Elements of the charitable sector appear to be suffering from long COVID, which impacts those infected for months and even years. New data from the Center for Effective Philanthropy (CEP) shows executive and staff burnout top the list of issues.

In a new report, “State Of Nonprofits 2024: What Funders Need To Know,” one-third of nonprofit leaders surveyed say that they are “very much” concerned about their own burnout (33%), and half report that they are more concerned about their burnout now than last year.

On average, LGBTQ+ identifying leaders reported moderately higher levels of concern about their own burnout than their non-LGBTQ+ identifying counterparts. Women and non-binary/gender nonconforming leaders reported slightly higher levels of concern about their own burnout during the past year than leaders identifying only as male.

When it comes to diversity issues, respondents observed a variety of changes in their funders’ practices with roughly one-third of leaders (30%) noted that their current foundation funders either have no commitments to advancing racial equity or have reduced or ended their commitments during the past year.

A majority of nonprofit leaders are seeing new or continued efforts from their funders to change their grantmaking practices, including reduced restrictions and streamlined application and reporting processes. However, funder commitments toward advancing racial equity are still mixed relative to sustained changes in other long-standing funder practices.

The survey is based on CEP’s Nonprofit Voice Project, a panel of U.S. nonprofits that is representative of the national landscape of organizations that receive at least some foundation funding. A primary objective of the panel is to help funders, both individual and institutional, better understand the nonprofit experience so they can more effectively support the organizations they fund.

“I think the one finding that is most surprising, most different from last year is leaders’ perception of their own burnout than in the past,” Elisha Smith Arrillaga, Ph.D., vice president, research, at CEP, told The NonProfit Times. She co-wrote the report with Christina Im; and Seara Grundhoefer with Ellie Buteau, Ph.D., and Emily Yang on the research team.

“There are no trailblazers that have faced this path before us, to guide and advise, [for] wisdom. It is a wild world right now,” the authors wrote. The burnout issues are “probably a mix of things,” said Smith Arrillaga. “One thing we know just generally, leading through COVID was a challenge like none other.”

Given widespread concerns about staffing and staff capacity, some nonprofit leaders are exploring the use of artificial intelligence (AI) to supplement the work of their staff. More than half of leaders surveyed (55%) indicate that their organization uses AI in some aspect of their work Responses show 93% of nonprofit leaders say that their organization does not have any official policies either prohibiting or permitting the use of AI.

As in 2023, most nonprofit respondents experienced either a balanced budget or surplus in the most recently completed fiscal year. The majority anticipate breaking even or having a surplus this fiscal year. That’s the good news. The not so good news is that nonprofit budgets tend to be trailing indicators of the overall economy, explained Smith Arrillaga.

In 2023, 19% of repeat respondents indicated a prior-year budget deficit. In this year’s survey, 28% of this group reported a budget deficit during the last fiscal year. The difference between the percentage of organizations reporting a budget deficit in the last year in 2023 and 2024 was statistically significant, but only to a slight degree. It remains to be seen whether this change represents a longer-term trend, according to the authors.

“It does beg the question what is the trend for next year, fiscal trailing indicators,” said Smith Arrillaga.

The majority of leaders reported (81%) reported that their foundation funders continued or made new commitments in at least one area of their funding practices in the last year.

“Biggest take away, for me, this is definitely the moment to be saying to funders exactly what you need in terms of your internal work,” said Smith Arrillaga, “things around internal capacity, benefits, really being able to make those kinds of request to funders is really key.”

To read to complete study, go to: https://cep.org/report-backpacks/state-of-nonprofits-2024-what-funders-need-to-know/

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Source From Non Profit Times