2017: Ten Non-profit Trends
2017 is shaping up to be a watershed year for non-profits. Major change looms, especially in government policy, where government discretionary spending will go down, tax policy will change and health care and other social services will get major rearranging.
These changes will affect the private sectors -the for-and non-profits- in varying ways but with opportunity for growth and greater service.
- Sector shift will continue. Government will both get out of some direct services and cut funds traditionally flowing to non-profits. Non-profits will be called upon to fill gaps left by these changes. B-Corps and other double and triple bottom line for-profits will also get involved, fueled by a rapidly growing impact investment market.
- Changes in tax policy will affect charitable giving. Corporations will retain more profits, and more disposable income will be available to middle and upper middle classes. The jury is still out on the how much benefit will be bestowed on the very rich. Tax deductions, however, will be limited. Regardless, this will create new opportunities and differences in the donor marketplace.
- Changes in health care and social services will shift to the for- and non-profit sectors. The extent of decentralized financing and subsidization of those who cannot afford services and care will determine the “load” that non-profits will be expected to carry. It will, however, increase dramatically.
- At the same time, non-profit advocacy will shift from government to general and special publics. This change in focus will involve decisions on whether to motivate publics to support policy change or to increase direct financial and other support to non-profits.
- Major changes in non-profit leadership will accelerate. With all of the above changes going on, recognition will grow for a need for different types of leaders to take on the increasing role expected of non-profit organizations.
- Fuller employment will result in pressure on wages. Nonprofits will have even greater challenges in retaining high performers. Inflation and higher interest rates will also have an effect on the sector.
- Donor demands for impact and scale will motivate mergers and reliance on larger non-profits. With all of the programmatic shifts to nonprofits and the need to increase resources, nonprofit organizations will also need to meet new standards for giving by foundations, corporations and a growing number of major individual donors. This will include more sophistication, not only in reporting impact, but in achieving ever-increasing quality and quantity of impact. This will lead to consolidation of resources flowing to the efficient and effective larger-scale providers.
- Capital needs will increase, especially among the larger non-profits. Given the potential shift to nonprofits and the double and triple bottom line for-profits, there will be greater capital needs to provide the infrastructure and facilities to provide services. Capital campaigns will increase, with the natural advantage going to well-established larger organizations in our sector.
- Development professionals will turn over at a more rapid rate. These shifts will also produce more dislocation in the development field, where competition will become white hot. Development professionals will leave the field, others will jump to better situations and “switchers” from the other two sectors will be recruited. Hopefully, CEOs, Boards and Development professionals will all work together for a more functional system, which would stabilize turnover.
- An atmosphere of instability will exist for the entire year. Change always produces this flux; with leadership and courage, the sector will not only survive, but survive significantly. And with Mission in focus, the nonprofit sector will see this as opportunity to better serve our citizens, bringing greater benefit to society.