The top three priorities for nonprofit managers for the next 12 months are digital transformation (42%), reducing costs (38%), and seeking new sources of revenue/funding (36%). And, more than half (56%) of respondents to a new poll said they are evolving to meet new needs of the populations they serve.
Nonprofit leaders are optimistic, although revenue increases have been marginal. Fewer than half (44%) of respondents had increased revenue during their most recent fiscal year, down from 76% during 2022. Despite this, 69% anticipate revenue will increase during the next fiscal year.
The data is from the seventh annual Nonprofit Standards benchmarking survey, from accounting and consulting firm BDO. This survey of more than 250 nonprofit leaders in the United States includes responses to questions regarding changes to revenue, investing in technology, and response to pressure from donors to address environmental and social and governance (ESG) issues.
The data shows that leaders are reexamining organizational purpose. Nearly all (99%) surveyed say they have meaningfully expanded or shifted the scope of their mission during the past year.
Tech investment is a priority despite tight budgets. More than half (59%) of respondents plan to increase their technology spending during the next 12 months, and 57% plan to select and/or implement a new enterprise resource planning (ERP) system in the same timeframe. Respondents identify digital transformation, cost reduction, and finding new revenue and funding sources as their highest priorities for the next 12 months.
Donor are scrutinizing nonprofits regarding ESG policies. Just more than half (51%) of respondents said funders and donors have asked for more information on ESG strategy during the past 12 months, while 42% said they are seeing an increase in requests for information on environmental impact and reduction strategies.
There were separate, subsector-specific breakout reports, including health and human services (HHS) organizations, higher education organizations, grantmakers, public charities, international non-governmental organizations (INGOs), and organizations with more than $75 million in annual revenue. Some of the findings include:
* Leaders at HHS organizations and their donors are focused on cybersecurity. Nearly all (90%) of HHS respondents are somewhat or very concerned about a potential cybersecurity incident, and 54% indicated donors have asked for more information on cybersecurity strategies and/or cyber risk during the past 12 months.
* Leaders at higher education organizations reported increased donor requests for information regarding ESG strategy (54%) and environmental impact (46%). As they actively develop and advance ESG priorities, pressure from all sides underscores the ever-increasing importance of thorough strategizing.
* More than half (54%) of grantmakers report increasing their technology spend, and the primary goals for this investment are improved program/service delivery and improved operational efficiency.
*Leaders at 80% of public charities stated that human resources challenges are making it difficult to report on program impacts. Numerous strategies and incentives to attract and retain talent are being deployed, with 28% of respondents planning to increase wages and salaries.
* Digital transformation is the highest priority for leader at INGOs during the next 12 months, with nearly three-quarters (70%) planning to increase technology spending and 80% planning to implement a new enterprise resource planning (ERP) system.
The survey was put in the field this past May by Rabin Roberts Research. Nonprofit leaders at 250 health and human services organizations, public charities, colleges and universities, grantmakers, and international nongovernmental organizations were surveyed.