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Benchmarking – How does your Organization Stack Up?

Benchmarking – How does your Organization Stack Up?

NONPROFIT ORGANIZATIONS

Benchmarking – How does your Organization Stack Up?

By: Tony Jerina

With over 1.5 million nonprofits registered in the United States is can be difficult to compare the metrics or your organization with other nonprofits.  Fortunately the BDO Institute for Nonprofit Excellence in partnership with The Nonprofit Times has collected data from over 100 nonprofit CFOs and executive directors in the area of strategic planning, operation, scope and impact, human resources and governance. Following is a summary of the more pertinent findings:

Strategic Planning

While the average nonprofit maintains 8.7 months of operating reserve, 53% of all nonprofits maintain less than six months of operating reserves. Nearly 75% of the respondents considered staff retention and recruitment the biggest challenge facing their organization in the upcoming year where neatly 50% would consider cutbacks in funding a concern. Even with these concerns over 50% of the respondents plan to introduce new programs in the future.

Operations

The majority (70 %) of the organizations surveyed reported an increase in their revenue over the prior year with the bulk of that revenue coming from program fees followed by government grants and then individual contributions. As expected, individual contributions accounted for over 30% of the funding for public charities but only 5% for health and human service organizations.

Scope and Impact

On average, 80% of organizations expenditures were directed at program activities. This percent will come under more scrutiny in the futures as more donors are requesting additional information than in the past. This will require nonprofits to be more transparent with their activities and incur more costs to deal with the requests for information. This burden will fall hardest on the smaller nonprofits who do not have the human resources to gather statistics related their programs impact. Showing that some things remain the same, printed material is still the preferred format for communicating with donors.

Governance

Requiring conflict of interest statement is a good way to avoid possible issues which is why nearly 90% of nonprofits require a signed conflict of interest statement from their governing board.  Between five and nine years is the usual time a board member is allowed to serve on a board.  The most common board size is around twenty members, with the larger nonprofits having thirty or more board members.

Human Resources

As with most organizations, compensation was the top employee satisfaction issue with benefits not far behind. Half of all organizations responding reported an increase in compensation of 3 to 4% with very few reporting increases above those percentages. The most common benefit planned for the future will be the flexible work schedule. Nearly 70% of all respondents plan on offering flexible work schedules in the next two years.

Managing a not for profit organization can be a challenge, especially in a rapidly changing fiscal environment. HBE LLP has the resources to help you cope with what lies ahead for your organization, we would be happy to help.