Nonprofit Vendors Seeing Changes
There's no shortage of information or stories about the changing climate surrounding and within nonprofits. But what's forgotten in all of this change are the vendors that serve these charity-based organizations... and they're going through change as well.
The nonprofit times in late January had a terrific article highlighting some of the changes for vendors who serve nonprofits (https://www.thenonprofittimes.com/npt_articles/unusual-wave-of-changes-at-vendors-to-nonprofits). Mentioned are job cuts at Bonterra, the merger of Trust Sense Marketing and One & All, and others. While many of the identified vendors were very large, this issue is not limited to those with hundreds or thousands of employees.
Anecdotally, I know of a few mid-size and smaller firms that are struggling to keep their company “as is” with some of the changing financial constraints.
Why is this happening?
Because there are fewer “sales” opportunities with nonprofits as they tighten their belts. I have a number of clients who have reduced their budgets for consulting, and in some places are reducing staff size. What I hear from the front lines is that revenue streams for and from philanthropy aren't what they were 12 months ago. Inflation and economic uncertainty has caused many consistent donors to pull back a little bit, putting stress on the nonprofits operations. And over the last few years, with so much money being available (PPP, nonprofits spending government supplemental support, etc.), many nonprofit vendors grew at incredible rates (mostly through hiring employees) that cannot be substantiated today.
So what does this mean for our industry? To me, it means nonprofits should be very inquisitive about who their specific client, employee, or consultant is in the contract. With so much employee movement, is it the specific consultant a nonprofit works with that makes the difference or is it the firm/service? If technology-driven support or a physical product, the sales rep might not be the reason a nonprofit stays loyal. However, if it is direct fundraising consulting, the skills, demeanor, experience, communication, and responsiveness of the individual consultant may mean much more.
In the end, the more a nonprofit asks specific, detailed questions about the Scope of Work, the assigned personnel, etc., the better the nonprofit will understand and accept what is expected from a vendor.