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.

  1. 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.
  1. 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.
  1. 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.
  1. 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.
  1. 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.
  1. 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.
  1. 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.
  1. 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.
  1. 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. 
  1. 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.

  1. Terri Barreiro Says: December 5, 2016 at 8:12 pm

    A great list Jim. A big one that is missing is the continued retirement of Baby Boomers particularly effecting nonprofit and government industries. That will add to the uncertainty caused by #5, 6 & 9.

    Those “people in the jobs” related changes will cause significant volatility in service delivery and donor relations.

    • James V. Toscano Says: December 5, 2016 at 9:25 pm

      Excellent addition. Thank you.
      The Boomers will have a big influence on the year’s changes in the nonprofit world.
      A survey a few years ago reported that a significant percent thought they would do something with nonprofits when they retired. If still the case, this will help with the added responsibilities in the sector. j

  2. Paul Verrette Says: December 6, 2016 at 4:06 pm

    I think you are right on with putting the change in government support and involvement at the top of your list. Housing and human services organizations have dealt with differing levels of government support over the years, on for a few years, off for a few years. This year feels different though, with a higher potential for bigger shocks to the shaky systems we have now.

    Great list.

  3. Paul Masiarchin Says: December 12, 2016 at 2:58 pm

    Thanks for sharing an insightful list, Jim. The topics you listed are definitely things I’m hearing, as well. Here are two additional themes:

    Continued acceleration of community engagement: Stakeholders are vocalizing a need for more engagement in decision making. From donors to clients and community members – individuals seek more involvement in the decision making and program delivery of nonprofits.

    Desire to reflect the community served: Nonprofit leaders are seeing the need to better reflect the demographic diversity of their stakeholders through changes in programming and board/staff diversity. This includes race, generation, ability, gender.

  4. One that I’m thinking about which may be related to #4 is, with the rise in social media and other technologies, will grassroots efforts look to incorporate as 501c3 structures, or will they be more organic (think Black Lives Matter and #nodapl). What does this mean for the “establishment” nonprofit sector?

    • James V. Toscano Says: December 21, 2016 at 8:02 pm

      Great point!
      I think it will vary according to the circumstances of each organization, its particular culture, its need for funds and its future plans.

  5. Heather Christopherson Says: December 21, 2017 at 10:26 pm

    Was just cleaning out some files out to prepare for 2018 and found a printed version of this. Had to take a moment to find this year-old blog to tell you that you sure were dead on with these. Happy New Year!

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