THE BLOG
01/08/2013 09:38 am ET Updated Mar 10, 2013

Peering Into the Nonprofit Crystal Ball...2013

In 1965, Gordon Moore, an Intel co-founder, verbalized his now famous "Moore's Law" in a magazine interview. At its most simple, Moore's Law states that computer chip performance will double every two years. If we apply this thinking more broadly to the world at large, we've seen a very rapid change in the evolution of technology in the last 10 years. Think about this: Less than 10 years ago, Facebook didn't exist, Twitter didn't exist and the iPhone didn't exist.

The introduction and widespread adoption of all these technologies into the consumer marketplace, along with economic and regulatory uncertainty, and a shifting demographic have created an imperfect storm in the nonprofit sector that I've written about recently. So, where do we go from here? And how do we address the challenges while identifying and embracing the opportunities? What can we expect in 2013?

I've identified four key trends below that I believe will have the greatest impact on the nonprofit sector this year based on my own observations and conversations with leaders in the nonprofit sector, as well as research that Blackbaud, the company I lead, has conducted.

Increase in charitable giving will not be dramatic

To see the future, let's take a quick look at the past. Fundraising in the United States has historically centered on 2 percent of GDP. There is nothing to suggest that will change soon. Overall giving in 2012 remained relatively flat on a year-over-year basis. Considering the tough economic times we are currently experiencing as well as persistent regulatory uncertainty, it is doubtful that 2013 will be much different.

Additionally, we will see a "flight to quality" from supporters as donors look to support give to fewer nonprofit organizations and focus on those that are sustainable. Moreover, we can expect demand for services to increase as government funding decreases and the economy continues to struggle. To be successful, nonprofits must increase their focus on donor retention while also investing in cost-effective donor acquisition.

The nonprofit sector will go through a revaluing process

On a positive note, in 2013, the nonprofit sector will be viewed in a new light. "Nonprofit" will be viewed as just a tax status vs. a business model, as it should be! There will be an infusion of new talent, from both an entry-level and management perspective as jobseekers increasingly pursue careers with meaning. Baby Boomers will start second careers in the sector, and Millennials will earn degrees in nonprofit management.

Additionally, we're seeing an increased merging of nonprofit and for-profit business practices - the bringing together of sustainability and effectiveness in operations coupled with mission-driven passion - that will certainly benefit nonprofits.

Technology will play a major role for both nonprofits and their supporters

At times, it would seem that ongoing technology trends like mobile and cloud will go on forever, but at some point these technologies reach a tipping point that causes a transformational change in the way people relate to technology. In 2013, we will likely see this transpire in the nonprofit sector. Supporters will be able to observe real-time mission delivery through mobile devices. Relying on CRM and Big Data, nonprofits will have a comprehensive understanding of all the ways supporters interact with their organizations and will be able to tailor branded experiences for each and every supporter. According to the recent State of the Nonprofit Industry report, the use of mobile technologies will more than double for most nonprofit organizations in 2013. In many ways, nonprofits will move from testing the mobile experience to delivering the mobile experience this year.

Technology is also transforming nonprofit organizations themselves as well. Never has the need for a full 360-degree view of a supporter been more crucial with donors both being more selective in the nonprofits they support and using multiple channels to engage the organizations they support. Technology today allows nonprofits to deliver quality and availability of service to both supporters and beneficiaries. It's simply not possible to deliver the best possible experience (and therefore retain and attract donors) without the underlying communication infrastructure and comprehensive 360-degree view.

The world is shrinking and philanthropic borders are broadening

Even a few years ago when a disaster occurred, it was viewed as an event that happened "over there." This has changed dramatically. Disasters are now viewed and responded to in a similar fashion regardless of where they take place. From a nonprofit perspective, the world is flattening. In addition to the shrinking of the world, we're also seeing a shift in wealth toward developing nations and the BRIC countries, which will cause nonprofits to rethink how they raise money. Essentially, it becomes critical for nonprofits to "engage donors where they are" in the world. The shrinking and the broadening will also increase competition for resources, forcing nonprofits to be very deliberate and transparent when it comes to mission delivery and supporter engagement.

2013 will be both an exciting and challenging time for nonprofits. The world is changing at an accelerated pace, and successful nonprofits will ride the wave of change and meet their supporters and beneficiaries on their own turf while increasing efficiency and sustainability when it comes to mission delivery.

Each of these trends is intertwined, yet has a unique story unto itself. As the year progresses, I will explore how they play out and provide deeper insight into how they are affecting the sector.

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