Americans are feeling the effect of the highest inflation rate in four decades, and nonprofits are no exception. Inflation and economic concerns typically bring a decrease in donations as supporters’ concern for their own financial situation grows. In addition, the money nonprofits can still attract will have less purchasing power. As costs rise, the income of many nonprofits will struggle to keep pace. This can be a worst-case scenario for many nonprofits who will see an increase in demand for services as the vulnerable are typically hit hardest by inflation. As wages increase, even basic operational expenses can become a struggle.
How Nonprofits can Prepare
- Adjust income projections and services models, develop an updated budget, and minimize expenses where possible.
- Prevent staff shortages by making every effort to keep salaries ahead of inflation. Offer staff other rewards including flexible schedules or remote work when additional financial compensation is not possible.
- Get creative with your volunteer opportunities and recruitment strategies.
- Meet with your advisor to inflation-proof your portfolio.
- Review the standard donation levels to ensure requested amounts align with rising costs.
- Educate donors on the state of the economy, the impact on your nonprofit, and the need for larger gifts during this time.
- Work with an advisor to expand your strategies for donations with vehicles like charitable trusts and donor-advised funds.
Let AGP Help You Regain Control of Your Charitable Income
Our team can conduct a budgeting and cash flow analysis, help engage with donors, and work directly with your board members to develop an all-encompassing, long-term financial plan. Reach out to our nonprofit team to learn more about how we can help.
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