Donor Acquisition Tops List of Challenges for Nonprofit Leaders

Aside from an increase in October 2023, the number of donors contributing to nonprofits has markedly decreased each year from the previous year since the peak in 2020. Because donor retention is directly tied to the number of donors an organization has —  and because a strong donor base is critical to fulfilling any nonprofit’s mission — this decline has sparked concern within the nonprofit sector.

As then might be expected, donor acquisition is the top challenge nonprofit leaders are facing this year, jumping up from the second greatest concern last year, according to the latest research from NonProfit PRO.

Notably, donor acquisition surpassed lack of resources, which placed No. 2 on nonprofit professionals’ list of challenges this year. Last year, nonprofit professionals reported lack of resources as the No. 1 challenge they faced.

In order to help nonprofits stay in touch with what's going on in the industry and stay ahead of the curve, NonProfit PRO, powered by NAPCO Research, has released the sixth iteration of the “Nonprofit Leadership Impact Study,” focusing on insights and trends for 2024.

Here are some of the key takeaways from the study sponsored by GiveSmart by Community Brands, which was conducted from Feb. 20 to March 7:

Employee retention. Nonprofits put greater emphasis on offering benefits — such as flexible hours and bonuses — and building positive company cultures with happy hour networking opportunities, employee recognition and more, which decreased concerns about staff turnover.

This table shows how nonprofits are improving staff satisfaction and reducing burnout. | Credit: Nonprofit Leadership Impact Study by NonProfit PRO

Board participation. About 71% of respondents said they had difficulty making sure board members were actively involved with fundraising. They also reported challenges when it came to board members’ lack of engagement, understanding of fiduciary responsibilities and expectations in general.

Grant applications. To tackle some of the major issues facing their organizations, 56% of respondents said they have applied for more grants. Respondents were more likely to report they were leaning more on grants if they were struggling with cultivation and digital fundraising.

For more findings and insights from our “2024 Nonprofit Leadership Impact Study,” download the full report here.