Inflation affects all elements of the economy, including nonprofits. With prices for essentials climbing, nonprofits are put in a difficult position; as its imminent from current inflationary numbers that price or value of goods and services is the same for everyone – including those providing items and assistance to those in need. This means nonprofits will have to pay more for items or services to help those who depend on their approach. In some cases, paying these higher costs may prevent specific programs from succeeding or even continuing altogether. On the other hand, demand for aid often rises with inflation, so nonprofits must consider how they can expand their reach and manage increased numbers while at the same time facing increased costs due to inflation. As challenging as it may be, adapting to changing conditions due to inflation can be vital in ensuring the continuation of the beneficial work carried out by many nonprofits worldwide.

The recent rapid escalation of inflation has caused distress for companies and households; these changing prices have also affected organizations such as charities. Consequently, charities have had to face challenges that weren’t as pressing previously and invest considerable time and effort into finding ways to respond to the new economic reality. To effectively carry out their purpose and assist those in need, changes must be made to continue providing essential services despite a stagnant or decreasing budget. Organizations should look at product offerings, program delivery methods, partnering agreements, and operational expenses to make resources go further during this challenging period of high inflation rates.

As inflation continues its upward trajectory, it is particularly challenging for nonprofits due to their inability to offset rising prices like businesses so easily can. This leaves them with a tough decision: what services are vital enough to prioritize and provide despite the financial constraints? Ironically, as inflation climbs further, the demand for those essential services provided by nonprofits – often in the area of human services – increases but becomes increasingly complex to make available. As a result, these organizations have an unenviable task; making sure they can provide help where it is needed most while struggling against a shrinking budget.

It is not just nonprofits who are feeling the pressure of inflation – philanthropic donors and supporters must also understand the strain. As currency depreciates, nonprofit budgets inevitably shrink, leaving those working on behalf of the greater good with limited resources available to important causes. Donors should be getting increased awareness from their favorite organizations that more donations and major gifts are more necessary than ever. Fundraising campaigns will become increasingly prevalent as nonprofits seek financial stability. Still, it is also essential for mid and major donors to understand that as prices rise, what once seemed like significant donations may now mean a much-needed donation is not reaching its destination. It’s difficult for both parties, but it can be worked through to ensure that social well-being remains strong over these challenging times.

Due to economic hardship, it is more important than ever for donors to support the nonprofit organizations they care about. While increasing the amount of each grant is undoubtedly one method to consider, there are other ways to help make your money go further and ensure that the organizations you champion can continue their vital work. For example, you may want to prioritize unrestricted donations that give organizations greater flexibility and enable them to respond quickly and be more inventive in their approach. Another suggestion is to earmark gifts and grants by increasing a current recipient’s budget or initiating a new grant to an area of need, allowing organizations to adapt which activities they are able to provide amidst changing times. However you choose to adjust your giving strategy, your donations can undercut some of the financial hardships so many nonprofit organizations have been facing since the start of the pandemic.


How every supporter of these organizations can help during inflation


Inflation Can Hurt Nonprofit Organizations And Their Mission; What Can We Do To Help?

Consider unrestricted grants to maximize social impact.

As global economies adjust to increasingly unpredictable markets, inflation is an unavoidable reality. Organizations of all sizes are feeling its effects, and most significantly, nonprofits, who rely heavily on donations to operate. This can lead to an uncomfortable difficulty on the part of donors, which is why the most obvious solution is to increase your charitable giving so as to make up for each dollar being worth less individually. To keep up with inflation, it’s recommended that major donors add 8.3% to the grant amount; however, unrestricted grants often produce even more significant benefits as they allow organizations to deploy funds where they would be most effective in times of need. Nonprofits are incredibly grateful for these unrestricted grants during times of economic hardship like this because they provide flexibility beyond just covering basic costs associated with inflation.


Inflation Can Hurt Nonprofit Organizations And Their Mission; What Can We Do To Help?

A rising tide lifts all ships – help small and midsize organizations. 

While much of the focus around inflation is on the larger national organizations, it is essential to remember that small and mid-sized organizations are also feeling the pinch. Despite having fewer resources or endowments, these smaller entities still have to deal with their own set of challenges when it comes to increasing prices. They must have strong revenue streams to make difficult decisions in order to remain viable and competitive in an environment where costs often rise faster than revenue. Local and community-based organizations face a unique set of obstacles in terms of budgeting during times of financial uncertainty, underscoring the importance of recognizing their needs and ensuring they receive adequate support.

Nonprofits in the human services sector provide a vital lifeline to those in need, many of whom are struggling to meet their basic needs. For example, food banks struggle to stock enough items, and baby formula, diapers, and other household necessities become too expensive for these charities due to rising prices. Organizations that rely on vans or trucks to transport goods need more continuous funding than ever since the cost of gas is higher every year. Affordable housing advocates must cope with much more expensive material costs when building safe places for people to live. And furniture and bedding suppliers have upped their selling prices, meaning less purchasing power with money left over for shelters and other frontline organizations. It is important to remember that any cause we choose to donate our resources to may be affected by inflation rates, and that knowledge can help us make deliberate decisions when donating.

As we evaluate how our philanthropic efforts can best affect positive change during these difficult times, it is essential that we invest thoughtfully and consider the categories with the most significant price increases. Supporting small and local nonprofits in our philanthropic planning can provide stability for these organizations so they may continue to make lasting impacts on their respective communities. Utilizing market research as well as input from trusted advisors to analyze the specific needs of the causes we’re supporting allows us to create a thoughtful, proactive plan with long-term effects on our community’s present and future.


Inflation Can Hurt Nonprofit Organizations And Their Mission; What Can We Do To Help?

A strong support system can be of enormous support.

Even during tough economic times, it is possible to make a difference by giving back in meaningful ways. Sprinkling a little philanthropy into conversations with family and friends can go far– have those conversations about the organizations and causes most precious to you, and show them why their charitable donations are essential for positive change. Social media is a powerful tool for fundraising efforts and awareness, spreading the message of your chosen nonprofit’s mission and needs, and inspiring others to join the cause. Finding people who have similar goals can even yield synergistic opportunities to work together, so see what kind of collective results you can draw from your social networks.


Inflation Can Hurt Nonprofit Organizations And Their Mission; What Can We Do To Help?

Putting the power of giving into action

Inflation can seriously affect charities and nonprofit organizations that rely on community volunteers to provide services to those in need. With mounting pressure from rising prices, households may be forced to cut back on regular volunteering due to their own financial constraints. Consequently, organizations that operate this way are becoming more vulnerable as the cost of their necessary resources increases and the pool of potential volunteers decreases. Therefore, those who still can volunteer must realize just how valuable their time and effort are to these organizations. After all, no one understands better than they do the plight of those they serve, and being able to offer your support would make an enormous difference.


Inflation Can Hurt Nonprofit Organizations And Their Mission; What Can We Do To Help?

Automation can become an efficiency powerhouse.

In an uncertain economic climate, charitable organizations face particularly dire straits with inflationary forces eroding already limited funds. As a result, investing in technology that can help manage rising costs has become increasingly important to remain operational and maintain a competitive edge. That is where CommunityForce’s Connected Nonprofit Suite comes into the picture. It provides nonprofits with the tools to stay connected with donors, process donations, manage grants, monitors financials, and review data analytics. It gives them a powerful solution to reduce costs while supporting their cause and mission. By turning to this suite of products, nonprofit leaders and organizations will have critical insight into their budgeting and can keep up with inflationary forces without sacrificing growth opportunities or resources.

CommunityForce’s Connected Nonprofit Suite is the go-to solution for nonprofits looking to streamline their administrative and operational processes. This comprehensive suite of solutions covers everything from donor management and financial tracking to volunteer coordination and impact evaluation. The suite helps organizations manage their entire mission lifecycle – in one integrated platform. It’s simple, secure, and user-friendly, meaning better organizational efficiency and higher success rates for missions of any size. Furthermore, CommunityForce offers valuable services such as training support, custom configuration design tailored to each nonprofit’s needs, ongoing system maintenance and upgrades, and greater data security assurance, resulting in less time spent on operational headaches. With this unparalleled combination of features, CommunityForce is helping organizations reach their goals faster than ever before.

Whether you’re a startup organization or a leading corporation, CommunityForce provides fully customizable, all-in-one online grant management solutions to maximize your efficiency, simplify complex processes, and improve collaboration so you can focus on increasing your impact. We’ve helped organizations streamline their entire process no matter the size and scope of their giving.