The nonprofit industry, much like government, is experiencing a greater need to show impact, return on investment, and offer services faster, better, and cheaper. This can place a strain on the staff, require creative strategies for engaging stakeholders, and lead to tension between the mission and money to finance that mission. As you prepare for a career in nonprofit or nonprofit consulting, here are ten trends from BDO’s Nonprofit practice to consider:
Many nonprofit issues are becoming politicized and are polarizing donors, partners, and other key stakeholders. These stakeholders are increasingly being asked to “choose a side.” Many nonprofits have missions where they must navigate the tension between their stakeholders and their mission and offer the best services under increasingly politicized circumstances. Nonprofits that touch immigration, public health, race, and women’s reproductive rights are just a few that are touching hot-button political issues.
2. Budget Cuts
The nonprofit industry must make a business case to donors, show impact, and compete for funding. Nonprofits are facing the reality of trying to offer better or more services with less. Many nonprofits rely heavily on government funding and in the face of budget cuts, they face uncertainty as well as the need to diversify their revenue streams. Building a diverse revenue portfolio takes time and many nonprofits will need to consider their path to sustainability and whether they can rely on government money to help them meet their mission.
3. Mergers, Partnerships, and Joint Ventures
Nonprofits are considering mergers, partnerships, and joint ventures to help scale, serve customers, and better meet needs. The pressure to offer better services along with budget cuts are causing many nonprofits to consider options for advancing the mission.
Nonprofits, like government, may have legacy and outdated systems. Technology takes time to build and implement and can be an expensive investment. Nonprofits may not have budgeted for large investments in technology and while these investments could save them time and money in the long run, in the short-run the up-front costs may make technology too expensive to implement.
Cyber attacks are becoming more sophisticated and nonprofits’ data on their services and clients, donors, and other stakeholders could be a prime target. Many nonprofits are storing vast amounts of personally identifiable information (PII) and have not put in place the proper safeguards to protect against cyber attacks.
6. Engaging Constituencies
Social media and the growing number of millennials and digital natives becoming key constituencies and prime donors or volunteers are requiring nonprofits to consider how to engage various groups. Nonprofits must consider their digital strategies, develop content to attract various constituencies, and brand themselves on social media to engage these constituencies.
7. Charitable Giving Changes
The Tax Cuts and Jobs Act (TCJA) and the rise of crowdfunding have altered the landscape for giving. Nonprofits must consider how these changes alter their donor base and should be monitoring trends and adjusting course as needed. Nonprofits will also need to consider how to retain donors over time, how to potentially increase the amounts that donors give, and develop strategies for attracting other donors.
8. Employee Retention and Engagement
Recruiting and training employees can be expensive and as employees leave for other roles, nonprofits lose institutional knowledge, relationships, and skills along with that employee. As such, nonprofits need to ensure that they are hiring employees who are aligned with the mission and culture of the organization, are providing employees with the opportunity for growth and development, and are tying their work directly to the mission. Showing employees the impact of their work can help keep them engaged and committed.
9. Board Member Advocates and Developers
Nonprofits need to build better Boards. Boards should be comprised of individuals with networks, knowledge, and skills. Each Board Member should be tied to the mission in some way. While fundraising is an important aspect of Board participation, it should not be the sole role of the Board. Board Members should contribute to the organization in other ways such as marketing, advising, and advocating for the organization and mission.
10. Nonprofit Sustainability
As the nonprofit landscape evolves, nonprofits will need to consider how to evolve with the changing environment. Nonprofits will need to ensure that their mission stays relevant, that they are adapting to the needs of their clients/ beneficiaries of their services, and that they are providing a service that is differentiated from other nonprofits. Moreover, nonprofits need to be able to effectively message to donors, clients, and other critical stakeholders why their mission matters, how they are supporting others, and why their services are helping them to meet their mission.
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