Top 5 Nonprofit Trends for 2021

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Top 5 Nonprofit Trends for 2021

Nonprofit Trend 2021 Image

Nonprofits continue to face unprecedented circumstances as the pandemic, natural disasters, and human rights causes take center stage across the nation. Donor habits change, fundraising efforts must adapt, and volunteerism looks quite different than it did just a year ago. How nonprofits have adapted and evolved amidst this change is certainly the best gauge we have for knowing how well nonprofits will fare in 2021.

With this in mind, it’s important to keep abreast of the trends taking hold in the nonprofit space if you are looking to build or enforce a strong foundation for your nonprofit that can weather the current and future storms. Here are the top 5 trends for nonprofits in 2021.

Nonprofit Trend 1: Fundraising

Some economic recovery is expected in 2021, which is a welcome sign for nonprofits’ fundraising forecasts. As consumers change their spending habits to going out less, traveling infrequently, and generally saving more money, it’s time for nonprofits to amp up their engagement efforts. Engaging donors now can help build lasting relationships once the crisis has passed.

Additionally, movement in Washington is likely to be at least slightly favorable for nonprofits. Another stimulus check has been passed, and with the knowledge that some individuals donated their previous checks, this could provide opportunities for nonprofits. And while sweeping tax changes may not be predictable, there is hope for favorable changes to the charitable tax deduction in President Biden’s tax plan. Additionally, a temporary provision created by the CARES Act in spring of 2020 allows non-itemizers to deduct up to $300 in charitable donations ($600 for couples) on their tax returns for the 2020 and 2021 tax years. Keeping this in mind, nonprofits will want to educate and engage their donors if they hope to maximize these opportunities.

Nonprofit Trend 2: Management

Nonprofits have chosen or been forced to shift priorities throughout the pandemic to stretch resources. It is expected that nonprofits will continue to pause certain aspects of their organizations as 2021 continues depending on the fluctuating state of the economy and donor behavior. Additionally, organizations have shifted toward a community-focused mindset.

In light of these trends, nonprofits should consider their financial management, fundraising, and volunteer strategies to ensure goals are met and the mission stays intact. Your CPA can help develop cash flow projections for potential scenarios your nonprofit could face as the pandemic continues and the economy fluctuates. Having a clear financial picture can help management focus priorities. Be sure to inform key stakeholders whenever there is change to achieve optimal buy-in.

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Nonprofit Trend 3: Data

Transparency is essential to today’s donors, and your data is the key to that transparency in 2021. Holding a 501(c)(3) status is not enough to convey transparency. Tracking, benchmarking, and reporting on your data will be key to winning grants, attracting donors, and engaging volunteers in 2021. Your donors and volunteers want to understand where their time, talent, and treasure is going.

If your organization doesn’t use digital data tracking tools, now is the time to implement them. Work with your CPA to determine which tools and methods are right for you to track and meet your benchmarks and goals for the year.

Nonprofit Trend 4: Service

As the needs of our communities change through the various stages of the pandemic, the services that nonprofits offer will need to change along with them. Health, wellness, and community services are taking center stage, so nonprofits will want to consider how they can fill that need and meet their mission. Additionally, connectedness is important for recipients and donors, so nonprofits will need to invest in digitizing services and expanding staff to fit those services to meet that need.

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Nonprofit Trend 5: Digital

The overarching theme through each of the previous four trends is that digital technology is playing a leading role in the future of nonprofits. Fundraising experiences have evolved to engage donors through digital platforms. Management teams are taking a look at how their financial management and data are housed and presented for the greatest transparency possible. And, delivering services has even gone digital in areas where it’s possible. Digital technology infrastructure is and will be vital to a nonprofit’s future long after the effects of the pandemic have passed. Your CPA can suggest digital technology solutions for the financial side of your nonprofit that can scale with you when needed.

Staying on Top of the Trends

Staying on top of the trends is important to the viability of your nonprofit. Whether you’ve been transforming in these areas over time already, or you’re being forced to due to the nature of the pandemic, the trends of 2021 are expected to have a lasting impact. We can help ensure you stay on the right track. Contact us today with any questions you have.