May 24, 2022
Inflation and Nonprofits
Adding inflation to the mix is creating a perfect storm for continued financial hardship for organizations and the communities they serve.
The current inflationary period we’re experiencing isn’t just hitting our household budgets hard – it’s impacting non-profit organizations, too.
Non-profits are still reeling from the last two years of the COVID-19 pandemic, which left so many organizations with bare-bones budgets and major personnel turnover and layoffs. Adding inflation to the mix is creating a perfect storm for continued financial hardship for organizations and the communities they serve.
Non-profits are small businesses. When the cost of doing business increases, their ability to meet current community need and their increased demands on their programs is affected…even damaged.
How a non-profit talks about the impact of inflation is critical to helping donors understand how their philanthropy can help weather the storm. KDS is working with its clients on how to craft grant application narrative that explains in no uncertain terms that there is no more belt-tightening to be done – inflation is threatening their programs, their impact, and their very existence, and the time for increased investment is now. KDS will be sharing template language over the next few weeks that your organization can use to tell your own tale.
In the meantime, we’d like to leave you with a few links to thought pieces around the impact of inflation on the non-profit community:
- Donors Don’t Understand Inflation’s Impact on Charities. That’s Why Fundraisers Must Tell Them. (philanthropy.com)
- Nonprofits and Foundations Need to Be Prepared for the Effects of Inflation on Services, Operations, and Endowments – Lilly Family School of Philanthropy (iupui.edu)
We always look to thought leaders like Vu Lee at Nonprofit AF to say what needs to be said. So here’s the truth:
“Inflation doesn’t affect everyone equally. It most severely hurts lower-income families. In our sector, it will be organizations led by Black, Indigenous, AAPI, Latinx, women, disabled people, LGBTQIA+ people, rural communities, and their staff and the people they serve who will be most affected. These are organizations that have already been struggling through decades of lack of investment from philanthropy. They now face additional and disproportional challenges that come with inflation.”
Inflation is killing nonprofits. Funders, you need to supplement your grants immediately. – Nonprofit AF