Five Key Trends Nonprofits Must Adapt to in 2017

Morgan Carey, Nonprofit Industry Marketing Lead

February 6, 2017

With more than 1.8 million nonprofit organizations operating in the United States alone, providing 5.4 percent of the nation’s entire GDP, the nonprofit sector has increasingly proven itself as a key player in today’s business landscape. Similar to the for-profit sector, this strong presence and reach also comes with complexities. As a new year unfolds, it is crucial to stay informed on key trends and evaluate what shifts organizations must make to not only stay afloat, but truly accelerate progress against their missions.

Here’s what we see as the five most important trends for nonprofit organizations in 2017.

To start, every nonprofit must behave like a start-up. From social media fundraising to predictive analytics – nonprofit business models are changing every day. This unfortunately means that there is no room to get comfortable in traditional business processes(opens in new tab) and the status quo. Today’s donors expect an Amazon-like donation experience and expect real-time results about how funds are being used and where the organization is seeing impact. In order to keep up with this constant innovation and become a truly make a difference, nonprofits need to stay adaptable, agile, and creative.

Now is the time to debunk the Overhead Myth once and for all. In addition to staying ahead of innovation, nonprofits and the donors who fund them need to let go of outdated conceptions around overhead costs. It makes sense that donors have vested interest in how their money is being used in the organization, but it doesn’t make sense to assume that the nonprofit they’re supporting can run successfully without spending portions of these dollars on core infrastructure. Instead of viewing overhead as an unnecessary expense, nonprofits and their constituents need to start reimagining these costs as core mission support(opens in new tab)

Finance and fundraising must operate as one. Traditionally finance is focused on compliance, while fundraising is focused on relationships. Both are equally important to mission success, yet often function separately – leaving leadership confused about the true financial status of their organization. In order to bridge this gap(opens in new tab), the teams must take advantage of each other’s strengths, unify reporting operations, and work in harmony for the greater good.

Turn cluttered data into a message. Often when these internal gaps between teams exist, it is due to lack of data transparency. Many nonprofits have confronted the difficulties of conducting data analysis manually, making pulling reports was a daunting task. Now, technology innovation gives the option to use data for good(opens in new tab), and consolidate it into a full, fool-proof picture of organizational health.

The new FASB standards mean increased financial transparency for all. While a change to standards can be unnerving, it often proves beneficial in the long run. The set of changes that the Financial Accounting Standards Board (FASB) is applying is no different. Phase 1 plans to help nonprofits tell their financial stories(opens in new tab) in a way that is easier to analyze – specifically around net asset classifications, liquidity, and recording of expenses.

The nonprofit sector serves a diverse array of constituents, but one thing remains consistent – their passion and success at affecting change in our world. While organizational shift can be unsettling, nonprofits have an immense opportunity to embrace the innovation at hand and use it to maximize their social impact in the new year.

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