2024 State of Nonprofits and Philanthropy Annual Report - 2024 State of Nonprofits and Philanthropy Annual Report.pdf
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| Non-profit organizations in San Diego struggle with economic challenges (DALL-E) |
San Diego Nonprofits Face Rising Demand, Workforce Struggles Amid Economic Challenges
San Diego, CA – January 28, 2025 – San Diego’s nonprofit sector is experiencing rising demand for services, workforce challenges, and financial uncertainty, according to the 2024 State of Nonprofits and Philanthropy report by the University of San Diego’s Nonprofit Institute.
The report highlights that nearly 80% of nonprofit leaders reported an increase in demand for services, driven by high living costs, reduced government support, and growing community needs. However, half of nonprofits currently have waitlists, with only 9% able to meet the full demand.
Workforce retention is also a growing concern, with many employees citing inadequate pay and limited career growth as reasons for leaving. Additionally, burnout among nonprofit staff and leadership remains a pressing issue, with 43% of executives acknowledging its impact on service quality.
Despite these challenges, nonprofits remain resilient. More than 70% of organizations reported integrating artificial intelligence into their operations, primarily for content creation and data analysis. However, 66% of leaders expressed concerns about AI adoption due to knowledge gaps and ethical considerations.
The financial outlook for nonprofits is mixed. While many organizations still have cash reserves, the average reserve time dropped from eight months in 2023 to six months in 2024. Furthermore, 41% of nonprofits used reserves to cover operational costs in the past year, raising concerns about long-term sustainability.
The report calls on funders, policymakers, and community members to support nonprofits through increased financial investments, advocacy, and sustainable workforce solutions.
For more details, the full report is available through The Nonprofit Institute at the University of San Diego.
Missions of Nonprofits in Human Services, Housing, and Refugee/Immigrant Services
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Human Services Nonprofits
- These organizations focus on basic needs, mental health, food assistance, healthcare, and employment support.
- Examples include food banks, domestic violence shelters, disability support services, and youth programs.
- Their mission is to uplift vulnerable populations by providing immediate aid and long-term resources for stability.
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Housing Nonprofits
- These groups work to prevent homelessness, provide transitional housing, and develop affordable housing projects.
- Some focus on permanent supportive housing for people experiencing chronic homelessness, while others provide rental assistance or advocate for tenant rights.
- Their mission is to ensure access to safe and affordable housing for low-income individuals and families.
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Refugee and Immigrant Services Nonprofits
- These organizations assist asylum seekers, refugees, and undocumented immigrants with legal aid, language learning, employment training, and resettlement support.
- Many also provide cultural integration programs and mental health services to help newcomers adjust to life in the U.S.
- Their mission is to empower and integrate immigrant communities while advocating for their rights.
Impact of DEI on Nonprofit Executive & Staff Retention and Mission Effectiveness
The 2024 State of Nonprofits and Philanthropy Report highlights that diversity, equity, and inclusion (DEI) efforts have been a major focus for San Diego nonprofits, but their impact on staff retention and mission effectiveness has been mixed.
1. DEI and Staff Retention
✅ Positive Effects:
- Stronger Organizational Culture: Employees who perceive DEI efforts as genuine report higher job satisfaction and are less likely to leave their positions.
- Better Representation in Leadership: More nonprofits are recruiting diverse executive leaders and board members, improving inclusivity at the decision-making level.
- Transparency and Fair Promotion Practices: Employees who believe promotion and pay decisions are fair and equitable are more likely to stay.
❌ Challenges:
- Resistance & Fatigue: Some executives report pushback from staff, board members, and funders on DEI initiatives, leading to frustration and disengagement.
- Budget Constraints: Smaller nonprofits struggle to fund DEI programs, leading to uneven implementation.
- Executive Burnout: Leaders managing both DEI expectations and operational challenges are at risk of burnout, contributing to turnover.
📌 Key Finding: While DEI initiatives increase job satisfaction among some employees, executive burnout and stakeholder resistance have contributed to leadership instability.
2. DEI and Mission Effectiveness
✅ Positive Effects:
- Greater Community Trust: Nonprofits prioritizing DEI have stronger relationships with underserved communities, improving outreach and engagement.
- More Equitable Service Delivery: Organizations integrating DEI are better at tailoring programs to meet the needs of diverse populations.
- Better Fundraising in Some Cases: Some funders prioritize DEI-focused organizations, creating opportunities for new grants.
❌ Challenges:
- DEI Distraction from Core Mission: Some leaders feel that DEI has overshadowed service delivery, diverting resources from pressing community needs.
- Funders Scaling Back Support for DEI: Large nonprofits report pressure from donors and stakeholders to reduce DEI initiatives, limiting long-term sustainability.
- Lack of Board Engagement: DEI efforts often focus on staff, while board members remain less engaged, reducing overall effectiveness.
📌 Key Finding: DEI has improved trust and service equity, but concerns about mission drift and funding sustainability have emerged.
3. The Future of DEI in Nonprofits
- Growing but Facing Headwinds: While most nonprofits remain committed to DEI, fewer are willing to adopt new DEI programs due to budget constraints and pushback.
- Leadership-Staff Disconnect: Executives tend to rate their DEI efforts more favorably than frontline employees, highlighting a need for improved communication.
- Focus on Measurable Impact: Organizations are shifting toward demonstrating how DEI efforts directly improve mission success rather than just fulfilling a mandate.
Final Takeaway
DEI has enhanced workplace culture and community impact, but challenges like executive burnout, stakeholder resistance, and financial limitations threaten its long-term sustainability. Nonprofits that integrate DEI strategically rather than reactively are more likely to see lasting benefits.
Impact of San Diego’s “Sanctuary City” Status and Homelessness Crisis
1. Sanctuary City Policies and Their Effect on Nonprofits
San Diego has positioned itself as a welcoming city for immigrants, offering protections against deportation and access to city-funded services. This has:
- Increased demand for immigrant aid services, legal support, and housing assistance.
- Strained nonprofit resources, as more asylum seekers and undocumented individuals seek emergency shelter, food, and healthcare.
- Led to policy pushback, with some critics arguing that sanctuary policies contribute to resource shortages, while advocates say they provide necessary humanitarian support.
2. Homelessness Crisis and Its Effect on Nonprofits
San Diego has one of the largest unsheltered homeless populations in the U.S., worsened by:
- Skyrocketing housing costs, making it difficult for low-income residents to afford rent.
- Insufficient shelter space, forcing many to remain on the streets.
- Mental health and substance abuse challenges, requiring specialized nonprofit interventions.
Housing nonprofits have been overwhelmed, with longer waitlists, limited funding, and increased competition for government grants. Many have warned that without more financial support, they may be unable to keep up with demand.
Overall Outlook for These Nonprofits
- Increasing financial strain due to demand outweighing resources.
- Government support fluctuates, making long-term planning difficult.
- Staff burnout is high, as employees struggle with the emotional toll of serving vulnerable populations.
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