Inflation Continues to Impact Nonprofit Organizations

By Samhar Almomani on Nov 3, 2022

Though many people may see inflation as a nuisance that adds a few cents to their purchases, it may result in a disaster for people that are already struggling. People who found it difficult to make ends meet before inflation are now struggling even more. For example, it was recently discovered, that the #1 shoplifted item in Israel is baby formula. Poor mothers are now struggling to find enough food and nutrition for their families, leading them to shoplift food for their children. With the price of formula, and other grocery essentials, going up, it is becoming increasingly impossible for poor families to afford the price of their needs.

To add on to the families’ struggles, their source of help- charities and nonprofits- are now also experiencing the worst effects of inflation. This is mainly because the increasing prices are affecting everyday people, and since people are less likely to donate when they have to pay more for their purchases, nonprofits and charities that rely on people’s donations are having a hard time find the money to help people (MHM, 2022)

Also, nonprofit organization that depend on government grants and fees for service are often given fixed funding as expenses keep rising, which results in an operational deficit. “Nonprofit organizations find themselves squeezed on both ends,” says an article by MHM, an accounting agency, “barraged with a surge of need while also financially unable to provide a full breadth of services” (2022).

Covering a growing list of needs with a limited budget is likely to strain all nonprofit organizations, resulting in less coverage for people in need. To our fellow organizations, here are some methods recommended by MHM to use during this time:

• It is important to communicate honestly with donors, as many may not even consider how inflation is eroding their contributions’ effect. Clarify how inflation is affecting the services that you provide and the amount of people that you are able to serve.

• As a way to offset the effects of inflation, it may be worthwhile to reach out to recurring donors and ask them to consider increasing their gift size or give in a higher frequency to battle the effects of inflation.

• Since restricted grants’ financial power decreases with inflation, it is a good idea to ask for flexibility when it comes to restricted grants. By asking donors to lift the limiting restrictions on the gifts, it may allow your organization to get more money to provide essential services.

• It is a good idea to suggest non-financial assistance during this time if your organization has volunteering services. A lot of the time, what an organization is missing is not money but time and effort.

• During this time, it is especially important to retain employees and remain competitive in the nonprofit field. This could be done by creating an inclusive work environment, especially when bolstering wages is difficult at this time.

Here in World Forgotten Children Foundation, one of our core missions is providing help for orphaned children with disabilities. Our past projects have helped children with disabilities all over the world, and we hope to continue our work. You, too, can help us achieve our mission by donating today!

References:

MHM. (2022). Record-high inflation challenges nonprofits: What you need to know. MHM. https://www.mhmcpa.com/insights/article/record-high-inflation-challenges-nonprofits-what-you-need-to-know

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