The Center for Effective Philanthropy’s new report, State of Nonprofits in 2023: What Funders Need to Know, reveals that the inability to invest in support systems for staff is the primary challenge facing nonprofits today, according to nonprofit leaders themselves. Further, it shows that this is the case even in the context of trust-based grantmaking and balanced budgets.

The research findings shine a bright light into a deep, dark hole in philanthropic practice.

On one side of this chasm is a chronic and urgent need for investment in grantee staff and the overall nonprofit workforce.

On the other side is the significant value created by investments in nonprofit workers, which Fund the People recently documented via an analysis of data from a dozen evaluations in The Foundation Review.

In the middle – where there should be a robust philanthropic practice – is the void.

To wit, grantmaking that addresses the financial health and programmatic health of grantees will not be as successful as it ought to be if it does not address the human health of grantees.

CEP’s research indicates that the important reform agendas that have garnered widespread interest amongst many funders in recent years — such as funding ‘full costs’, pursuing trust-based philanthropy, and other such ideas — have yet to adequately address the specific and pressing needs of nonprofit staff.

In fact, research shows that every time nonprofits have the opportunity to raise the issue of philanthropic under-investment in nonprofit workers in the safety of anonymized data, they do so. This can be seen by tracing the findings of CEP’s surveys on nonprofit needs across time, as I will attempt to summarize below.

Read the full article about investing in nonprofit workers by Rusty Stahl at The Center for Effective Philanthropy.