Nonprofits Face Growing Demand for Services but Staffing Shortages

FORVIS, a leading accounting and consulting firm, today published its annual national nonprofit study, revealing that 71% of nonprofits had increased demands for their programs and services in 2023, resulting in waitlist increases and delays. Additionally, to mitigate operational expenses, more than two-thirds of organizations are planning to cut programs and services over the next two years.

Furthermore, more than half of nonprofits saw an increase in net income in 2023 as leaders dealt with workforce shortages, the rising demand for assistance, and growing operational costs. While a significant reversal from last year is seen in income increases (48% noted decreases in 2022), the report reveals a decline in individual contributions. This type of year-over-year decrease has occurred only four times in the last 40 years.

These findings are among many in the 2024 State of the Nonprofit Sector Report released today by FORVIS. The annual report benchmarks the responses of 325 nonprofit professionals from various organization sizes and types across the country, from small startups and midsize groups to large educational and health institutions. The survey was conducted in late 2023.

“A vital component for ongoing success, for organizations of all sizes, is the cultivation of the next generation of nonprofit leaders,” said Dan Prater, senior managing consultant with FORVIS and author of the report. “While organizations will increasingly lean on technology to lessen workforce demands, the importance of real human interactions will persist. Such genuine enthusiasm is often fostered by those who have truly immersed themselves in the industry.”

Other key findings include:

• 56% of nonprofits saw an increase in net income in 2023
• Almost 80% reported difficulty filling senior leadership and management positions
• 85% report that their most prominent barrier to successful recruiting is a shortage of available employees
• 43% of human services and 55% of religion-related nonprofits experienced a decrease in financial contributions

“Trust-based philanthropy will be a major theme in 2024 and beyond,” Prater said. “Organizations must look and listen to the very people who use their services and strive to develop and deliver programs based on this input.”

The report is based on an electronic survey as well as individual interviews that included 43 questions about organization size, function, and stability. Conducted in late 2023, the survey was open for one month and was available to all sizes and types of tax-exempt organizations throughout the nation. Participation was voluntary and anonymous.

FORVIS serves nonprofit clients of varying sizes across the country, including foundations, museums, social services agencies, and more. Download the 2024 State of the Nonprofit Sector Report.