
 

Navigating the future

In the face of today's daunting economic challenges, the narrative of nonprofit organizations is one of resilience, adaptability, and ingenuity. Through strategic donor diversification, they're expanding their support networks, ensuring a more stable and robust foundation for their mission. Through harnessing the power of technology, particularly digital tools like HAQM Business, nonprofits are efficiently streamlining operations, freeing up their teams to focus on what truly matters - serving their communities and fulfilling their mission.