With so much change going on in the world today, it’s clear that an intricate web of disruptive factors for nonprofits is a prime issue for nonprofit boards. Changes in society, the global economy, and technology are the leading forces behind vast disruption in the nonprofit arena. To run their nonprofits successfully, leaders need to be able to swiftly adapt and change with the trends.
Acquiring new donors and increasing donor funds has long been a top priority for nonprofit organizations. With a variety of disruptive forces continually knocking at the door, nonprofit leaders have to start taking a different approach to retaining current donors, acquiring new donors, and promoting general brand awareness. The most successful nonprofits tackle disruption by focusing on being more person-centered and fostering greater community engagement.
In light of current disruptive forces, it’s time for nonprofits to explore how current trends are affecting their strategic plan, goals, and priorities.
The Evolution of Disruptive Trends for Nonprofits
If we look back to the Great Recession in 2007, we find the origin of disruptive forces for nonprofits. Jimmie Alford, a consultant for nonprofits, notes that donations for nonprofits topped out at $330 billion before they dropped as a result of the recession. Citing issues as low inflation, slow economic growth, and personal constraints, Alford predicts that it could take another 10 years before nonprofits could expect to hit that mark again.
These are the types of issues that are on the minds of major donors as they consider whether they’re willing to commit to making recurring donations in the coming years, as they’d commonly done in the past. Nonprofit leaders that fail to recognize the power of disruptive competitors may find themselves lagging behind and struggling with sustainability.
What Nonprofits Should Know About Disruptive Forces
Exactly what are we talking about when we refer to disruptive forces for nonprofits? What we know about disruptive forces is that they’re situations or circumstances that tend to be significant changes that stray away from previous patterns. We also know that disruptive forces for nonprofits create change dynamically and that they have the capability of transforming existing practices. In fact, disruption has changed some industries significantly and created new industries as well. Disruption forces change rather than allowing it to evolve over a period of time.
In specific terms, these are some of the ways nonprofits have had to deal with sudden change due to disruptive forces:
- Straying from the status quo and exploring different methods or services
- Implementing change to protect data and how the nonprofit uses it
- Integrating science into their decision-making process
- Finding new ways to attract long-term investors over one-time donors
- Changing strategies for creating branding awareness
- Redefining how they measure success
Let’s take a closer look at the types of disruptive forces for nonprofits, and more importantly, how your nonprofit can effectively solve for them.
7 Types of Disruptions and How to Solve for Them
- Disruptions in fundraising efforts. While the number of donors is decreasing, the amount of donations is increasing. One of the most significant patterns for nonprofits pertains to their fundraising programs and activities. Changes in the economy have caused companies and people to think differently about the way they spend and save money. It’s no longer enough to send out donation letters, apply for grants, and sit back and wait for the funds to roll in. Disruptive forces signal the need for nonprofits to think the same way consumers and business owners do. This means letting go of pre-existing patterns and finding new ways to generate and save money. For example, there’s currently a huge movement driving a remote workforce. How can your nonprofit redistribute assets to leverage reductions in facility costs, utilities, and other matters?
- Disruptions in lending practices. Since the financial crisis in the early 2000s, banks and other financial institutions have tightened up on lending practices. In many cases, this is due to increased scrutiny by regulatory bodies. Nonprofit boards may need to explore innovative financing options such as conditional conversion models, pay-for-success models, or debt/guarantee models.
- Disruption in governance practices. There is greater scrutiny over governance for nonprofits since the media shed light on nonprofits that lacked good governance. Nonprofit leaders need to pay greater attention to governance and compliance matters than in the past, making it more difficult to respond quickly when major crises surface. Many nonprofits are finding it helpful to tap into the power of social media to connect nonprofits with each other to meet needs collectively.
- Disruption in competition because of technology. The digital era has given nonprofits a wealth of tools to help them beat their competition from a fundraising perspective. Technology gives nonprofits equal opportunities to make their brands stand out, connect with supporters and mobilize them.
- Disruption in how to communicate effectiveness of leadership. Today’s donors and supporters are more skeptical than in the past. Nonprofits need to do more than just tell stakeholders they’re effective. They need to be transparent and show them they’re making progress toward their stated goals. One way that boards can do this is by doing annual self-evaluations.
- Disruption in how to create a sound infrastructure. Your nonprofit has to use all its resources to build a solid infrastructure. Today’s boards need to evaluate the individual components that form their infrastructure to ensure they can withstand new trends and the test of time. With this in mind, boards may need to invest more heavily in committees that focus on research and development.
- Disruption in long-standing practices that generate growth. Nonprofit organizations may merely be on the cusp of disruption. Nonprofit boards will need to be proactive and forward-thinking to overcome disruption that impacts growth. Board education may be the key to staying current with trends and how to meet these challenges successfully.
Leveraging Technology to Solve for the Challenges Associated with Disruptive Forces
A board management system by BoardEffect gives your nonprofit board a single, fully-contained board portal that’s helpful in your work toward dealing with disruptive forces. It’s a platform that offers a wide variety of features to support your efforts in streamlining processes and operating in a transparent manner. Your board portal allows you to create online board books, create a board calendar, communicate and share files securely, share articles on nonprofit trends and governance, and conduct online board self-evaluations. Overall, a BoardEffect board portal puts your nonprofit in the best position to invest in your nonprofit’s future while effectively managing current disruptions.