2018: Ten Nonprofit Trends
By Jim Toscano and Dania Miwa
What a year 2017 was! Many of the trends outlined here prevailed through the year. Now, prepare for an even more unsettling, disruptive one.
- Change in individual donor strategy as the tax laws change. With fewer individuals expected to itemize under the provisions of the new tax law, new strategies will guide resource developments attempts to renew and expand previous donations. Donor retention and stewardship will take on new messaging emphasizing the donor. Donor cultivation and solicitation will also need to be more substantive, more-values based and more outcomes oriented.
- Change in donor assessment as the tax laws change. Donors from high tax states may feel poorer, less able to give. Donors of high net worth, even in high-tax states, may have more disposable income, but will they think of giving as potential purpose for their new income? Nonprofits will develop strategies to create exciting personalized experiences and opportunities to attract funds for impact change.
- Foundations will have more revenue as a result of changes in the tax laws. With the markets up, with corporations repatriating cash and using it for dividends and buy-backs, Foundation investments will grow, and will the required pay out. Nonprofits will focus more attention on creative asking strategies.
- With changes in the tax law, corporations will have more disposable revenue. Nonprofit development programs will intensify efforts to motivate businesses into more giving through partnerships, sponsorships and creative experiments through their employees.
- Given changes in the tax laws, major emphasis will focus on small businesses and owners. Opportunities for participation and for experiences in the work of nonprofit organizations will increase in an attempt to engage business people in the exciting work of social change, artistic creation, scientific invention and experiential learning characteristic of the work of nonprofits.
- Reductions in federal spending will result in more intense competition for existing government grants. Such reductions will force organizations to search for other, private funds, form partnerships, merge, reduce services and staffs, or otherwise reduce their contributions to society.
- Furthermore, federal policy will result in less state and county funds available, not only from block grants but from intense pressure on state and local tax revenue, most of which is no longer deductible on federal forms. Over time, reduced government and nonprofit services will result in fewer individuals receiving vital social, educational, training, medical and related services, the extent of which dependent on the ability to raise revenue from private sources, innovations in service delivery and new substantive solutions and cures for those conditions needing societal intervention.
- Nonprofit organizations will focus increased time and resources on social impact investing, creation of for-profit subsidiaries and other forms of social entrepreneurship. Depending on the ability to repay program-related loans, or to pay dividends from a subsidiary, mid-level or large nonprofits will increasingly use these forms of funding to continue their Mission work.
- Nonprofit organizations will undergo a major reconceptualization of donor relations. With major need shifted to individual donor decision-making, nonprofits will expend significant thought and effort to rebuild and restructure relationships activities to build strong individual private constituency.
- Nonprofit management training will be transformed. Charismatic and traditional leaders of nonprofits will be succeeded by leaders trained in running organizations effectively and efficiently. This will involve advanced training, preferably in MBA-type training that emphasizes analytics, superior writing training, astute financial planning and overall commitment to the values and mission of the nonprofit.