A digital-first shift is changing how nonprofits operate | ZDNet

According to the 2021 Nonprofit Trends Report by Salesforce.org, the issues that were of greatest ongoing concern for global nonprofit employees included:

• Controlling expenses
• Adapting to remote/virtual programs
• Hosting in-person events
• Implementing new technology tools and solutions
• Hosting, creating content, and promoting virtual/online events
• Retaining volunteers
• Changing the size of the organization to meet increased demand for services

Although most of these challenges will exist in 2022 and beyond, the nonprofit organizations managed to achieve over 75% of their goals across program delivery, fundraising, diversity initiatives, and even staff wellbeing and retention. 

Salesforce interviewed nearly 1,250 respondents around the world for this report on the current status of nonprofits. Here are the 5 key takeaways of the 2021 Nonprofit Trends Report: 

In Diversity, Equity, and Inclusion, Perception and Reality are Disconnected

The nonprofit trend reports found that diversity, as well as mental health and wellbeing, are important topics across all business sectors. While 87% of the respondents rate the importance of ensuring gender and racial diversity across all levels of the organization, 61% say their organization has made commitments to advance DEI. This also includes the issue of executive diversity.  Only 38% of executives felt their boards represented the communities they serve, and 66% expressed dissatisfaction with their boards’ racial and ethnic diversity. The trends report did note that 49% of nonprofits said that over the past 12 months their organization has changed its approach to DEI and 85% said they met or exceeded their goals in this area.

Nonprofit Staff Face Increased Challenges with Mental Health

According to the trend report, 32% of all nonprofits surveyed said ensuring the mental health and wellbeing of their employees was a major issue for them over the past year, with 38% of nonprofits with revenues of more than $10M rating it a major issue compared to only 28% of those with revenues below $1M. 

Mental health and wellbeing can significantly impact employee churn, and nonprofit staffing has gone through a sea change at every level. C-suite turnover at U.S. nonprofits is at an unprecedented pace.  According to research by Luntz Global Partners, 56% of U.S. adults with employer-sponsored health benefits indicated that liking their health coverage was a key factor in staying at their current job.  Seventy-six percent of respondents said their nonprofit offers support services to help with mental health and wellbeing

The Workforce Is Facing a Historic Shift in How Work Gets Done

Remotely managing employees and volunteers was a major issue for one-third of organizations this past year. And, it’s not projected to get easier, with 84% of respondents saying it will remain a challenge or become increasingly more difficult over the next 12 months. Coupled with the fact that 85% of those surveyed say staff retention will continue to or increasingly become a challenge, organizations will need to face this issue head-on. 

Staffing and bridging the skills gap are top challenges according to the trend report.  One-third of organizations changed their size based on the increased demand for services while nearly another third (30%) changed their size based on reduced demand. Nearly one-third of nonprofits (30%) reported laying off or furloughing staff over the past 12 months. Of those who had to lay off or furlough staff, they reported an average workforce reduction of 30%. COVID-related lockdowns in the U.S., U.K., and Australia likely spurred this spike.

In the U.S. alone, 86% of respondents said going virtual was likely (above the global average of 78%). The report found that 79% of respondents said it was likely their organization would outsource jobs in the next three years.  A majority of nonprofits (79%) expect to implement widespread usage of artificial intelligence (AI) technology in the next three years to enhance the remote work experience. Today, only  34% reported always making decisions based on data and evidence as well as designing programs and services using information about and engagement with recipients. And 69% find sharing data across departments to be difficult. 

A digital-first shift is changing how nonprofits operate. Seventy-six percent of nonprofits said they need to develop a data strategy for their organization and those with a high digital maturity are 1.4x more likely to acknowledge this compared to those with low digital maturity.

Within three years, the majority of nonprofits surveyed expect to be doing the majority of their work online. This potentially includes outsourcing jobs, relying on technology to run their operations instead of people, and fundraising 100% online. To accomplish this feat, their adoption of technology and data acumen must hasten.  This monumental shift to a digital-first approach will likely dramatically change the nonprofit sector landscape: testing the donor journey, evolving from peer-to-peer and in-person events, offering donors access to information on-demand.

Fundraising and Marketing Are Changing Permanently

Globally, organizations use individual donations to keep themselves afloat, with 50% of respondents attributing individual donations as a major or significant contributor to revenue generated over the past fiscal year. Donors also want to see evidence of progress being made. Seventy-two percent of respondents say their donors expect remote access to key impact performance metrics (KPIs) and the same percentage have plans to show real-time KPIs on their website within the next year.  According to the report, many organizations are being more transparent, with 31% saying that over the past 12 months they’ve provided existing and prospective donors online access to a dashboard showing impact measurements of their donations in action. Of those who have made this change, 86% say it was impactful.

Digital channels are the linchpin to future marketing and fundraising success.  While 36% of respondents said delivery of remote, virtual, and adapted programs was a major issue they’ve faced over the past year, that task seemed less daunting at organizations with smaller revenues. Forty-two percent of respondents in marketing roles said staff at their organizations have built or explored the development of supporter journeys through connected experiences between web, social media, email, etc. Additionally, 38% of those marketers said they adjusted their social media strategy with new platforms like TikTok and changes in content strategy. Organizations with less than $1M in revenue embraced these approaches more than those with larger revenues. Of those who made the shift, 86% reported the change to have been impactful.

Marketing spend is going digital.  When it comes to marketing changes, 27% increased digital ad spend, and 36% built or explored the development of supporter journeys (connected experiences between web, social, email, etc.) over the past year.  Thirty percent of marketing respondents said they began using technology and data to create donor profiles over the past 12 months with 90% reporting it to be impactful.

Nonprofits Are Concerned About Expenses, Yet Outperformed in Fundraising

The top challenges that nonprofits faced were similar to those across almost every industry, with the biggest challenge being controlling expenses. Eighty percent of respondents still rated their organization’s fundraising efforts as more successful than other nonprofits and 77% rated their marketing efforts similarly.

The report concludes with some good news – on average, one-third of large- and mid-sized nonprofit organizations exceeded the goals they set out to achieve in the past 12 months. The report also notes that to create success, nonprofit organizations must try new approaches to their current processes, then measure their successes and recalibrate as needed.

To learn more about the 2021 Nonprofit Trends Report, you can visit here.