2025 Nonprofit Outlook – Connecting with Staff as You Plan for Changing Times

Nonprofits have dealt with staffing challenges for years, and now, federal funding cuts and their ripple effects are adding fuel to the proverbial fire.

Through the COVID-19 pandemic, Great Resignation and economic hardship, nonprofits have faced staffing shortages, high turnover rates and employee burnout. Almost 75% of organizations reported job vacancies in Forvis Mazars’ State of the Nonprofit Sector 2024 Annual Report. And 95% of nonprofit leaders expressed concern about staff burnout in a similar report from The Center for Effective Philanthropy (CEP).

Many nonprofits struggle to recruit and retain employees, often having work environments where people feel overworked, underpaid and emotionally spent. Organizations have responded to these challenges by offering flexible work options, better compensation packages and more professional development opportunities.

Now, however, the strength of those efforts is being put to the test.

The federal government ordered a pause in grants and other federal assistance pending further review. While much remains unclear, this action will likely cause major disruptions among nonprofits that rely on government funding. At the same time, competition for foundation grants will likely grow fierce as organizations scramble to offset losses. And those in need may see cuts to their food, housing or other government benefits, increasing the demand for services.

How will nonprofit staffers fare amid this potential perfect storm? We can’t predict the future, but we can offer you guidance on connecting with your employees and building a supportive working environment to best weather these uncertain times.

Stay the Course

The first step is not to panic, but to plan. When markets, funding and economies shift, your goal should be to avoid taking drastic measures or making rash decisions. Work with your board to develop strategies for different scenarios that may occur and consider how your organization can reduce expenses. Once you’ve worked through high-level planning, it’s time to demonstrate your leadership and communicate with your staff.

Communicate Openly & Honestly – All the Time

You can’t achieve your mission without your employees – they are the driving force of your organization. Connecting with them is always important, but it’s especially critical during a time of great uncertainty.

Open, honest communication serves several purposes: it keeps your employees informed, it reduces the potential for misinformation and trauma, and it arms your staffers with consistent messaging they can pass on to external stakeholders.

Keep the following points in mind as you share information with your staff:

• Show strength, resolve and unity – your organization will work as a team to implement a plan of action, face challenges and continue serving the community
• Remind everyone why you’re all here – you all have a passion and commitment to carrying out your mission
• Clearly outline what’s at risk if funding gets cut – it’s important to be realistic and honest about programming and staffing adjustments you may need to make
• Provide your employees with frequent updates and talking points, especially for those who communicate directly with donors and other external stakeholders

Encourage Feedback & Ideas

Your employees need to be informed, but they also need to be heard – especially those on the front lines who deal directly with people your organization serves.

Now is the time to create opportunities – both formal and informal – for staffers to share not just their concerns and emotions, but also their ideas. Whether it’s through regular staff meetings, one-on-one conversations or surveys, you need to initiate ongoing dialog with your employees. Ask about their concerns and ideas for addressing challenges. Most important – make sure you listen.

When staffers feel heard and believe their ideas are valued, they are more likely to stay engaged in whatever course your organization needs to take.

Build a Nurturing Workplace Environment

If your organization does a good job communicating and listening to employees, you’re well on your way to creating a supportive working environment – one that can make a big difference as you try to manage staff and sustain operations in uncertain times.

Here are other elements to consider:

• Give staffers opportunities to grow, develop professionally and learn new skills
• Recognize employees for their achievements and contributions
• Prioritize work-life balance, offering flexible work options
• Place importance on mental health and well-being, offering access to counseling services
• Do your research – make sure you’re providing your employees with competitive salary and benefits packages

Need Help?

If your nonprofit is facing challenges with strategic planning, we can help. Contact The Vella Group at info@vellaspg.com to start the conversation.