Inflation Hurting Nonprofits

While most of the conversation and news coverage around the current inflation issues centers on individuals and families, it also should be noted that inflationary pressures are harming nonprofits in significant ways. Recent articles across the country are beginning to highlight this trend. From food banks in Vermont to mental health outreach in California, nonprofits are beginning to signal less support for important causes as well as cuts in budgets.

I’ve heard stories about the increase in cost for eggs, spaghetti, and meat affecting food banks and their ability to provide support for those most in need. A little bit more distant than immediate basic needs, nonprofits who build homes for the community have voiced their concerns about the rising price of lumber, HVAC, and other materials. And across the entire nonprofit employment market, inflationary pressures on employees and hourly or salary wages is causing great consternation amongst leaders and boards on figuring out how to afford the same level of “human output” from a more limited budget.

The sad reality is that with the same inflationary costs in the nonprofit area as the for-profit business world, non-profits can’t just raise prices. The equivalency is getting larger amounts of donations. But the same inflationary pressures in business are affecting individual families and their decisions on resource allocation on a monthly basis. The scary thing is that may mean less philanthropic dollars available because disposable income has been reduced based on inflationary pressure in homes across the country. The bottom line is, fewer donations are coming in, and at the same time, costs are going up.

Nonprofits are going to have to be really smart and creative, as well as forward thinking about how to minimize the effect of inflation. At the same time they may see a reduction in revenue or income. It’s a worthy challenge that deserves more contemplation and discussion.