When I was in grad school for nonprofit management, I learned about Alexis de Tocqueville, the French political philosopher who traveled through the United States in the 1830s. He noticed something remarkable about American life: When citizens saw a problem or opportunity, they instinctively formed associations to address it. Unlike Europeans, who turned to governments or monarchs, Americans voluntarily organized, raised funds and solved issues together.
Today’s nonprofits are direct descendants of those early associations, and they remain a backbone of our society. But as we look to the next decade, I believe nonprofits face three major challenges: increased competition for funding, overreliance on grants and fundraiser retention and burnout.
Communities are full of passionate people who want to make a difference. In Brown County alone, more than 2,000 nonprofits exist, many of which are seeking support from the same limited pool of funders. At the same time, community needs are growing while government funding is shrinking. Larger organizations once supported by government contracts are now entering the same fundraising spaces as smaller nonprofits, intensifying competition.
The issue is not only the number of nonprofits but also overlapping missions. Many new organizations are launched without sufficient market research to determine whether similar groups already exist. Funders increasingly ask about collaboration to ensure efforts are not duplicative. Passionate individuals need to ask: Am I creating something new that divides resources, or could I partner with an existing group? Established nonprofits, meanwhile, should stay open to collaboration and new ideas. Partnerships can expand capacity without adding more competition for scarce dollars.
Another major challenge is nonprofits’ dependence on grant funding. Grants can be critical but are rarely sustainable. Many funders now make it clear they will not support the same program year after year. Organizations that rely heavily on grants risk financial instability when those grants expire.
From the beginning, nonprofits need to invest in building sustainable fundraising strategies that include annual giving, major gifts, planned giving and solid stewardship practices. These approaches take time but ultimately deliver a greater return on investment, higher donor retention and more consistent revenue streams. These are the very practices funders want to see when evaluating grant requests.
Perhaps the most pressing challenge is retaining fundraisers. The average tenure of a fundraiser is only 18 to 24 months. A key reason for that is the unrealistic expectations placed upon them. Too often, fundraising goals are set not by donor data but by gaps in the budget, so boards or executive directors expect fundraisers to “fix” deficits, and the goals are often unattainable.
This leads to frustration and burnout. Fundraisers who consistently fall short of unrealistic targets feel like they have failed, even when the goals may not have been achievable in the first place. As a result, they leave for organizations with more support and realistic expectations.
Fundraising goals should be informed by data (past giving, donor retention and national trends) and set in collaboration with fundraisers themselves. Beyond goal-setting, organizations must foster a culture of philanthropy where everyone, from board members to program staff, plays a role in fundraising. When fundraisers are supported in this way, retention improves, revenues increase and fundraising becomes a shared responsibility rather than a lonely burden.
How do we combat these challenges?
- For individuals starting new nonprofits: Explore whether similar organizations already exist, and consider collaboration instead of duplication. Established nonprofits should remain open to partnerships that can strengthen community impact.
- For nonprofits of all sizes: Invest early in sustainable fundraising strategies beyond grants, including annual giving, major gifts and planned giving.
- For boards and executives: Set fundraising goals with your fundraiser using data, not budget deficits, and cultivate a culture of philanthropy where fundraising is an organizational priority amongst all staff and the board.
- For the community: Prioritize consistent giving to nonprofits, at any amount, and support nonprofit capacity building as well as programs to ensure long-term stability.
Nearly two centuries ago, Tocqueville observed that America’s strength lay in its citizens’ ability to organize and solve problems together. That remains true today. Nonprofits are vital pillars of our communities, powered by committed, passionate people who want to do good in the world. But with passion must come realistic expectations, sustainable strategies and collaboration. Balancing our desire to fix society’s problems with the realities of funding and capacity will allow nonprofits to thrive and continue their essential role in strengthening our communities.
