Higher costs, decline in giving and political uncertainties top their concerns

By Susan Geier-Granite State News Collaborative

 Nonprofits play a unique role in New Hampshire by supporting its residents every day. They are not simply organizations that do good works — nonprofits are a critical part of the state’s infrastructure in providing direct, essential services, the backbone of the safety net. 

But heading into 2025, there is concern in the sector as demand for services increase amid higher costs, decreased giving, shrinking state budgets and uncertainties surrounding the incoming administration in Washington.

“The nonprofit sector in New Hampshire arguably plays a larger role than in almost any other state in the country, and that's because we have a minimalist approach to government,” said Dick Ober, CEO of the N.H. Charitable Foundation, which awards more than $60 million in grants and scholarships every year. “Nonprofits support and do so much of the work in the state that actually is kind of invisible, and we've all come to take it almost for granted.”

New Hampshire’s more than 9,600 nonprofits employ over 14 percent of the state’s workforce, substantially higher than the national rate of less than 10 percent. According to tax filings, they reported a collective revenue of $17.2 billion in 2023.

Many of them receive contracts from the state and federal governments to provide essential services, such as child care, health care, mental and behavioral health care, food and nutrition services, transportation and in-home care for people of all ages. 

“A fair amount of what (the state) does is work in partnership with nonprofits,” said Kathleen Reardon, CEO of the N.H. Center for Nonprofits, a statewide association that provides programs and resources to support nonprofits across the state. “There are a lot of strengths in the model. Nonprofits can be nimbler than state government. We are close to our communities, and so we understand the needs in the communities. We're part of that community where nonprofits, by their very nature, are accountable to our community.”

Coping with uncertainties

But several unknowns at both the state and national level are weighing on the entire sector as it heads into the new year, including an end of COVID-era relief funding, a decline in New Hampshire tax revenue and political uncertainties. 

“I hear pretty consistently from organizations that they are responding to rising demand for services while managing complex issues,” said Reardon, adding that those concerns continue to be workforce, housing and child care shortages. “Nonprofits are at the forefront of helping think through or develop solutions to the state's most pressing issues.”

While outgoing Gov. Chris Sununu has called for state agencies to cut vacant positions and reduce their budgets by 4 percent, it’s unclear how the new governor, Kelly Ayotte, will approach the next biennial budget. 

At the same time, those agencies have collectively requested $1.78 billion more (an 11.7 percent increase) than is in the current state budget, according to the N.H. Fiscal Policy Institute. 

Then there is the incoming Trump administration. 

“There’s concern around the new administration and what potential policy changes could mean for the people nonprofits serve and for the nonprofits themselves,” said Molly Hodgson, CEO of GoodWork in Portsmouth, an organization that supports nonprofits on the Seacoast. “We've had organizations asking about federal tax policies and how that might affect them. There could be changes in government funding priorities for those that get federal funding. Locally, nonprofits are concerned if the demand for services and support continues to grow, how will they be able to meet that need?”

She and Chief Operating Officer Maria Sillari encourage nonprofits to focus on what they can control. “There are so many people needed to do the work, (staff) is often the biggest line item in most budgets,” Hodgson said. “ We work with them to mitigate turnover and burnout, which is key to reducing costs. ‘

Reardon agreed: “In a lot of boardrooms, there are some intense conversations about understanding what may be happening, and people are doing scenario planning.” 

However, shifting political winds and tight budgets are not new and are factors that all nonprofits (and any business) face. 

“At times like this, we think it's more important than ever that people dig deep to support their nonprofit organizations with both charitable donations and with gifts of time as volunteers when they can,” said Ober. “Nonprofits in New Hampshire are incredibly adaptive. The volunteers and the staff who work for them are committed to the missions, and they figure out a way to provide the services that people need.”

That applies to fundraising, which continues to be a challenge for organizations that rely heavily on charitable giving for a large part of their funding. Charitable giving is down across the country, impacted in particular by inflation and other economic concerns.

Nonprofits “really need to be very strategic about their fundraising,” said Reardon. “I'm hearing from the field that they continue to work even harder to show their impact, to raise those funds that are needed.” 

She also recommended that nonprofits seek diversification within their revenue streams as opposed to adding new sources of revenue. It takes different capacities, for example, either to contract with government or to raise funds from private donors.

“It's understanding your mission, what your revenue capacities are, and lining that up,” she said. “It takes a lot of strategy to think that through and figure out where you invest your time and resources.”

Another solution? Collaboration. 

Hodgson said GoodWork advises nonprofits to focus on what they can control, which is connecting with their stakeholders and building relationships with community partners. 

To foster those partnerships, GoodWork launched the Seacoast Impact Collaborative, made up of 14 social service agencies that get together to discuss issues, explore resources and network. 

“I think collaboration and partnership are the wave of the future,” she said. “If you really want to serve people, we're going to have to do it together.”

Even if giving is down and government budgets are cut, the need for services doesn’t go away, said Ober. 

“What individuals can do is support their nonprofit organizations, whichever ones they believe in most, and pay attention to some of the budget and policy changes that could impact themselves and their neighbors,” he said. “Engage in those conversations with policymakers.”

Reardon agreed: “We continue to see funding coming from a smaller amount of people. We really need —  as a sector — to continue to promote opportunities for people to understand that every dollar matters.”

That is one reason the center created the annual 24-hour online fundraising event NH Gives. Every June, it gives the state’s nonprofits a chance to raise awareness and collectively raise money. Some $3.5 million was raised for 649 participating organizations this year.

Beyond essential services, Ober added, the depth and breadth of what nonprofits do is not often understood. 

“If you go to see any sort of live music or plays, virtually all of the performing arts theaters in the state are nonprofit,” he said. “So much of the land that's been conserved in the state, where people might get out to take a walk, to take a hike, to walk their animals, walk their pets — many of those properties have been conserved for the public through the work of nonprofit organizations. That’s what I mean when I say it touches people every day.”

These articles are being shared by partners in the Granite State News Collaborative. For more information, visit collaborativenh.org.