The New Non-Profit World

Over the past five to ten years several different factors compounded together to create a new world that non- profits now operate in.  The rise of online marketing and fundraising started to change how non-profits interacted with donors, made it easier to give, and allowed you to stay up to date by checking your email.  The doors opened to many new possibilities in online fundraising and fundraising management.

In 2007, when the economy started to go, and jobs became scarce, so did the donations.  According to Giving USA donations by individuals, corporations and foundations fell 3.6% from 2008 to 2009.  As the country sank deeper into a recession the more social services were needed on less money.  With a sour economy talk has been everywhere about alternate funding options and diversifying funding streams.  As mentioned in the Alliance for Children and Families’s Top Five Trends of 2010-2011, instability is forcing non-profits to work harder, provide for more clients, with fewer resources.

The Top Five Trends also points to other issues plaguing non-profits for more than the past year.  Non-profits are looking at what services they provide and evaluating what can be cut.  Filling the gap has pushed many in the field to merge, partner or collaborate on programs and projects.  This has been a major bonus to many communities – rather than acting as competition non-profits are actually pooling resources to continue to provide needed programs and services.

There has long been talk of what happens when the baby boomers start to retire.  Well – it’s happening.  Increased turnover as baby boomers retire and young employees move from one job to another makes it difficult to create much needed institutional knowledge.  Non-profits should be developing young employees to become the future organization leaders, and working on succession planning for when current leadership begins to leave the workforce.

With the economy uncertain and profits still going up and down, corporations and foundations are working harder than ever to ensure their grants and donations are being used as intended.  Higher scrutiny has made small non-profits struggle to keep up with the progress reports, audits and required outcome measurements.  However, more non-profits are now using outcomes measurements, evaluations and other tools to determine the success of their programs, not just to please funders, but also, to determine the usefulness of the program and whether it is worth continuing.  Those successful reports and data will help bring in ever more funding in the future.

As in any industry there are some who are not playing by the rules.  The end result being that affects the entire industry.  Greg Mortenson, author of Three Cups of Tea, is the most obvious example of ethical and accounting practice questions.  The fact that questions about the organization rose from donors, board members and staff is telling.  When something like this happens, it changes how funders, especially the federal government looks at organizations and how they will want to see evidence of their investment.

For the most part non-profits seem to be adapting well to the new rules of the road, the new world in which they operate.  While donations are expected to be up for the 2011-2012 fiscal year, and it appears many organizations are feeling better about staffing back up, there is still more to come.  With a couple hundred thousand non-profits at risk of losing their tax exempt status, and laws in various states looking at altering the laws governing non-profits, there are certainly more changes to come.  But there will always be someone to serve and someone willing to donate a little something.  While there is still a long road ahead to get past the recession, non-profits will still be needed, and replied upon, not just by program participants but by local communities and governments as well.

*Cartoon clip from Chronicle of Philanthropy June 2011


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