3 Predictions on the Future of Nonprofits

May 24, 2011 -
The number of college graduates going to work in the nonprofit sector continues to rise, and will likely remain a preferred job sector for entry-level workers in 2011, according to a recent study by the New York Times. Nonprofits are also growing in terms of economic impact around the globe, adding more than 5 percent to the GDP of countries on average, which amounts to more than $1.4 trillion in total revenue and $2.6 trillion in assets in the U.S. alone. This increasingly important sector of the global economy offers opportunities for young professionals to exercise their unique skills and perspectives to meet the demands of the digital era. Here are three trends we see in the nonprofit sector that bode well for motivated young professionals.

1. Getting more strategic about social media marketing

Nonprofits struggle with how much to spend on communications and outreach. These expenses are often perceived as a cost to be avoided or minimized rather than as a strategic tool for enhancing the long term efficacy of an organization. But attitudes are shifting, and leaders in the nonprofit world are realizing that social media marketing offers an effective way to reach large numbers of stakeholders on a shoestring budget. However, as social media and guerrilla marketing tactics become integrated within organizations’ communication and outreach plans, the nonprofit community must accept that being an efficient organization doesn’t necessarily mean minimizing costs, but rather ensuring that money is spent effectively through smart results-based management. Too often we hear about nonprofits that are more willing to waste hours upon hours of valuable staff time using free online tools to meet their social media marketing goals rather than pay even relatively modest sums for Facebook ads, Google Adwords, Linkedin Ads, subscriptions to Hootsuite or Tweetdeck, and the like. But the math according to the conventional thinking just doesn’t add up. It’s remarkably more efficient in terms of maximizing impact-per-dollar to pay $50 for a Facebook ad (which might get you 50 to 100 new fans), than it is ask a $15-per-hour staff member to spend even a single workday to try to generate the same result ‘for free’ -- actually $120, well over twice the cost -- via guerrilla marketing. And some service providers, like Google Adwords, even offer nonprofits special advertising programs. More nonprofit managers will eventually realize that it’s often much cheaper to pay for some services than to try to do it ‘for free.’ So, in the next few years, we predict that we’re going to see more concerted and strategic use of social media:

2. More online transparency and accountability

In recent years, donors and the general public have come to demand and expect a level of transparency and accountability from nonprofits (just consider the recent debacle with Three Cups of Tea author Greg Mortenson’s charity). Historically, the focus has been on financial accountability through IRS reporting, which requires nonprofits to disclose how much money they spend on programs, administration and fundraising. Online designation agencies like Charity Navigator use this information to create composite ratings of nonprofits and generate various top-ten lists. One important criticism of such systems is that they are fundamentally incapable of revealing whether an organization’s spending actually accomplishes anything, which, after all, is really all you want to know in the first place. As a result, Charity Navigator is revamping its ratings system to take account of a nonprofit’s accountability and transparency practices, and eventually, its results. This marks a broad shift in the mentality of the nonprofit sector and has important implications for nonprofit managers and young professionals aspiring to careers in nonprofits. As independent agencies like Charity Navigator transition from an exclusive focus on financial ratios to a multidimensional approach encompassing financial sustainability, transparency and outcome accountability, nonprofits will face even stronger incentives to improve the quality and quantity of information available on their websites. Their  new system, which is currently being pilot-tested, evaluates nonprofits based not only on financial ratios, but also whether basic information is conspicuously disclosed on nonprofits’ websites. This trend means that nonprofits will have to get more serious about investing in their websites and disclosing credible information about their programs and managerial practices online. Nonprofits’ websites are a critical source of information for stakeholders, and these sites will come under dramatically increased scrutiny in the future. To be prepared, nonprofit managers need to make major investments in website design and functionality. For smaller organizations this might mean outsourcing, while for larger nonprofits this may mean more (and higher paid) dedicated staff.

3. Nonprofits will look to young talent and trained professionals to lead the next generation

The nonprofit sector has grown rapidly since the WWII period, with the number of nonprofit organizations expanding exponentially. These ‘boomer’ nonprofits now need an influx of new talent that is professionally educated, technically savvy, and more international than ever before. Today, our higher education system struggles to provide the type of dynamic leadership training programs that will prepare future nonprofit leaders for the challenges they will face. Many MBA and MPA programs offer concentrations in nonprofit management and leadership, and the demand for academic courses and programs is strong and growing. A new generation of potential managers and leaders -- professionally trained and technologically savvy -- is slowly emerging from America’s universities. The current ‘boomer’ generation must appreciate this new talent and learn how to harness it effectively. Consider the implications. A young intern with a bachelor's degree and coursework in web design, communications and nonprofit management could stuff envelopes, or more fittingly, become your dedicated go-to staff person for social media who doubles your fundraising efficiency. As nonprofit staffs continue to become more professionalized with career-focused managers, nonprofit leadership institutes and other specialized programs (like seminars, executive education programs, webinars and conferences) will materialize to fill the gap left by traditional education. Experienced practitioners wishing to make the leap to a leadership role increasingly have the capability to do so, and current leaders need to think realistically about who will lead and staff their organizations to meet the demands of the future. ----- Whitney May Parker is vice president of user experience for Brazen Careerist, director of social media for Young Professionals in Foreign Policy, and media coordinator for the Institute of National Security and Counterterrorism. You can follow her on twitter @whitneymparker. George E. Mitchell is assistant professor of political science at the City College of New York and Moynihan Research Fellow for the Transnational NGO Initiative at Syracuse University’s Moynihan Institute of Global Affairs. Visit his website. ----- Are you in the nonprofit space and interested in networking with other professionals in the field? Join the authors of this post for a special virtual network roulette event on Thursday, June 2 at 7:30pm ET / 4:30pm PT. You can ask the authors questions and get ideas and exchange tips with your peers. Register here.