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501 Commons Survey of WA State Nonprofit Capacity Building Needs

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We recently polled nonprofits in Washington State to learn what resources and services they need to increase their impact.  We'll be using the survey results to ensure our services meet nonprofits' needs. Download the complete results here.

What we heard

Representatives from 164 nonprofits responded to the survey, resulting in a 10.4% response rate. The majority of respondents (83%) were executive directors and board members, representing over twenty different service fields. The top three service fields represented were social services (18%), arts and culture (14%), and health (10%). Respondents’ budget sizes ranged from under $50,000 per year to over $10 million, with the majority of respondents (72%) under $1 million.

Twenty-seven percent of respondents have a primary office located in King county, 19% in Walla Walla county, 10% in Snohomish county, and 7% in Spokane county. There were fewer than 10 respondents representing all other counties in the state, with no responses recorded from nonprofits with a primary office located in 17 out of Washington’s 39 counties. However, respondents indicated that they provide services in every region in the state. Respondents provide the most services in King County and Southeast - Adams, Asotin, Columbia, Franklin, Garfield, Walla Walla and Whitman counties.

Nonprofit Trends

Leadership Transition

One-third of respondents (33%, 53) indicated that they expect to have a change in leadership in the next three years. Of those expecting a change in leadership, 39% (36) are somewhat likely or very likely to bring in an interim executive before hiring a new leader.

Most leadership transition is expected to occur in King, Walla Walla, Snohomish, and Spokane counties. This result could be influenced by the fact that more respondents who completed the survey were from these counties.

Smaller organizations are more likely to experience leadership turnover than larger organizations. Over half (57%, 30) of respondents who said they expect a change in leadership in the next three years have budgets of $250,000 or less.

Respondents who are expecting a leadership turnover think it will affect their organization in a variety of ways. Some see it as a positive opportunity for growth. Some are hiring/transitioning as a result of organizational growth. Some are uncertain, unsure, or nervous about how it will affect the organization. Some indicated it will be stressful and challenging, and are concerned about losing institutional knowledge and program/strategic expertise. Some will be losing founders and feel there would be a significant shift in the organization. Some indicated that the leadership change would cause change among the staff and board. A few feel like there will be little impact.

Volunteerism

Seventy-seven percent (122) of respondents have increased their use of volunteers in the last three years. Of those organizations that do not use volunteers, 40% (12) plan to start a volunteer program in the next two years.

Board Issues

Forty-five percent (70) of respondents have found it harder to recruit qualified board members in the last two years.

A little less than half (48%, 75) of respondents described their relationship between the executive and the board as “very supportive and very helpful” and 35% (54) described their relationship as “very supportive, occasionally helpful.” Only 3.2% (5) described their relationship as “difficult, stressful.” Some respondents could not answer this question because they do not have an executive and are run by the board.

Collaboration

A little over a third (39%, 61) of respondents are considering developing a new collaboration, combining operations in some way, or merging with another nonprofit in the next three years.

Of the respondents that are considering developing a new collaboration or merging, 69% (46) say the primary reason is to better serve clients. Only 19% (13) and 12% (8) say it is because of cost savings or improved access to funding, respectively.

Financial Management Issues

Twenty-eight percent of respondents have concerns about how their organization is managing its finances. The top three concerns are:

  • Weak financial controls because they have 1 or 2 people handling all financial transactions
  • “Don’t know what we don’t know” about managing grants or individual gifts.
  • The board doesn’t have a good understanding of the organization’s finances.

Best practices

Respondents reported having strong financial management systems and protections against fraud, but are weaker in their volunteer management systems and technology infrastructure. Sixty-three percent (95) of respondents consider their financial management systems and protections against fraud to be “in good shape” or “reflect best practices.” Only 39% of respondents consider their technology infrastructure to be “in good shape” or “reflect best practices,” and only 33% (50) of respondents consider their volunteer management systems and practices to be the same.

Interest in capacity building services

While most respondents received capacity building services in the last two years, cost is still a major deterrent for organizations that did not receive services. Seventy-eight percent (118) of respondents have used a consultant, attended a workshop, or received other capacity building services in the last two years. Of those who did not, 65% (17) said the main reason was because they did not have the resources.

Over 70% of respondents were either “somewhat interested” or “very interested” in attending a session on the basics of governance, strategic planning, or financial management. We posed this to include the assumption that the session would cost $45 per person and would be available in or near their community in order to understand both need and a willingness to pay a fee.

When asked about their preferences for receiving capacity building services, the top two preferences were in-person training sessions/classes and cohort or peer learning opportunities.  Interest in receiving one-on-one coaching, training through webinar or teleconference, or consulting services were all about equal at 35-38%.

Audit and review services are the most likely service to be purchased over the next two years. However, the majority, 59% of respondents indicated that they did not plan to and are not likely to buy a financial audit or review in the next two years.

When asked which of a long list of services they either plan to buy or are likely to buy, other than an audit or review, the five most likely services were:

  • Fundraising assistance (31.1%)
  • Communications, marketing, graphic design (27.3%)
  • Bookkeeping or ongoing accounting services (24.3%)
  • Other financial services—help with reporting, financial policies, QuickBooks training etc. (22.2%)
  • Staff training (21.8%)

The next five highest rates for planning or likely to buy were:

  • Training on advocacy and community organizing   (20.1%)
  • Strategic and business planning (17.8%)
  • Leadership Coaching for ED and others  (17.1%)
  • Assistance with program development, evaluation, logic models etc. (16.5%)
  • Human resources   (15.6%)

Peer coaching was the service respondents indicated that they are least likely to buy. This is likely the result of people not expecting to pay for this service.

Of the survey respondents with organizational budgets over $1 million, those with budgets between $1-2 million seemed most interested in purchasing services overall. These organizations either plan to buy or are likely to buy:

  • Financial audits (71%)
  • Fundraising assistance (43%)
  • Technology planning (36%)
  • Database services (33%)
  • Bookkeeping services (29%)
  • Communications/marketing/graphic design expertise (29%)
  • Staff training (27%)
  • Training on effective advocacy (27%)
  • Assistance with program development (23%)
  • Human resources management (21%)
  • Legal services (21%)

Survey respondents with organizational budgets between $2-5 million were less interested in purchasing services overall, but either plan to buy or are likely to buy:

  • Financial audits (57%)
  • Staff training (50%)
  • Legal services (29%)
  • Communications/marketing/graphic design expertise (21%)
  • Database services (21%)

Survey respondents with organizational budgets under $1 million were most interested in purchasing:

  • Fundraising assistance
  • Financial audits
  • Communications/marketing/graphic design expertise
  • Bookkeeping or ongoing accounting services
  • Strategic planning and business planning

Technology Services

Between 15-20% of respondents either plan to buy or are likely to buy technology services in the next two years, with database services and website design being of the most interest.

Technology uses mentioned by the respondents related to a broad range of organizational activities. In the next two years, respondents think that technology will help them be more effective or efficient with using social media sites, mobile applications, and other forms of communication; updating their websites; updating hardware and software; using databases for tracking and reporting; customer/client/donor relationship management; on-line mentoring/training; receiving payments online; volunteer scheduling, recruitment, and management; electronic medical records; and cloud systems.