The nonprofit sector is constantly evolving, and it’s important for organisations to stay up to date on the latest trends to stay relevant and effectively carry out their mission. This year, we’ve identified several key trends that are likely to have a significant impact on nonprofits. From the increasing use of technology to a growing focus on collaboration, partnerships, and transparency, these trends will shape the way that nonprofits operate in 2023 and beyond. In this article we will cover 6 major nonprofit trends that will impact all organisations in the sector:
We’ll also explore a few of the tools organisations can use to stay on top of these trends throughout the year.
With the not-for-profit sector experiencing a strain on resources, collective action towards shared goals is increasingly necessary and beneficial for all parties. There are several examples of a growing trend towards collaboration and partnerships in the nonprofit sector, including:
AVPN’s example reflects another nonprofit trend we are seeing in the rise of funder and beneficiary input and collaboration throughout the funding process. As funders look to maximise the impact on their investments into social programs, there is a growing expectation that they will hear from sources on the ground, including the program’s delivery partners and beneficiaries. This ties into the second major trend of increased demands for transparency in the nonprofit sector.
The digitisation of nonprofit projects enables instantaneous collaboration and communication across borders, enabling teams with international operations to track and manage projects in real time. Data captured and analysed in real time is far more useful for decision makers and enhances the overall transparency of nonprofits, which is the next trend we have identified.
Transparency and accountability are becoming increasingly important for nonprofits for a variety of reasons. First, transparency helps to build trust and credibility with stakeholders, including donors, volunteers, and the public. By being open and transparent about their operations and activities, nonprofits can demonstrate that they are responsible and trustworthy stewards of the resources they are given. This accountability helps to ensure that nonprofits are using their resources effectively and efficiently to achieve their mission. By being accountable to their stakeholders, nonprofits can demonstrate that they are using resources appropriately, achieving results, and making a positive impact. This is essential for securing repeat funding in an increasingly competitive not-for-profit sector.
Transparency and accountability are also critical to good governance and risk management. Nonprofits are often entrusted with public funds, and a lack of transparency and accountability can lead to fraud, mismanagement, and reputational damage. By being transparent and accountable, nonprofits can minimize these risks and ensure that they are operating in a responsible and ethical manner.
A large children’s charity in the United Kingdom is a strong recent example of a nonprofit failing to act transparently. The charity, which provided support and services to vulnerable children, closed in 2015 amid allegations of financial mismanagement and poor governance. You can read the Charity Commission’s 2022 report on the incident here for a full breakdown of the event and its list of learnings.
In summary, it was reported that the charity had kept secret the fact that it was in financial difficulties and was on the brink of closure, despite receiving millions of pounds in government funding. In addition, it was revealed that the charity had an unusual governance structure, which made it difficult for trustees to fully understand the charity’s financial situation and make informed decisions. These incidents have a negative impact on the sector, decreasing public trust and raising the need for regulatory oversight which can place additional burdens on the operations of nonprofit organisations.
This example illustrates the importance of good governance, oversight, and transparency to ensure that charities are managed effectively and ethically. There have been a host of similar examples over recent years, but the scale and significance of this breakdown remains relevant as a warning against opaque not-for-profit governance. Most not-for-profits are now using dedicated software to manage their finances and projects in a more transparent manner, as advised by sector regulators. This software should be fully configurable, to meet the needs and expectations of regulators and the public as required.
Converging on the first two nonprofit trends, we have seen organisations diversifying their funding by increasing their reliance on government and corporate funders, and by developing relationships with these funders based on their transparency and accountability.
One way that nonprofits are increasing their reliance on government and corporate funders is by building relationships with these funders and demonstrating their ability to achieve results and make a positive impact. Such impact reporting typically involves providing detailed financial and programmatic reporting, and participating in regular evaluations and performance assessments. This is where digital solutions come in to play, as most of the funders are requiring frequent reporting supported by auditable financial management software and accessible online reporting portals. Enquire allows nonprofits to easily provide accurate and up-to-date information to funders, and to demonstrate their effectiveness and impact.
Another option for larger nonprofits who are looking to diversify their funding is the adoption of a pooled funding structure. Pooled funding refers to a funding strategy where multiple organisations or individuals contribute money into a central fund, which is then distributed to various projects or organisations. This can help nonprofits diversify their funding by allowing them to access a larger pool of resources from a variety of sources. Diversifying funding can also help nonprofits become less reliant on a single funding source and reduce the risk of losing funding if that source is no longer available. For a practical example, you can learn more about AVPN’s pooled funds here.
A recent report from the Centre for Effective Philanthropy found most nonprofit leaders and sector advocates agree that capacity building should be a top priority, and that funding that supports capacity building efforts has the most impact on their operations. In 2023 nonprofits should seek to obtain capacity building funding to obtain the following benefits:
Most of these benefits relate to the nonprofit trends of enhancing transparency and operational efficiency to match the current economic and regulatory environment. Nonprofit software such as Enquire is developed specifically to streamline the processes that improve nonprofit project efficiency and governance. The scalability of this software makes it a suitable choice for nonprofits of any size, enabling organisations to expand the reach of their programs sustainability.
Nonprofits are increasingly engaging in advocacy as a way to further their mission, and to create the systemic changes necessary to address the root causes of social problems. There are several reasons why advocacy is becoming more important for nonprofits:
There has been a sector wide drive towards utilising digital software to enhance not-for-profit productivity and performance. Digitisation ticked up in the nonprofit sector throughout the 2010’s with a huge boom during COVID-19 that doesn’t look to be slowing down. While this is a major trend with significant impacts on the way nonprofits manage staff and services, we think it’s critical to consider how this software relates to the trends mentioned throughout this article.
One of the major benefits of moving away from simple Excel spreadsheets and paper-based forms is an easier approach to ensuring nonprofit processes are transparent and easy to track. Not only does this help ensure nonprofit to complete tasks faster, but it enables nonprofit teams to generate reports with up to date information for their stakeholders. Some of the software features you should be looking for to manage nonprofit trends towards greater transparency, accountability and advocacy include:
Financial management: Nonprofits require software that can handle the financial aspects of their operations, such as budgeting, accounting, and financial reporting. This is important to comply with regulations and to demonstrate accountability to funders. For non-profits that manage or provide grant funding, Enquire can be used to track and manage invoices, integrating with financial management systems to process payments without leaving the system.
Program management: Nonprofits also need software that can track program activities, measure outcomes and impacts, and generate reports on program performance. This is important to demonstrate accountability and effectiveness to funders and stakeholders. Enquire uses a tiered hierarchy that maps to how nonprofits get work done. Our portfolio-program-project management features make it easy to track and manage goals and activities by:
Compliance management: Another important requirement for nonprofit software is the capacity to comply with regulations, such as tax laws and data privacy laws. This is important to minimize risks and maintain legal compliance. In Enquire user roles are used to determine access to information and permissions within the system, adding checks and balances to key processes.
Data analytics: Nonprofits need software that can analyze data and create actionable insights. This is important for decision making and for addressing the root causes of social issues. Data analytics solutions are not only important for matching the nonprofit trend towards transparency, but are also essential for making sense of their advocacy efforts. Nonprofits can make the most of their project data using Enquire’s configurable reporting indicators and impact reporting features.
Collaboration & Communication: Nonprofits need software that allows easy communication and collaboration among staff, volunteers, and board members. This is important to streamline workflows and to make sure that everyone is on the same page. This is especially true as nonprofits scale up their programs and develop partnerships with other organisations, governments and businesses. Key software features that enable enhanced collaboration and communication include:
Volunteer management: Nonprofits need software that can manage volunteer information, track volunteer hours, and generate reports on volunteer activities. This is important to manage and engage volunteers effectively. In Enquire this process can be handled using the in-system CRM.
In terms of nonprofit software specific to the types of projects nonprofits run, including grants and case work, consider the following software solutions:
Grant management: Nonprofit software can be used to manage the grant application process, including creating and submitting proposals, tracking the status of applications, and reporting on the use of grant funds. This allows nonprofits to effectively manage their relationships with grantmakers and to demonstrate compliance with grant requirements.
Disaster relief fund management: Nonprofit software can be used to manage disaster relief funds, including accepting donations, tracking expenses, and allocating funds to affected communities. This allows nonprofits to efficiently and effectively respond to natural disasters and other emergencies.
Scholarship and award management: Nonprofit software can be used to manage scholarship and award programs, including accepting applications, selecting recipients, and tracking payments. This allows nonprofits to efficiently manage their scholarship programs and to support the education and development of individuals and manage their awards programs and to recognize and support the achievements of individuals and organisations.
Case management: Nonprofit software can be used to manage case management, including tracking client information, managing appointments, and documenting services provided. This allows nonprofits to provide better services to their clients and to demonstrate their impact.
Contract management: Nonprofit software can be used to manage contracts, including creating, tracking, and managing agreements with vendors, partners, and other organisations. This allows nonprofits to effectively manage their relationships and to ensure compliance with legal and financial requirements.
Enquire is designed to reduce the administrative burden of doing good, while increasing your capacity to deliver social outcomes. Its enterprise business process capabilities enable non-profits to carry out their full range of management requirements. Designed to support and facilitate the relationships between non-profits and the organisations they partner with, Enquire has been at the forefront of these nonprofit trends for two decades.
If you’d like a personalised demonstration of the software with one of our experienced nonprofit implementation experts you can contact us here, or try a free demo of the system below.