Nonprofit trend report: Technology is fueling relevance and growth
Digitally mature nonprofits exceed their organizational goals, including 4X more likely to have exceeded mission goals. Nonprofits thrive on relationships. Delivering a nonprofit mission requires strong connections with stakeholders -- including employees, donors, volunteers, program participants, and more, this according to the latest research on nonprofits.
The fifth edition of the Nonprofit Trends Report from Salesforce unpacks how organizations that have embraced technology have the strongest relationships and highest rates of goal achievement -- regardless of their size, revenue, or location. Here are the four main takeaways:
- The strategic use of technology directly links to improved organizational efficiency and performance across operations. Nonprofits with a high level of digital maturity are more likely to exceed their goals and have stronger relationships with all stakeholder groups.
- Technology has clear benefits for nonprofit culture and workforce. Digitally mature nonprofits report more motivated and optimistic employees, a more positive organizational culture, and lower levels of staff burnout. These organizations are also further along in achieving their goals for climate action and diversity, equity, and inclusion (DEI).
- Nonprofits recognize the importance of technology to meet their goals but have trouble implementing it to its full potential. While nearly three-quarters (74%) of nonprofits say digital transformation is a "need-to-have" or "must-have," only 12% score high on the Salesforce for Nonprofits Digital Maturity Index.
- Barriers to digital maturity may include budget or resource constraints and competing priorities. Nonprofits are doubling down on employee retention and wellbeing to offset internal challenges like increased turnover and staff burnout. Externally, nonprofits are focusing on awareness and fundraising to diversify and rebuild connections with their supporters. Overall, nonprofits feel resilient and ready to face the future.
My key takeaways of this report will focus on the use of technology to drive better outcomes and stakeholder benefits. The Nonprofits Trends Report is a 58 page document with incredible insights, but I would like to focus this post on digital transformation and use of technology in nonprofits.
The nonprofit landscape
Over the last 12 months, the majority of nonprofits met or exceeded their overall goals, particularly their program, financial, and mission goals. Despite high rates of goal achievement, nonprofits face a litany of challenges ranging from awareness to staff retention to impact measurement and beyond. The top four challenges for nonprofits include: 1. awareness, 2. retaining staff, 3. hosting in-person events and controlling expenses.
Nonprofits struggle with raising awareness and retaining staff.
In the year ahead, nonprofits anticipate challenges related to staffing and the state of the economy, technology, finances, and fundraising. This is reflected in how nonprofits are shifting their priorities over the coming year with 48% placing a greater emphasis on fundraising, 46% on retaining staff, and 44% on employee wellbeing.
Today, nonprofit leaders are slightly more optimistic about their own organizations (65%) than the broader nonprofit sector in their country (58%). Nonprofits are also confident in the role their organizations play in society: 74% say they believe society trusts nonprofits to do what is right.
Employee retention and wellbeing are top priorities, second only to fundraising.
Nonprofits report weaker relationships with volunteers and donors -- two stakeholder groups that are critical to mission delivery and organizational continuity.
Strength of stakeholder relationships varies across the sector.
Digital Transformation is driving growth and impact
In the next 12 months, nonprofits are prioritizing cybersecurity and privacy (39%), adding new programs and services (27%), or implementing remote working models (26%). Online services to grow revenue and engagements are also top of mind for nonprofits.
A sizable minority of nonprofits (46%) say they are quick at making strategic decisions. These agile nonprofits describe their organizations as tech adopters (51%), adaptive (51%), empowered (50%), forward-looking (48%), and innovative (48%). These traits constitute a positive "mindset for change," which positions nonprofits to pursue strategic evolution and become more resilient.
Nonprofits are mostly likely to take action on cybersecurity, growth, and moving to online models.
Advice from qualitative interviews with nonprofit leaders on innovation, adaptability, and change:
- Be pragmatic. Hire specialists or engage with trusted private sector advisors, especially for guidance on technology or legal issues; look to banking partners, board members, and corporate partners for their expertise.
- Commercialize the benefit to donors. Think in terms of "packaging" the benefits of becoming a supporter to make them easy to understand and act upon.
- Listen to improve. Employ surveys and other listening tools to get feedback from stakeholders, both internal and external.
- Aim to multiply impact. Think simultaneously about the new and evolving needs of the end user and the needs of the economy as a whole -- e.g. upskilling users in areas where the economy has gaps.
- Think collaboratively. Lean into your organization's skill set(s) and find peers to fill in gaps. Explore partnerships with other nonprofits and businesses.
Nearly three-quarters (74%) of nonprofits say digital transformation is essential, and organizations that describe themselves as "tech adopters," "forward-looking," or "empowered" are more likely than their peers to say digital transformation is a must-have.
Nonprofits with a strong reliance on technology are more likely to see digital transformation as important.
One important takeaway from the report is how nonprofits link data to impact. Most nonprofits consistently leverage data to design programs and services (75%), personalize communications to stakeholders (74%), and make decisions (73%). Uses of information that ranked lower include problem-solving (69%) and forecasting income (58%).
More than half (55%) of nonprofits say their organization needs to invest in technology in order to increase fundraising, and 60% say their donors expect a better experience than their current technology provides.
Technology helps nonprofits be more efficient and improves impact.
Technology providers must do a better job supporting nonprofits. Only 36% of nonprofit professionals are "very satisfied" with the technology they have to do their jobs. Satisfaction is lowest with the integration of data sources and systems (34% very satisfied) and the availability of easy-to-use reporting tools (33% very satisfied).
Digital maturity fortifies relationships with all stakeholders.
Technology providers must also do a better job educating nonprofits on the importance of digital maturity. Digitally mature nonprofits outperform their peers, regardless of their organization's revenue, employee headcount, or geographic location. Organizations with high digital maturity are 1.9x more likely (93% vs. 50%) to have experienced improvements in organizational efficiency or mission impact. They are also 3.5x more likely (38% vs. 11%) to have achieved mission goals compared to their peers with low digital maturity.
Digital transformation is the pathway to maturity. The report notes that cybersecurity and privacy (34%), cost efficiency (33%), and data management and optimization (32%) are the leading reasons for digital transformation. Impacts like improving stakeholder relationships (23%), competitive advantage (19%), and keeping up with stakeholder expectations (18%) rank lowest.
Digital transformation is hard work and it requires organizational commitment, the right culture, people and processes. Without commitment to resources and clarity of vision and execution, transformation can be difficult and slow. The most commonly cited barriers to digital transformation are a lack of budget or resources (37%) and higher priorities within the organization (30%). Other challenges include a lack of skilled talent to implement and manage technologies (28%) and a lack of understanding of those technologies (26%).
To learn more about the Nonprofit Trend Report from Salesforce, you can visit here.