Exposed vulnerabilities in nonprofit organizations due to funding shifts by Fed
Last Thursday, the Nonprofit OpCon was held at Hebrew Union College, bringing together experts and leaders from various nonprofit organisations across New York. Representing nearly 18% of the city's private workforce, the event emphasised the importance of adapting to the changing landscape of the nonprofit sector.
One of the key issues discussed was the underutilised office spaces that burden many nonprofits, costing anywhere from half a million to $2 million a year. To address this, panelists urged nonprofits to rightsize their office spaces using utilization data, embrace hybrid work models, and adopt automation technologies to streamline operations.
By analysing average daily occupancy, peak and low usage days, and identifying underused zones, nonprofits can downsize their physical footprint or reallocate space more efficiently. This approach helps avoid paying for empty desks and wasted conference rooms, saving 25–40% on lease and operational costs annually.
Consolidating or subleasing extra space is another strategy nonprofits can adopt to reduce costs. By working together, nonprofits can leverage some of the city's unused office space for joint programs and collaborations.
Leveraging hybrid work policies and designing workplace experiences is another essential aspect of the new normal. Nonprofits are moving beyond simply accommodating remote work to focusing on how work gets done, creating flexible workplace strategies that improve performance and employee experience while optimising real estate effectiveness.
To adapt to funding volatility and rising costs, nonprofits deploy dynamic budgeting methods like scenario-based budgeting and rolling forecasts. This allows them to respond efficiently to financial changes, informing decisions about real estate expenses and investments in automation.
Investing in automation to reduce operational costs is another crucial strategy. Although specific automation examples are not detailed, nonprofits increasingly adopt tools like workflow automation and digital processes to improve efficiency and reduce staff workload, complementing cost savings from space optimization.
However, challenges remain. Reducing unnecessary real estate costs, encouraging widespread automation, and diversifying funding streams are critical issues that nonprofits must address. Adopting new technology and AI has been slow in the nonprofit sector due to limited financial ability and generational hesitancy.
Partnerships and collaboration among nonprofits will be critical to ensure their survival for the next five to ten years, according to David Carlos. Shereen Santalesa, director of human resources of the Primary Care Development Corporation, stated that a capacity for change translates into the ability to adapt and be agile.
Organisations should also invest in robust legal services to keep a pulse on rapidly changing policies. Generational gaps across the nonprofit sector contribute to hesitancy in adopting new technology and AI. AI and technology are not intended to remove the human side of fundraising, but to make space for it, according to Francesca Frederick.
Flexible workspaces remain essential to attract and retain talent in the current workforce, especially since the COVID-19 pandemic. Nonprofits must continue to adapt and evolve to meet the challenges facing the sector and maintain their impact.
[1] Nonprofit Quarterly, "Rightsizing Office Space: How Nonprofits Can Cut Costs and Boost Efficiency" [2] Nonprofit Tech for Good, "Dynamic Budgeting for Nonprofits: A Guide to Adapting to Financial Changes" [3] Harvard Business Review, "The New Workplace: How Nonprofits Can Improve Performance and Employee Experience"
- In order to streamline their operations and reduce costs, nonprofits should consider adopting automation technologies that improve efficiency and reduce staff workload, while also considering dynamic budgeting methods like scenario-based budgeting and rolling forecasts to adapt to funding volatility and rising costs.
- To address the issue of underused office spaces that burden many nonprofits, panelists suggested nonprofits to rightsize their office spaces using utilization data, embrace hybrid work models, and collaborate with other nonprofits to leverage some of the city's unused office space for joint programs and collaborations, helping them save 25–40% on lease and operational costs annually.
