The Future of Health & Human Services: A Tale of Two Worlds

Over the past two years, the importance of health and human services (HHS) organizations has been underscored like never before. While some organizations have experienced a surge in demand and revenue, an increase in the awareness of their mission, and an expansion of their services, others are still facing funding challenges.
 
As organizations emerge from the pandemic, groups in both of these camps have fundamental questions to consider. How can nonprofits that did not see a surge during the pandemic restructure and redirect strategic investments? And how can nonprofits that did see a pandemic-related boost continue with their expanded offerings or new service lines, while maintaining their new revenue levels? Nonprofits that fall into either category can consider the following approaches:
 
Diversify funding sources.
While the COVID-19 pandemic provided a surge in federal funding and led to an increase in donor support, the increase in these two areas is not indefinite. Organizations should look for opportunities to diversify their revenue sources and maximize other income streams to ensure continued financial stability. In particular, revenue sources that leverage an organization’s existing capacities and are aligned with the organization’s impact would be the best fit in terms of ease.
 
Leverage technology to refocus efforts.
According to data from HHS organizations in BDO’s Nonprofit Standards Benchmarking Survey, the COVID-19 pandemic was a catalyst for many (58%) organizations to ramp up their technology investments sooner than initially expected. Now is the time to review these strategic investments and see what is working well and what needs to be improved.
 
One of the benefits has been a demonstration of where technology could be leveraged to improve systems and increase efficiencies. While 60% of HHS organizations reported that investing in technology would represent a moderate-to-high challenge for them during the next 12 months, this is still a worthwhile endeavor for many organizations. Successfully increasing efficiency frees up employees’ time and resources, allowing them to shift from more mundane tasks to spend more time on higher value work.
 
Explore partnership opportunities with other organizations
Now is the right time for organizations to look into opportunities for strategic partnerships. As organizations across industries determine where they fit into our evolving society and how they can best meet the needs of the groups they serve, the potential for mutually beneficial partnerships has never been greater.
 
Organizations should seek partnerships that allow them to leverage human capital, which has been further strained during the Great Resignation, as well as to reduce redundancies and introduce new offerings to their stakeholders. It may be helpful to evaluate certain key performance indicators, such as operating reserves and variations in funding mixes, to build financial models and better understand the resources that will be available and will be needed as they move forward. However, it is not just about the services being offered or the resources being shared – it is important to ensure that all parties are aligned around shared values and a common goal or mission.
 
Looking ahead
The past two years have shown us just how essential HHS nonprofits are to the communities they serve. To sustain their mission driven work, now is the time for these organizations to strengthen their financial health and reevaluate the impact of decisions made at the height of the pandemic on current operations.
 
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