Nonprofit 2014: The Year Ahead
A Post from James V. Toscano
Change for nonprofits is constant. Yet, the nonprofit world will see certain changes accelerate in 2014. A number of forces building over the last decade will reach tipping point and will come to dominate aspects of the sector.
With nearly a million nonprofits, variation is enormous. What are focused on here are the modal factors that will have significant impact on the sector.
We will list only ten, plus one speculation. There are many more, and your comments and additions will make this a much better attempt to characterize our sector in 2014.
The Ten:
1. Millennials. According to the Department of Labor, these younger workers will constitute over 50 % of the nonprofit labor force in 2014. They will reach that status for the entire labor force in 2015. With more than half our workers “young,” what are the implications? And our potential audiences, constituents, clients, and members will also be young. Do we need to change our approach, our methodologies, our communication modalities, our processes and our employment practices?
2. Leadership Retirement. We’ve been anticipating this succession of upper level management for 5 years, ever since survey reports indicated this intention. IRAs and other investments have finally caught up and surpassed 2008 levels for many, so the succession process is on. What will be missing? What will we gain? Where will the retirees go? Will they really retire or just take another position? Where will we find successors? Will there be an emerging leader deficit?
3. Engagement/ Morale. Recent studies report less than full engagement of nonprofit employees in their work. In fact, one study showed average engagement of only 31%. Combined with growing reports of nonprofit worker burnout, the status of our workforce will become a major area of attention for nonprofit management to improve worker satisfaction, efficiency and effectiveness. Morale becomes a central focus in 2014. What do we do to improve it?
4. Emergence of the Volunteer. A coming together of a variety of vectors will lead to significant appreciation of the importance of volunteers as high probability donors, skilled participants in the work of the nonprofit, and those enabling the staffing of important services. How do we attract the skilled boomers to our cause? What about the young jobless? Is there a way to transition them through volunteer and paid internships?
5. Women as Majority Constituency. As major donors, as top management, as foundation heads, as board members, as significant constituents, women have emerged as the majority engine driving the nonprofit world. Recognition of the importance of this will refocus elements of program, fundraising, governance and communications content. What changes will accelerate? How are women altering patterns of giving, decision-making, focus, caring?
6. Mobile focus. No longer the source of $10.00 hot responder donations, the digital world will command major attention, not just in websites and social media, but also in active building of community. Crowdsourcing and other methodologies to accumulate resources via the Internet will quickly proliferate. Google+ will emerge as a major nonprofit tool. How we adapt to this challenge may determine our future. How will we build our online “community?” How will we keep up in terms of expertise and funding with this digital revolution?
7. Measurement. Data, big and little, and its sophisticated statistical interpretations, will take center stage in the evaluation of performance. Yes, stories and anecdotes will continue to be vital. Measurement, especially among large donors, foundations and corporations, will trump all else. Metrics will become comparative using standardized variables. How do we develop the expertise required? Where will the funding to do this come from? Can we really measure the ineffable?
8. Collaboration. A subtle switch from external funding forces pushing collaboration to internal agency motivation is occurring. What kinds of collaboration will be in the self-interest of nonprofits? Starting with back office sharing, trust may build to the point of program, even development, co-ordination and cooperation. Will merger become an obvious win-win for some agencies? What about inter-sector collaboration, say between a for-profit company and a nonprofit going well beyond cause marketing? The possibilities for more efficiency and effectiveness are endless.
9. Taxes. Many nonprofits already pay service fees to local, county and state governments. Sewers, police and fire, PILOTs, and permits to fundraise in many states are some of the areas in which payments are made. These will continue to proliferate and increase in cost as nonprofits emerge as a major untapped source of tax and fee revenue. Donors, especially major ones, are paying heftier taxes and anticipate even higher ones, especially to pay federal income tax for universal health care. Both of these taxing trends will have a major effect in 2014. How can we mobilize against some of these service fee increases and extensions? Is it in our interest to campaign for lower-income taxes and full deductibility for donations? Must we break out of the small circle we consider major donors and find new areas of wealth to cultivate?
10. Development Redux. The development function has been in disarray for years, reaching its lowest point in 2013. There is only one way to go, one would hope. Tenures will finally start edging up as boards, EDs and development staff reach explicit understandings about who does what.
The focus necessarily will shift in 2014 to donors and their needs. Novel approaches to widening the circle of prospects will emphasize successes of the agency in the context of more disparate values of potential donors. Will agencies find the development talent needed rather than the same-old, same-old crowd? Will the insights of neuro-marketing finally be integrated into the mainstream? Will training programs actually train in the realities of the process?
Speculation: It seems to the author that the boundaries between sectors, for-profit, nonprofit and government, never really rigid, are starting to give way to overlapping and intense competition in more and more areas. Certainly, we’ve seen overlapping for years between nonprofits and for-profits in some areas, e.g. fitness facilities, with consequent calls for stringent enforcement of UBITs. Now, there is increasing demand that nonprofits need to be more business-like, organize for-profit subsidiaries and team up with businesses. And businesses are looking to traditional nonprofit areas and forming B Corps, selling Social Benefit mutual funds, bidding for government contracts in such areas as public welfare programs and offering investments in triple bottom-line companies. Combined with the thrust toward finding innovative solutions to societal problems, regardless of the sector involved, might we all be experiencing a metamorphosis into very different patterns and organizations? Might this be helpful in the achievement of societal benefit?
Please send your ideas, suggestions and solutions along with other trends emerging.