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5 Nonprofit Trends to Watch in 2013

By Nell Edgington



I started a tradition in December of 2010 with a blog post on the nonprofit trends to watch in the coming year. Keeping with that tradition, here is my take on the nonprofit trends for 2013 (you can read my nonprofit trends posts for 2011 and 2012 as well).

As I’ve said before, I’m more optimist than fortune teller, but I do think that the nonprofit sector is changing in some exciting ways. And I for one am excited to see what the new year brings. Here’s what I think we should watch for:

1. More Demand for Outcomes

The biggest trend I see is a growing demand for nonprofits to 1) articulate what results they hope their work with achieve and 2) track whether those results are actually happening. Nonprofits have long discussed the outputs of their work: # of people served, # of services provided. But the sector is increasingly being asked to articulate and track the outcomes they are achieving. How are people’s lives changing because of the work a nonprofit does? Social change has become an increasing demand of funders and other supporters. That means nonprofits must develop their own theory of change (how they use community resources to create change to a social problem) and then measure whether that theory is becoming a reality.

This increasing focus on nonprofit outcomes is leading to the 4 other trends:

2. Decreasing Emphasis on Nonprofit “Overhead”

The bane of the nonprofit sector is the meaningless and destructive public perception that you can separate nonprofit programs from the administrative costs (staff, technology, systems, materials, fundraising) to make those programs happen. This separation is so destructive because it forces nonprofits into a misalignment of money, mission and competence which sets them up for failure. A nonprofit cannot succeed if they don’t integrate their operations and money-making efforts into their mission. But the good news is that more and more people are coming to realize that you can’t just invest in programs without the staff, infrastructure and fundraising to make those programs happen.

3. More Advocacy for the Sector
 as a Whole
The nonprofit sector has long been a fractured grouping of organizations of various sizes, business models, and issue areas. It has been almost impossible to organize the disparate sector to fight for better government regulations, 
improved public perception, more funding. But that tide is starting to turn. With the advent of groups like CForward and a growing discussion about how best to advocate for the sector as a whole, I believe that we will start to see the sector organize, mobilize and build the confidence necessary to claim its rightful place.

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 once and awhile to strengthen and grow their staff, technology, systems, 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 those nonprofits that don’t have adequate infrastructure simply will not survive, let alone be able to adequately address the social problem 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 that a whole infrastructure for evaluating and rating nonprofits emerges, 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 they rate 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 its up to nonprofits to understand the trends and where they fit as the sector evolves.

Photo Credit: zigwamp

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About the Author: Nell Edgington is President of Social Velocity (www.socialvelocity.net), a management consulting firm leading nonprofits to greater social impact and financial sustainability. Social Velocity helps nonprofits grow their programs, bring more money in the door, and use resources more effectively. For more information, check out Social Velocity consulting services and clients.


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9 Comments to 5 Nonprofit Trends to Watch in 2013

[...] I started a tradition in December of 2010 with a blog post on the nonprofit trends to watch in the coming year. Keeping with that tradition, here is my take on the nonprofit trends for 2013 (you can read my nonprofit trends posts …  [...]

Dr. Dian Allen
December 13, 2012

Appreciated reading your blog and update for 2013, Nell. Do you also see a trend toward the more corporate-type structure? And toward more vertical, top-down hierarchy, and a decrease in autonomy, compared to past, in order to make these gains, as non-profits become larger? More emphasis on bureaucracy and career, then “being with” clients? Outcome studies are so valuable. Do outcome studies result in better client care? Will be interesting to see. Much depends on what gets measured, which will be guided by the dollar and measurable factors. (I do not know where this reply goes, but I presume to you as a dialogue in your blog.) Happy Holiday Season to you. Hope all is well. Dian

Nell Edgington
December 14, 2012

Dian,

I don’t think there is a trend toward more hierarchy. I actually think that most organizations (for profit and nonprofit) are moving to a more horizontal, team-oriented structure with more autonomy. I also think that outcome studies, when done right, do result in better client care. If you can measure whether a program is actually having an effect on a client then you can tweak the program when the results aren’t what you thought they would be. Happy Holidays to you as well!

Debbie Douglas
December 15, 2012

Thanks for the blog Nell. I agree with the trends you’ve identified. As the Executive Director of a membership based Council (concerned with sector capacity and public policy on immigrant and refugee issues) I’m particularly interested in outcomes measurement and the need for infrastructure support or core funding. In Canada, the non-profit sector is largely funded by government. In the past two decades we’ve seen a significant shift away from core funding to project specific funding. This of course undermines the capacity of agencies to fullfill their mission and mandate. Probably due to being less optimistic than you I don’t see a major shift happening here, whether the funding is coming from government or the donor community. Happy holidays.

Debbie

Musenze Solomon
December 16, 2012

Nell; thanks for your writing!

I can now position myself to better take advantage of 2013 market offers for my social venture!

Nell Edgington
December 17, 2012

Musenze, you are welcome, glad the post was helpful!

Debbie, thanks so much for the Canadian perspective. I’m sorry to hear that you are less optimistic. My feeling is that the economic adversity that we are all experiencing will eventually result in some significant structural shifts in the social change arena. It may take longer in some places, but I think those shifts will still eventually happen.

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[...] From across the pond, 5 Nonprofit Trends to Watch in 2013 from Social Velocity (a trend watch tradition she started a couple of years ago) http://www.socialvelocity.net/2012/12/5-nonprofit-trends-to-watch-in-2013/. [...]

[...] week I spoke to a group of nonprofit leaders about 5 Nonprofits Trends to Watch in 2013 and a woman stood up and said “These trends are all well and good, but we need to talk about the [...]

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