When we think about charitable organisations, we always consider their purpose and the people that they aspire to help on a daily basis. As they are not businesses, however, we often overlook the fact that they need to generate money in order to fund their endeavours, raise awareness and affect lives across the globe.

More specifically, there are considerable gaps in knowledge regarding the challenges facing charities and the ways in which they leverage the money that has been entrusted to them. So while the UK’s charity sector is worth a staggering £60 billion each year, many nonprofits struggle to deploy this money in a way that drives productivity and promotes their message.

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3 Challenges Facing Charities and How They Can Overcome Them

With this in mind, let’s take a look at the key financial challenges that face charities as they look to create productive and successful campaigns. These include: –

1. The Failure To Manage Finances Professionally

The nonprofit sector is notoriously complex and constantly changing, particularly in terms of compliance and the need for transparent financial management practices. These skills usually come at a cost, however, while it can be difficult to source service providers with the necessary expertise to deal with charitable organisations.

Fortunately, outlets such as Just Accountants have a team of accountants who are well-versed in the needs of nonprofit organisations, from the cultivation of a viable infrastructure to the deployment and everyday management of funds. This will not only drive transparency and compliance, but it will also optimise productivity and ensure that as much money as possible is committed to an underlying cause.

2.The Issue of Administration Costs

Unfortunately, the vast majority of charitable communications were historically sent by letter, which incurred numerous administration costs in terms of creation and distribution. This instantly deterred potential contributors, many of whom were unsure as to how much of their money would be used by the organisation to cover their costs.

Thankfully, the adaptation of email and more recently social media has enabled proactive charities to negate this issue, primarily by using the global reach of channels such as Facebook and Twitter to inspire, engage and raise awareness. These flexible and freely accessible channels help nonprofits to reduce operational costs without compromising on their message, ensuring that they can raise huge sums of money and reinvest this into their chosen cause.

3. The Motivation of Advocates and Ambassadors

Aside from the power and reach of technology, the typical nonprofit organisation is only ever as effective as the people who represent it. These individuals must be strongly motivated and engaged with the cause if they are to help the charity to achieve its goals, but nonprofits lack the financial resources or infrastructure to pay the individuals who work for them.

Charities must therefore learn invaluable lessons from the worlds of business and commerce, where financial incentives have gradually become less impactful over time. Instead, modern employees are motivated by job security and the ability to add value to a business, as this delivers greater satisfaction and more tangible rewards. Charities must therefore ensure that their volunteers do not become mired in everyday administration and nonprofit bureaucracy, as they instead empower them as influential advocates of a powerful and impactful message.