Giving Compass' Take:

• This Fast Company article explores how many nonprofits struggle to access the resources they need to deliver on the promise of their programs.

• How can the conversations around nonprofits shift to better accommodate the realities of achieving impact? Are your own donation patterns reinforcing these damaging cycles? 

• Funders: find out what nonprofits really want to write on grant applications.

Over a decade ago, Kathleen Kelly Janus, a lecturer with Stanford University’s social entrepreneurship program, cofounded Spark, a San Francisco-based nonprofit aimed at encouraging millennials to crowdsource grants and offer pro bono professional services and investment connections to grassroots women’s organizations. It’s since grown to comprise a donor base of over 10,000 supporters.

But then Kelly, who is also a lawyer who’s done social justice work, spotted another disparity: “We had all this success and we hit a wall, and we couldn’t get the funding that we needed to grow to the next level, to expand to other cities and to deepen our impact in San Francisco,” she says. She researched the concept and realized that about two-thirds of nonprofits encounter a similar roadblock because their annual budgets get stalled below the $500,000 or greater level.

Here are five key statistics that Janus has found, how they’ve shaped nonprofit logic, and what the best organizations are doing to thrive regardless.

  1. Only 20% of nonprofit funding in the United States is unrestricted: From a testing and innovation standpoint, that means most nonprofits gain grants that dictate they put money directly toward existing programs.
  2. 75% of nonprofits collect data, but few feel they are using it well: The best way to think about measuring impact is to ask yourself two questions: How will what you’re collecting prove your group is making a difference?  And then: How can it also show where you need to improve?
  3. 81% of nonprofit leaders say access to capital is their biggest challenge: In her research, Janus learned that most organizations don’t engage in fundraising experimentation because they’re worried about the perception that it might create.
  4. 50% of nonprofit employees feel either nearly or totally burned out: “This is even more elevated for founders and executive directors who tend to bear the weight of the organization on their shoulders,” says Janus.
  5. 53% of nonprofit leaders spend less than two hours preparing for a speech: That’s especially scary considering only 10% of people in the sector consider themselves to be well-trained storytellers, according to Janus’s research. At the same time, there’s a huge payoff for those who learn how to talk engagingly about their mission.

Read the full article on five ways nonprofits struggle by Ben Paynter at Fast Company.