5 Nonprofit Trends to Watch in 2013
4. Savvier donors
Because nonprofits are getting more savvy, donors are as well. In addition to an increasing demand for proof of outcomes, donors are slowly starting to understand the difference between two kinds of money in the sector: revenue and capital. They are starting to recognize that nonprofits cannot exist on revenue alone. Nonprofits must have infusions of capital every now and then to strengthen and grow their staff, technology, systems and fundraising. Call me crazy, but I truly believe that donors are becoming more open to making capacity capital investments in the nonprofits they love. That’s because donors are realizing that in such a stark economic environment nonprofits that don’t have adequate infrastructure simply will not survive, let alone be able to adequately address the social problems they were organized to solve.
5. Increased efforts to rate and compare nonprofits
As nonprofit outcomes are increasingly in demand, donors become savvier and the “nonprofit overhead” distinction diminishes, we will increasingly evaluate nonprofits based on the results they achieve, not on how they spend their money. But that requires a whole infrastructure for evaluating and rating nonprofits to emerge, just as it has for the financial markets. This has already started with Markets for Good, GreatNonprofits and the changes Charity Navigator has made to how it rates nonprofits. I think this market for nonprofit rating infrastructure will continue to grow and evolve as we get smarter about focusing resources on the most effective nonprofits.
These are exciting times for the nonprofit sector. It seems that for the first time in a long time everything is on the table. And it's up to nonprofits to understand the trends and where they fit as the sector evolves.
Nell Edgington is president of Social Velocity.