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Note: This is the second of three articles aimed at raising awareness around the impact, importance, and struggles of nonprofits in the lead-up to The Big Give on September 18-19, 2024. Read the first article here.

The business model of nonprofit organizations presents unique challenges, particularly during a time when inflation and political landscapes are shifting. For many local nonprofits, a downward trend in community contributions is beginning to threaten their most vital lifeline.

 Donations are a lifeline

Charitable donations and philanthropy are the driving forces for nonprofit organizations. These two distinct actions are crucial for supporting the mission of a nonprofit and are essential for its survival.

However, relying on donations and grants presents unique challenges. These funding sources are inconsistent and unpredictable, making it difficult for nonprofits to financially plan for their operations and programs. In many ways, nonprofit organizations rely on the community for support so that they, in turn, can support the community.

Donating to a local nonprofit is a voluntary expense for individuals, corporations, and foundations. So, why should the community support nonprofits in this way?

The main reason is to ensure that nonprofit-based services, which are intentionally poised to sustain and improve lives, can continue. For instance, a local nonprofit that serves senior citizens heavily depends on donations to combat senior isolation and food insecurity.  A recent decline in donations and volunteers has jeopardized services, which provides over 85,000 meals to 570 local seniors annually. Without community support, seniors could be neglected and even go hungry. In no instance should anyone in this community allow this vital nonprofit to disappear.

Similarly, another local nonprofit provides care to families with children with special healthcare needs and offers autism education and bereavement support for those who experience the death of a child.  This organization served around 527 individuals and families in New Braunfels and Comal County in 2023. Their mission is alive due to donations, events and philanthropy. As financial support for this niche service model declines, a reduction in care for the community’s most vulnerable families follows.

A downward trend

Money coming into nonprofits has been on a gradual decline since the pandemic. Despite 2023 recording the highest tidal wave in charitable contributions ever at $557.16 billion nationwide, overall giving dropped by 2.1% after adjusting for inflation, according to Giving USA 2023. In 2022, after inflation adjustments, contributions fell by 10.5%.

Downturns, due either to global shifts or donors’ financial situations, have a direct impact on nonprofit organizations.  Like the donors, nonprofits are also hit by inflation and economic uncertainty. Their vulnerability, however, is heightened because they depend on donations and grants, but unlike for-profit businesses, they cannot increase prices.

Presidential election years also pose unique challenges for nonprofits. In times of uncertainty, donors may hesitate when considering who, where and how much to give due to shifting priorities and fear of what may come. The inevitable fluctuation of public opinion further complicates an unpredictable giving cycle. When donors hold back, nonprofits encounter increased competition for dollars on top of the complex fundraising programs they must execute to acquire those funds.

Nonprofits involved in prominent, higher-profile issues often receive more funds, which leaves other critical organizations competing for the remaining resources. In the face of inflation, an election, and dwindling donations, the capacity of nonprofits diminishes significantly, while the demand for their essential services grows exponentially.

Moving forward in faith

Despite downward trends in giving, local nonprofit organizations continue to push through tough times to give back to the community that has stood by them. Amidst economic uncertainties and political distress, these organizations remain optimistic about the future. They move forward in faith that the community they aid will continue to support their work.

Thankfully, fundraising initiatives such as The Big Give offer nonprofits a chance to increase outreach, tell their stories, and further engage with the community to raise needed funds. As they navigate difficult times, please lend your support. Your donations and volunteer efforts give them a lifeline to do things like feed hungry seniors and support our most fragile families.