This month we talked about the biggest nonprofit trends we’re seeing. While some trends have been simmering in the background for quite some time and are now rapidly gaining steam, others are brand new to the nonprofit world.
Find out what’s going on the frontlines of nonprofits across the country right now to better strategize for next year:
As nonprofits find more uses for AI, they are discovering new ways to interact with their audiences, generate content, automate time-consuming processes, and use data to drive decision-making. Some people have described this transformation by saying that AI is helping nonprofits to unlock their true potential to change the world faster than we ever thought possible. However, even that might be an understatement because in many ways AI is enabling nonprofits to do things that we never could have imagined that they would be able to do at all!
This organization closed six months later.
In our sector, we are not rewarded for admitting our struggles. We are not rewarded for rapid cycle learning, failing forward, or innovation. We aren’t even rewarded for partnering. Instead, the sector is fueled by what I might call the 99% success rate fallacy that goes something like this – “Dear Funder, We have a unique approach compared to every other organization you might consider funding. What we are doing is nearly always working for nearly everyone we serve. Please give more.” In short, we are rewarded for presenting solid proposals that project that we are unique, have it all under control, and we are excelling on all fronts. We simply need more money. After 30 years of leading and working in nonprofit organizations, I finally have the courage to say this: We are not all that unique, everything isn’t always under control, and we are rarely excelling on all fronts. Adequate funding is one essential piece, but that is not enough. We need to explore different strategies if we want to thrive organizationally, and more importantly, have greater impact collectively.
While all executives across for-profit and nonprofit entities are susceptible to burnout due to the importance of their role, nonprofit leadership has the added risk factor of the personal toll that nonprofit work can take in the form of compassion fatigue to consider as well. (Additionally, nonprofit leaders in interim roles or on consulting engagements often work more than they bill, which only adds to their vulnerability to burnout.) These factors add up to a perfect storm of physical and mental health challenges for nonprofit Executive Directors.
By adopting proactive risk management practices, nonprofits can improve their organizational resilience to better sustain their impact in the face of an increasingly complex economic and operational landscape.
As a result, many organizations are beginning to seriously evaluate what kind of measures can reduce turnover among nonprofit executives.
Afterwards, we noticed the people we were talking to had begun to ask deeper questions like, “How do you know if a nonprofit board is doing a good job?” It seems that article helped nonprofit leaders, board members, and major donors to start thinking more critically about what they should look for in determining if the board they are connected to is being run effectively and accomplishing the organization’s mission. They wanted more information about what they should be on the lookout for – what kinds of red flags might signal an underlying culture problem or what kinds of signs indicate that the board is going off track.
A traditional analysis looks at inputs like fundraising expenses and operational costs and outputs like the number of people served and geographic area covered. The goal is basically to understand how the organization is using its funds to do something beneficial. This approach works if the output is something with a clear monetary value like scholarships granted or number of meals served. However, that approach seems to fall short when attempting to measure the “unquantifiable” impact a nonprofit has on its community – things like reducing isolation, giving community members a voice, offering mentorship, preventing violence, providing acceptance for marginalized groups, or reducing homelessness. Therefore, a true analysis of a nonprofit’s impact needs to include an evaluation of their Social Return on Investment (SROI) also.
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