Ten Predictions for the Nonprofit Sector in 2012

 Post by James V. Toscano

• Our total number of nonprofit organizations will increase. The number of 501 C(3)s going inactive or out of business will also increase. This is normal in this dynamic sector. What will be telling is that the numbers in both areas will increase dramatically. With more people marginalized, boomers who want to start new and novel nonprofit organizations beginning to retire, and the supply of idealistic young people interested in work in the sector increasing, a boom in new nonprofits is underway. At the same time, an increasing number of nonprofits will not have sufficient financial resources to continue as they have in the past and will seek other options.

• More nonprofits will restructure, reinvent, merge, collaborate or die. Organizations will choose such alternatives given the growing changes in societal need, the increasing rate of resignations or retirements of executive directors, the decreases in government function as well as funding , and the declining and narrowing support of major donors.

• In an election year, competition for donations between political and nonprofit sectors will intensify. Intra-sector competition in the nonprofit sector will also intensify. Nonprofit total revenue will remain relatively flat. With unequal distribution of resources, which is also normal, the “have’s” will be more successful than the “have-nots.”

• Significantly more young people will seek to find employment in the nonprofit sector. More will major/minor in nonprofit studies in their undergraduate programs, leading to an inspired and talented labor pool. Many will want to start their own nonprofits. Others will matriculate in graduate nonprofit management programs, which are also increasing.

• Social entrepreneurship start-ups will bloom, with mixed results. The need for resources will lead to leverage of nonprofit organizational experience to create businesses within the group or as subsidiaries. Outcomes of this trend will vary, largely according to all of the same elements necessary for a successful for-profit.

• Impact measurement will burgeon. Metrics will occupy a more central place in an organization’s toolkit, with results and cost per unit of result becoming important variables in the determination mix of funders .

• Efficiency, economy, efficacy and elimination of duplication will be required by the donor community. After measurement of impact, the requirements of funders will expand to other variables, often on a comparative basis. The ineffable will not count in an increasing empirical environment.

• Experienced executive directors will be in short supply. Boards will take more chances on retired, inexperienced boomers as well as much younger candidates. Boards themselves, reflecting similar changes in demographics, may become more important in the overall management of the organization. A consulting boomlet in coaching and mentoring will be a consequence of this decision-making.

• Experienced development officers will attract premium compensation. Emphasis to find resources needed to ensure delivery of public benefit will escalate, resulting in greater numbers of development positions, many in the major gift officer, special events and social media ranks. The search for new constituencies will focus on changes in demography as well as digital avenues of communication. Prospecting for new cohorts will become more and more dependent on electronic communication and cultivation.

• Management will be redefined. A digitally connected society, mobile networking, increased definition of relevant stakeholders will lead to a flattening of management structures. Organizational dynamics will dictate radically different approaches to service, focused on meeting needs of specific populations, with “needs” defined by those served. These trends will require dramatic changes in the way organizations are run and how management is taught in our graduate schools.

Copyright 2011, The Good Counsel, division of Toscano Advisors, LLC. May be duplicated with citation.

---