A focus on connecting with donors, understanding shifts in the population, and planning for the future unlocked exciting potential for nonprofits. As we look back on the year and the many conversations we had with nonprofits across the nation, we share the most impactful insights and perspectives. 

Broaden Donor Base

With the shift in the donor landscape and tight economic environment, nonprofits are looking to diversify their donor base. A mix of funders including individuals, corporations, and foundations will help organizations maintain operations. Reaching new types of donors means focusing on new strategies. 

Leverage social connections to reach individual donors—online and in person. Boosted posts and targeted ads on social media will get your name in front of new contacts. 

Look both near and far for foundations aligned with your mission. Local foundations are often interested in supporting their communities, but you may find foundations outside your community that align with your unique mission as well. Tools such as ProPublica and Candid can help you connect with these organizations. 

Corporations typically fund areas connected to the work their business does—some fund environmental causes to offset their impacts, others focus on developing the workforce of the future. Sharpen your nonprofit’s story and tailor it to highlight the change corporations are looking to foster. 

At one nonprofit we work with, board members identified three contacts in various areas of their lives—from personal and familial connections to professional and social circles. This exercise helped the board identify new people they hadn’t considered as potential advocates and donors for their mission.

Collect Impactful Data without Burdening Staff 

Data is an important part of telling a compelling story and driving internal decision-making. But with nearly limitless data available to be collected, it can quickly become a burden on staff. To best utilize resources, focus on the most impactful data—this could include populations served, the cost of helping one program or service beneficiary, and program effectiveness measures, among others. Consider who the data is for and what it tells them. Create space for these considerations in conversations with your staff to help uncover efficiencies in reporting. 

Reflect on Data Collection: 
What is the data for?
What does the data say? 
Is there a simpler way to present the same insights?
How do the metrics you gather help develop your staff professionally?
What is your staff’s perspective on the data they gather and its use?

Exploring Artificial Intelligence (AI)

The nonprofit sector began to explore cutting-edge technology this year implementing AI to strengthen data around donor bases and make inferences on donors' capacity for giving. Some nonprofits have sourced AI chatbots to help answer common questions and direct users to resources on their websites, as well as an aid for communications. As helpful as AI can be, nonprofits should take the proper precautions to protect data privacy and integrity of communications. Organizations must be educated about cybersecurity and have the right controls in place. Cybersecurity Information for Nonprofits is a great place to start. 

Plan for Succession 

High turnover in the nonprofit sector has made succession planning more important than ever. Ensuring continuity of service in the event of a sudden exit is just as important as long-term development plans and pathways to senior leadership within your organization. Succession planning for key staff roles can be as simple as a document containing basic functions and contacts for the position. For senior and C-suite roles, the planning will be more involved and will include input from the board, current leaders, and other stakeholders within the organization. 

Succession planning is key for board members as well. Consider what guidance is provided within the bylaws— staggered term limits may be included for officers to avoid coinciding vacancies. There may be information about who is eligible to serve on the board, which can be a starting point for building a short list of potential board members to recruit in the future. Anticipate future needs and gaps that may arise based on the current board makeup. Consider qualifications for future board members such as having expertise in finance, legal, or a background related to your mission area. 

Understand the Next Generation

The Great Wealth Transfer is the shift of Baby Boomers’ wealth to Gen X, Millennials and Gen Z. Baby Boomers hold half of the nation's $140 trillion in wealth[1] and give more charitable donations than other generational cohorts[2] . Nonprofits are thinking about how generational shifts will impact their donor base, their leaders and board members, and the populations they serve.

NextGen Connections

  
Donors: Learn about their families and the younger generation, focus on connecting and building relationships with them. One nonprofit we work with invited families to “site visits” to educate them about the needs in the community and how the organization seeks to address those needs. 
Board Members: Consider establishing a junior advisory board to develop young members into future board members and gain fresh new perspectives. 

 

Engaging in Trust-Based Philanthropy

Trust-based philanthropy—a charitable approach that redefines the relationship between donors and the nonprofits they support—remains a topic of discussion. Trust-based philanthropy encourages funders to place trust in their grantees by giving unrestricted grants, revisiting lengthy and involved application processes to make them more efficient, and implementing multi-year giving strategies among other practices. As more nonprofits are tasked with meeting increased needs in their communities with fewer resources, they can benefit from efficient processes and strong relationships to make the most of their time and effort.

Nonprofits can help build strong relationships and trust with funders by communicating with and seeking guidance from them. If a funder has traditionally given towards a specific program, consider making the ask for unrestricted funding but set the expectation that you will communicate regularly about the progress that has been made because of the grant. Be transparent about the challenges your organization may face carrying out programs and services. Your funding partners may be able to provide advice or connect your organization to other resources. 

Prepare for Legislation

The Charitable Act was introduced in the Senate in February 2023 and is a bipartisan bill aiming to extend the expired incentives for non-itemizers to give to tax-exempt organizations and receive a deduction beyond the standard deduction. While this bill has not seen much movement since its introduction, it could incentivize more households to engage in philanthropy.

The Stakeholder Engaging and Advancing Together (SEAT) Act seeks to create a seat at the table for nonprofits when it comes to federal policymaking. It also calls for stronger data, particularly around labor, provided through the Bureau of Labor Statistics for the nonprofit sector. 

The Students for Fair Admissions cases declared that race could no longer be a factor in college admissions. The impact this may have on how foundations are able to engage in race-conscious grantmaking remains unclear. There is also concern as to whether organizations who are focused on enhancing racial equity would be at-risk of litigation based on their grantmaking practices. We recommend that these organizations consult with legal counsel to determine how they may be exposed to legal challenges. 

Let's Talk

We want to hear from you too! Share your most impactful insights from the year with us at IAMNonprofitStrategy@pnc.com.