Consider the facts: according to research from Zippia, there are 1.5 million non-profit organizations in the United States, employing 10% of the total workforce, which is the third-largest behind retail and manufacturing. $499 billion was donated to charity in the US during 2022. Impact research expert HolonIQ recently stated that philanthropic private foundations “have invested over $100 billion in grants and ventures with education attracting the majority of that funding.”
So, the scale and opportunity for non-profits is considerable moving forward. However, running an effective non-profit organization is not an easy task. It requires a tremendous amount of business acumen combined with strong networks, persuasive marketing, and a genuine passion for the cause that is to be the beneficiary.
Non-profits must compete for time, money, and attention with conventional businesses focused on traditional commercial success and bottom line profits. In order to do so, non-profits are constantly evolving with the times, and that’s why we thought we’d use this article to unpack ten key trends emerging in the non-profit world and hopefully share some insight that can be helpful to organizations working in the space.
10 Key Trends Emerging in the Non-Profit World
Let’s explore ten of the key trends that are playing out amongst non-profit companies globally and how organizations can leverage them to their advantage.
1. Partnerships are Becoming Crucial to Drive Change
One of the common criticisms leveled at the non-profit sector is the number of different organizations that are all tackling similar issues but trying to do it in their own way, which results in disparate funding that doesn’t really move the needle. There’s an element of truth in this, and that’s why partnerships have become such a crucial part of what makes a non-profit mission tractable in our modern world. Non-profit companies need to work with peers who can offer different capabilities and access different networks so that the resources can be allocated in a precise and concentrated way.
Being able to leverage each other’s strengths makes for more impactful results and a greater sense of community along the way.
2. The Adoption of New Technology Matters
As we’re seeing in every industry, technology is often the key catalyst for disrupting and advancing the status quo when it comes to effectiveness and efficiency. It’s no different in the non-profit space as technology across a wide range of functions has really made its mark on how these organizations operate. Whether it’s to streamline fundraising, manage resource allocation, improve hiring, enhance services/offerings, speed up operations, or transform internal and external communications, the non-profit companies that are adopting new technology and making it work for them are the ones that are going to thrive.
3. Transformational Giving is on the Rise
As more and more scrutiny has been placed on the impact that non-profit organizations are having in their communities, many donors have started to be much more selective about what and how they give to the causes that they care about. Instead of a more haphazard method of disbursing funds, many philanthropists are focusing their efforts on giving an amount to an organization that can not only meet their needs but transform the way they operate – so as to improve the actual impact that happens on the ground.
For non-profit companies who are lucky enough to be on the receiving end of this, it’s important to understand what this means for their organization so that they can use these transformational gifts as a catalyst for the next stage of what they’re trying to achieve.
4. Social Enterprise and Impact Investing Continue to Thrive
Another trend that is having an impact on non-profit organizations is the continued rise of new investing mandates and philosophies that focus less on bottom-line profits and more on impact. To service this demand, a new type of organization has emerged, the social enterprise, which has an underlying cause that remains its mission, but operates as a for-profit company to ensure sustainability.
This movement, combined with impact investors who seek to make ethical and impactful returns that also benefit communities around the world, represents an exciting new realm of innovation for organizations who want to do good, both for-profit and non-profit. There is space for all types of social benefit companies, and this diversity is critical for a healthy ecosystem.
5. Flexible Work is Here to Stay
As with so many other industries, the future of work does seem to be a hybrid one, with employees retaining more flexibility about how and when they work. By shifting the expectations from a time and location-based perspective to one focused on outcomes, people can carve a work-life balance that is healthier, more sustainable, and (in many cases) more productive. Non-profits need to embrace this change as it’s the only way they’ll be able to compete for talent in a competitive marketplace.
6. Non-profits are Being More Intentional about Recruiting Diverse Boards
The social consciousness related to diversity continues to progress, and efforts to ensure inclusion and equity are more top of mind than ever. Non-profit organizations acknowledge that having diverse backgrounds and perspectives represented on their boards gives them a competitive advantage in terms of connecting and relating to the communities that they serve. Being intentional about this and structuring the hiring and retention strategies to reward diverse points of view is how an organization can stay relevant and ahead of the curve, while also providing opportunities to those that have previously been underrepresented.
7. Non-Profit Companies are Facing a Myriad of Hiring and Retention Challenges.
In any organization, the quality of your staff is going to have an outsized impact on how you perform. As such, non-profit orgnizations are striving to make the best hiring decisions that they can in order to maximize their human capital. But it’s a very challenging market out there. There is a lot of competition for top talent and convincing someone to steer away from traditional compensation-focused roles and towards something that may be lower paid, but focused on a specific mission, is not an easy task.
However, non-profit companies need to face up to these challenges and craft their hiring and retention strategies intelligently to compete. Often success here comes down to improving the brand storytelling, benchmarking salaries against the market, focusing on additional perks that improve work/life balance, and delivering a great employee experience that keeps people once they’re in. By combining all of these, non-profits can navigate the challenges and put themselves in the right position to progress.
8. Non-Profit Companies Must Remain Optimistic Amongst Economic Uncertainty
The effects of the pandemic still live on and the macro-economic environment remains somewhat uncertain as a result. Non-profits typically struggle in uncertainty because donations tend to be the first expense that people will cut when they are contracting their spending. However, the non-profit companies that are going to survive are those that can remain optimistic in these times and find ways to fill those gaps through innovative funding initiatives.
Whether it’s adding value to the offering, changing development tactics, exploring new channels, evolving the marketing strategies, or a range of other fixes – there has to be a belief that things will work out and the cause matters enough to fight for it. This attitude can allay concerns within the team and encourage everyone to look for opportunities to grow, expand, and adapt to changing circumstances.
9. Hybrid Events are Emerging as the Way of the Future
During the pandemic, professionals in all industries got used to doing everything via video-based meetings. They would meet virtually because there were limited other options, and while this diminished the experience in some ways, it also brought with it clear benefits. The most important of which is the fact that for-profit and non-profit organizations could now expand the reach of outreach and events beyond the constraints of geographies. Specifically for a non-profit organization, a fundraising event could now have global relevance rather than being restricted to who could attend in person.
With the current full-scale return to in-person events, non-profits should retain that virtual aspect to widen the potential audience and allow for different modes of engagement. It takes skill to run a hybrid event well, but it’s the sort of thing that can really accelerate growth if taken seriously.
10. Non-Profit Companies Need More Staff and Financial Support
This is not exactly a revolutionary piece of insight, but the sentiment is still true across the non-profit sector, and it’s worth mentioning in closing. Limited staff and financial resources remain the most significant bottleneck to non-profit companies achieving what they are capable of. Without the financial levers available to most for-profit companies, these organizations must compete for talent and resources using a range of other strategies that appeal to the mission and cause that they’re fighting for, while doing all they can to sustainably provide the fairest workplace, compensation, and benefits they can afford.
The non-profit companies that can unlock better talent and more funding are going to find that the extra impetus is going to place them in good stead for the next few years in a constrained funding environment.
By getting on the right side of each of these trends, a non-profit organization can position itself effectively and enable more robust and reliable long-term growth amid uncertain economic conditions.
In summary, non-profit organizations face several headwinds currently, but that doesn’t mean that the growth opportunities are not there. The most significant challenges relate to recruiting talent and fundraising because of the enabling factors that those key assets bring to a non-profit business model.
Here at The Renaissance Network, we can definitely help with the team-building piece – helping non-profits to attract, hire, and retain the best people that they can under significant resource constraints. If this is something that you’d like to explore, please get in touch today, and let’s see what we can do to help you elevate your human capital for the long run.