The Nonprofit Worker Shortage (and How to Find Capacity Grants to Help!)


Melissa Branthaver


Communications professional

Reviewed by:


April 6, 2024

Last Updated:

April 8, 2024

The nonprofit industry is facing a workforce crisis.

There’s an increase in demand for services, but there are not enough employees or resources available to meet these rising needs.

If you’ve been experiencing these issues at your own nonprofit, you’re not alone. Even better, there are steps you can take to be proactive and help avoid any disruption in your services—and we’re going to share them with you.

In this article, we’ll cover:

  • The top reasons for the nonprofit workforce shortage
  • How you can combat these challenges in your organization
  • How capacity grants—and Instrumentl—can help

In the end, you’ll be ready to source new funding opportunities to meet this crisis head-on.

Sound good? Let’s jump in!

Top Reasons for Nonprofit Workforce Shortage

The Council of Nonprofits recently conducted a survey in 2023 across all 50 states to get a pulse on the nonprofit workforce shortage and the impact it’s having on communities. No matter how good people feel about working for nonprofits, they’re still leaving the industry at a fast pace.

In fact, nearly 75 percent of nonprofits reported that there are vacancies within their organizations, and it’s not always clear if they are going to backfill these roles.


The survey respondents identified the following barriers to currently recruiting and retaining nonprofit staff:


The Chronicle of Philanthropy reports that low pay is driving nonprofit employees away, and it’s no surprise why. Often, people working in the private sector or for publicly traded businesses have higher salaries than those in the nonprofit field.

Lower wages, when coupled with inflation, cost of living increases, and more, can cause added stress on families. Nonprofit workers might still be passionate about the work, but it no longer makes financial sense for them to stay in the field.

Budget Constraints

Nonprofits are subject to budget constraints just like any other type of business.

In some cases, a nonprofit employee might leave and the expense to backfill the position isn’t approved. This leaves staff still needing to do the work but with fewer people.

Other times, nonprofits might experience a reduction in their workforces because they didn’t get a big grant renewed and don’t have the funds to support all of their staff.

Whatever the case, budget constraints often prevent nonprofits from being fully staffed, forcing them to make do with less. Any additional or excess resources may simply go to the increased cost of operating.

Stress and Burnout

Even though the work they’re doing makes a positive impact in their communities, stress and burnout are common in the nonprofit field and take a toll on staff. The hours can be long, the pay can be less competitive, and the stress of the position can get to workers—specifically those on the frontline.

After a while, even the most passionate employee can feel burnt out and need a break, leading to a cyclical problem. Nonprofits may not have the resources available to help their staff feel supported and thrive. They focus so much on the well-being of the community that they can forget about their own.

Additionally, it can be tough to recruit if there is high turnover in positions. The remaining staff often end up doing the work of many in the interim without additional compensation, causing more stress. It’s a vicious cycle.

How You Can Address These Workforce Challenges At Your Nonprofit

The challenges that nonprofits face in retaining their staff are serious, but they’re not insurmountable. By being aware of the challenges, you can take proactive steps to help avoid them in your organization.

Avoid Scope Creep

It can be incredibly tempting to try to chase every grant or solve every crisis in your community. After all, you want to make a difference!

But by trying to do everything, many nonprofits fail to do anything.

Their resources are so spread out that they are unable to make any measurable difference. They can’t fulfill their grant requirements, and they lose sight of their mission. If you’re chasing everything, your staff will quickly become burnt out, leading to turnover and contributing to the nonprofit worker shortage.

You can avoid scope creep by having a clearly defined mission, strategy, and priorities. Lean on your Board of Directors to help keep you honest, and learn to stay no—or, at the very least, not right now—to help foster a healthy work-life balance for your staff.

Think of it like an air mask on an airplane. You can’t take care of others if you don’t first take care of yourself, so stay true to your mission. Your employees will thank you, and your reputation in the community will remain strong.

Have Clearly Defined Responsibilities

Roles that aren’t clearly defined can be incredibly frustrating and inefficient. It’s likely that multiple members of your team will be doing the same work at the same time, which is not a good use of anyone’s efforts.

So, how can you have role clarity?

  • You can create a RACI matrix so everyone knows who is responsible, accountable, consulted, and informed for key projects.
  • You can make sure job descriptions are accurate in a role’s responsibilities so there’s no confusion.
  • You can get weekly status reports and identify opportunities for efficiencies in the moment.
At the end of the day, the more clearly defined the responsibilities are, the more efficiently your nonprofit will run.

This is critical for any organization, but particularly those with limited resources. You don’t have the staff or money to waste on accidentally doing double work.

Promote Volunteerism

There are many clerical and administrative tasks that need to be done within an organization. However, no one said it had to be completed by full-time employees!

Instead, look to free up resources by leveraging volunteers. This is a great way to still get the work done but open up capacity from your full-time staff to do more mission-critical work.

What are some tasks that volunteers can do?

  • Sort donations
  • Call donors to solicit money
  • Staff events
  • File paperwork
  • Support programming
Volunteers are an untapped resource at many nonprofits, and while it is an investment to set up a program and oversee it, it will yield dividends in the long term.

You can promote volunteerism at your nonprofit by:

  • Hosting pop-up events where people can volunteer their time as needed.
  • Creating advisory councils, alumni panels, and other groups who can volunteer their time.
  • Building corporate partnerships to source captive volunteers.
  • Starting a community challenge to engage your constituents to get involved and make a difference.

The more creative you can get with your volunteer programs, the more engaged volunteers you’ll have!

Find Capacity Grants

The most financially stable nonprofits have a diversified funding strategy that features a mix of private and public grants, donations, earned income, and more.

Capacity grants can be used to set up the internal infrastructure that helps make all the magic happen. You can fund salaries, acquire resources, undergo training, and so much more. For nonprofits struggling with workforce shortages, capacity grants can be a gamechanger.

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How To Find Capacity Grants on Instrumentl

Instrumentl’s robust database of funding opportunities allows you to find specific types of grants based on your nonprofit’s needs, including capacity grants. If you want an in-depth, step-by-step guide on how to do this, check out this article.

Here’s a quick overview:

Setting Up Search Parameters

Instrumentl allows you to set up specific search parameters as you create your project, which is basically a saved search so Instrumentl can match you with relevant grants.

You can select what you want to use the funds for, and to identify capacity-building grants, you can choose:

  • General Operating Expenses for grants that help with overhead expenses, which can include staffing.
  • Capital Project to help you with construction, renovations, or other equipment purchases.
  • Training/Capacity Building for grants for internal support training and educational initiatives.
These specific filters will help save you time as you won’t have to sort through irrelevant opportunities.

Once you save your preferences, Instrumentl will generate matches that fit your criteria, capturing these elusive types of capacity building funding opportunities.

Review Your Matches

You will then be able to review your matches and sort them by best match, newest, and more. You can also adjust the filters if the matches do not meet your criteria.

As you evaluate these grant opportunities, you can also review the funders’ 990 reports, which will help you quickly identify the best-fit funders based on their:

  • Giving history (total giving, average grant size, etc.)
  • Causes they have supported in the past based on NTEE codes
  • Openness to new grantees

These insights will equip you with the information needed to identify funders that align with your mission and funding needs.

Save Opportunities for Further Consideration

Once you have found capacity grants you’re interested in on Instrumentl, you can save them to your Tracker for future consideration. Instrumentl’s built-in Grants Tracker is a great tool to help you:

  • Organize your grant opportunities
  • Identify the status of any project
  • Keep track of upcoming deadlines
  • Collaborate with your team

Unlike other platforms, Instrumentl provides tools to streamline the entire grant lifecycle, providing a one-stop shop for all your grant prospecting and grant management needs.

Important Reminder: Keep in mind that while capacity grants can help you address the nonprofit workforce shortage, these opportunities should fit into your overall strategy. You should not chase every opportunity or you could unintentionally cause burnout and stress within your team.

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Wrapping Up

The nonprofit worker shortage is a serious issue within the nonprofit sector, but there are steps that you can take to address these challenges head on.

These include avoiding scope creep, clearly defining responsibilities, promoting volunteerism, and applying for capacity grants. Instrumentl makes it easy to find capacity grants that meet your nonprofit’s needs and align with your mission.

If you’re ready to try, sign up for your free, 14-day trial today!

Melissa Branthaver

Melissa Branthaver

Melissa Smith is a freelance communications professional with over 10 years of fundraising experience working within higher education and corporate philanthropy to help clients land their next funding opportunity.

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