How Important Is the Problem of Rising Costs for Nonprofits? Tell Us.

Here at NFC, we are seeing the issue of rising costs increasingly cited as the cause of precipitous nonprofit closings. This past week, two largely volunteer-run operations announced they would cease or might suspend operations because they could no longer afford the costs of materials.

In one case, Ruby’s Pantry, a volunteer-driven food distribution network, shut all 80 of its sites across Minnesota and the upper Midwest because it is, according to an organizational statement, no longer financially sustainable. This article from Minnesota Public Radio (MPR) describes the low-barrier program’s model in simple terms:

There were no income requirements for using Ruby’s Pantry’s services. Each visitor would donate $25 and receive a box of food and other household necessities valued at up to $100 in return. The groceries were primarily made up of corporate donations of surplus and excess foods and other items.

Why is the model no longer sustainable? There may be any number of contributing factors, but Brian Kreager, co-coordinator of Ruby’s Pantry Coppertop in Duluth, Michigan, attributed the abrupt closing to an accumulation of escalating costs. “Over the past year or so, (rising costs for) truck repairs, truck leases, operational expenses, fuel, insurance, things like that. I think things just kind of stacked up,” Kreager said.

The timing unfortunately coincides with planned federal cuts to SNAP food benefits and rising food costs, thus passing the pain along to local families.

Similarly, we are hearing critical concerns about rising costs for organizations with high fuel costs, such as Meals on Wheels and Samaritan Aviation, which transports patients from remote locations to hospital care, and for home repair or home-building organizations. We have also heard that many organizations are experiencing increased costs when it comes to maintaining their own internal financial offices.

But now we want to hear from you. In what areas are you seeing critical cost rises in your operations, and how are you managing those? Let us know and we will let YOU know what your peers are experiencing and doing.