5 Ways the Nonprofit Sector Has Changed Over the Past 20 Years
Editor’s Note: This November, NonProfit PRO is celebrating its 20th anniversary. To mark this momentous occasion, we are talking to nonprofits whose roots also span two decades to take a deep dive into how the sector and their organizations have evolved — and what other nonprofits can learn from their success.
Over the past 20 years, so much has changed in the world at large, but also in the nonprofit sector specifically. As we look forward, it’s important to recognize those changes and what they mean for the sector’s future.
To learn more about the transformation of the sector, NonProfit PRO spoke with Chris Needles, chief development officer at Wounded Warrior Project, which is celebrating its 20th anniversary this year.
In this interview, Needles highlighted the ways the sector and major giving in particular have changed over the years, and what nonprofit professionals should keep in mind as they work toward their organizations’ missions.
1. Organizational Management Styles
One of the biggest changes in the sector overall has involved the evolution of how organizations are run and managed, trending toward a more professionalized approach, Needles said.
“I think that there’s consensus around the fact that nonprofit organizations should hire experienced talents to run their organizations, even if it’s spending a little bit more than some donors might want their organizations to spend,” he said.
For the Wounded Warrior Project, that's certainly been the case.
“We have some incredible talent; we have some very dedicated teammates that have been with us for 15 or more years,” Needles said. “But the infusion of new leadership and new talents, and a more professional approach to serving our warriors, and focusing on our mission has really helped propel our success and longer term sustainability.”
2. Shifts In Donor Demographics
In terms of his area of expertise — major giving — Needles believes many organizations have already recognized the ongoing trend of having fewer donors while experiencing an increase in average gift size. To match this, he suggested that organizations should shift their attention to major donors.
“That’s not to say we aren’t focused on the donors further down on the [giving] pyramid,” Needles said. “We’re seeing this transition playing out in real time at Wounded Warrior Project, because our history was very much built upon direct response fundraising channels — so mainly direct mail and our direct response television commercials — driving our monthly sustainer programs. Those programs are still generating excellent revenue for us, but the growth rates are just not there to propel our growth and allow us to serve the increasing numbers of warriors that sign up for our services on a daily basis.”
3. Increased Legacy Giving
Lately, major giving has seen an uptick in legacy donations. Needles explained legacy giving has been expected to grow for the past few years, as baby boomers begin to make plans for their estates and the Great Wealth Transfer kicks into full gear — and Needles expects this trend to continue over the next 15 to 20 years.
“We’re seeing it very much coming to fruition now through bequest giving,” Needles said. “Our bequest numbers in terms of fundraising have doubled in just the last three years, and it’s a sign that as our donors age out and think about creating their legacy, increasingly they’re leaving money in their estate plans for charity, and they tend to go with the ones that they trust the most.”
4. Impact of Technology
Technological advances have also been a big ticket item affecting major giving. Since the organization has been in contact with millions of donors over the past two decades, Needles explained, it's hard to determine who should be targeted as potential major donors.
“Tools like AI and data analytics will help us do that,” he said. “We’re not there yet. I think most nonprofits are not there yet, but we’re moving quickly in that direction because it’s imperative to us to attract those larger gifts to offset the decrease in the lower levels of giving that most nonprofits are seeing now.”
5. Economic Challenges
What else is on the minds of nonprofit professionals? Needles shared that our current economic conditions, compounded by the aftereffects of the COVID-19 pandemic as well as increasing inflation, are front and center.
“That has impacted not only our operations, but it impacts our donors, because if they’re paying higher prices at the grocery store or at the gas pump, that gives them less money to give to charitable causes,” Needles said. “Now, it definitely impacts Wounded Warrior Project because in general, our donors are patriotic Americans who don’t have a lot of disposable income but really feel a sense of obligation to support our ill and injured veterans.”
Despite the turbulence we’ve seen over the past 20 years, Wounded Warrior Project has succeeded at staying in the business of providing resources to and advocating for those ill and injured veterans. The secret to success, Needles said, is sticking to your mission and not chasing “the flavor of the day.”
“I think what tends to hurt some of those other nonprofits is shifting their mission to chase the idea of the day, or we see sometimes some of our peer organizations swing one way politically or another,” Needles said. “We like to play things straight down the middle, be friends with both sides of the aisle, and it very much comes into play in our advocacy work.”
Related story: 6 Points of Economic Reality for Major Gifts