Personio Foundation’s first report spotlights the case to focus on people management in nonprofits

Right this moment, the majority of nonprofits are being confronted with a host of HR-related challenges. The bad news is that these challenges are genuine and potentially damaging, but the good news is that they are avoidable. What nonprofits and donors need are the right data and insights. So, our team got to work. 

Our report sets six essential takeaways for the road ahead for nonprofits to operate effectively and efficiently that hamper their capacity to deliver impact.

1. Nonprofits play a key role in delivering innovation of all kinds.
But, their impact is often hampered by specific HR challenges – most of which could be heavily mitigated or avoided entirely. 

2. From our analysis, six major HR challenges have emerged.
Attracting talent, retaining talent, working conditions, tracking and fostering performance, a lack of HR management resources and tools, and complying with complex regulatory frameworks. While struggles like these are known in the private sector, they often require solutions tailored to the nonprofit sector. 

3. Talent attraction and retention are top challenges.
While the general lack of competitiveness of salaries versus the private sector is well-known, nonprofits also lag in terms of compensation packages, working conditions, reward and recognition, and career progression. 

4. Effective solutions to build strong organizations already exist.
They include measuring and rewarding individual performance linked to outcomes, providing non-monetary incentives such as training and career development, or fostering staff well-being. That said, these solutions are yet to become industry standard. 

5. Donors have an essential responsibility and a large role to play.
In fact, donors should move beyond project financing to more strategic, sensible investments in various overheads (like people growth budgets) through unrestricted, multi-year grants and targeted capacity development programs. 

6. Nonprofits could and should invest more in their employees.
They should seek to do this by supporting employees with both financial (when possible) and non-financial means, improving their working environments, and introducing more professional HR management policies and tools. 

As we take you through the data and paint a picture of the road ahead, we hope this report lays the case for nonprofits to focus more on their people and for donors to empower nonprofits with the resources and means to make this transformation possible. We enjoyed putting it together, and we hope you enjoy reading it.

Click here to explore the full report.

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