Problems in the industry Essay

The major problem in the nonprofit industry is the lack of resources (e.g. funding, skilled employees, social support etc.) to help all potential clients. Unfortunately, there are many more countries and regions needing humanitarian help than all the NGOs can address. Another problem is the consequence of the former situation: the NGOs have to make a choice between several groups of potential clients; there also exist accountability pressures associated with the nonprofit initiatives – NGOs need to provide certain proof that their programs are truly efficient. These activities increase overhead costs and draw funds away from the charity programs to accounting and financial issues. Registration and paperwork, especially in the countries with high level of bureaucracy are another issue in the nonprofit industry.
The nonprofits depend on international regulations, financial and trade agreements and the mode of interaction in the countries of their service provision. Also, the NGOs are vulnerable to local price increases and exchange rate fluctuations, which might significantly change the efficiency of the programs. In many countries, there are collaboration issues, or there are no local NGOs available to support and maintain the activities of the international charities.
One of great problems of the nonprofit sector is board development (Cirelli, 2011). Creating the appropriate culture and building an active board of directors is quite difficult, because high-impact people often are not interested to struggle with the NGO.
Finally, the NGOs often lack a strategic approach to management and especially to promotion. Although the competition in the nonprofit sector is still present, there are few leaders who really understand that and use the means of promotion and advertising to attract the attention of public and sponsors (Cirelli, 2011). Overall, managers in the nonprofit sector need more training on marketing and fundraising, as well as efficiency training. Many new nonprofits suffer from inefficiency and the lack of focus. Thus, the leaders in this industry have to focus on efficiency, sustainable fundraising policy, strategic planning and impressive promotion, especially in online sector.