How can we revamp and improve the third sector to help more people?

Like many organisations today, not-for-profit groups are dealing with complex questions that don’t always have straightforward answers.

Economic challenges, combined with retention issues and a rapidly evolving technological landscape, are making it difficult for some charitable organisations and non-profit organisations to thrive.

Organisations operating in the third sector need to find creative ways to combat common challenges so they can continue doing the work they do best: helping people. Here are a few thought starters that could help:

1. Diversify funding sources

It goes without saying that one of the major challenges the third sector (and many other industries, for that matter) faces consistently has to do with funding. During an economic downturn, organisations that are already severely underfunded struggle even more, and people are often less likely to donate to charitable causes due to tighter budgets and inflation.

According to research from Charities Aid Foundation from 2023, more than half of the charities they had surveyed were worried about staying afloat due to the high cost of living. Without adequate funding, non-profits lack the resources they need to contribute to their cause.

Funding challenges are complex and sometimes require outside help to solve. However, one way third sector organisations might be able to maintain a healthy financial position is to diversify their funding sources and expand their reach.

  • For example, non-profit groups could explore funding sources like:
  • Partnerships with major corporations
  • Government grants
  • Fundraising on social media or other platforms like GoFundMe
  • Special events/campaigns
  • Selling merchandise

There are countless ways to fundraise—it’s all about getting creative and thinking outside the box.

2. Find and retain dedicated volunteers and employees

Another big challenge facing non-profit organisations and for-profit groups alike is finding—and retaining—devoted talent. For charities, this can be even more of a challenge because they often rely on a dedicated volunteer base to make an impact.

Recent research from Endsleigh has shown that 56% of employees who left their jobs in the third sector did so in the name of a higher salary. As such, retaining talented employees ladders back to challenge number one: funding.

While higher salaries would likely help with retention, non-profit organisations need to do more to keep good people around. For example, some charities are introducing work perks like flexible work hours, green initiatives and a stronger focus on work/life balance.

However, the single most important thing a workplace can provide its employees is a sense of purpose. According to data from McKinsey, 82% of employees believe it’s important for their company to have a purpose, and this figure is likely even higher in the non-profit sector.

The bottom line: compensation and positive work perks are important, but charitable groups also need to ensure their employee base feels an emotional connection with the work they’re doing.

3. Ride the technological wave

It’s no secret that technology is evolving at an exponential pace. Just as for-profit companies need to keep up with the technological revolution to stay competitive, third sector groups should be keeping tabs on new innovations so they can stay relevant and maximise their impact.

According to the 2023 Charity Digital Skills Report, only 48% of charities have a strategic approach to digital, while 57% of trustees say they have digital skills that are either “low” or “have room for improvement.” However, 66% say they’d like to explore tech like AI and ChatGPT, and 78% say digital is a priority to their organisation.

Again, taking advantage of the latest technologies will also ultimately ladder back to funding. But finances aside, it’s important for organisations in the third sector to keep a flexible and open mind about trying new things to ensure they continue growing and evolving for years to come.

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