Abila Nonprofit Finance Study Finds Majority of Nonprofits Plan to Grow within the Next Year

July 12, 2017 – AUSTIN, Texas – Abila, the leading provider of software and services to nonprofits, associations and government entities, announced today findings from its Nonprofit Finance Study: Managing Growth. This study explores the trends and challenges associated with nonprofit growth, including how organizations plan to grow in the next few years, growth’s impact on risk management and compliance, and the difficulties maintaining organizational culture during growth.

“Approximately 80 percent of surveyed nonprofits say they plan to grow in the next 12 to 18 months,” said Dan Murphy, senior manager of fund accounting strategy for Abila, and study co-author. “However, oftentimes, with growth comes increased complexity. For example, managing risk, maintaining compliance and retaining an organization’s unique culture becomes more challenging as organizations adopt a wide variety of growth strategies. Those nonprofits that understand and plan for growth now and in the near future will be primed for success.”

Key findings include:

• Growth is broadly defined, but very important for nonprofit organizations. More than four-in-five survey respondents say growth is (at least) very important, and nearly half say it is extremely important. Yet, growth can mean different things to different people, with some defining it by an increase in services and others by an increase in funding.
• The search for revenue in order to grow is constant. More than half of the survey respondents state that during the remainder of this year (2017), they will apply for new grants, look for new ways to generate revenue, and increase fundraising efforts. Seeking new opportunities for grant funding is the top strategy for growth, with more than half saying they are very likely to do this as they grow strategically.
• Financial professionals worry about the impact of growth on budget planning and training. Around two-thirds say budget planning and training of new staff are at least moderate, if not major, challenges of an organization’s growth.
• Risk management becomes more challenging as organizations grow. Sixty-two percent say as their organization grows, their ability to manage risk becomes somewhat or much harder. This is especially true among organizations with at least 500 employees (75 percent) or with at least 20 finance employees (77 percent). And, while virtually all express some level of confidence in the ability to manage risk, just 27 percent are very confident.
• Increased fraud risks are a concern to one-in-three. Though most do not think their organization’s growth opens them up to greater potential for fraud or accusations of fraud, 33 percent do think that. Among organizations that bring in at least $10 million in revenue, 42 percent say the same, as do 48 percent of those in organizations with at least 500 employees.
• Growth changes culture and relationships. While many think relationships with major funders and the organization’s board improved after growth, they are far more mixed when assessing impact on morale, ethics and transparency within the organization. Younger employees are much more likely to equate growth with a positive increase in morale.

The full report can be downloaded at: abila.com/2017growthstudy.

About the Study

Commissioned by Abila, Finn Partners fielded online surveys to 301 nonprofit finance professionals. To be included in the study, respondents had to state in the survey they still worked for a nonprofit, and their primary role involved finance or accounting. Abila provided lists, and professionals were sent an email invitation to participate. Note that sometimes totals may not add up to exactly 100 percent, due to rounding. The surveys were conducted between May 9 and May 25, 2017.