2022 Nonprofit Outlook
Throughout the year, our team is regularly researching and watching trends in the nonprofit sector to better support our clients.We’ve decided to compile that information into our inaugural Nonprofit Outlook so that you and your team can benefit from the same insight that our clients do.
The trends and topics highlighted in our 2022 Nonprofit Outlook were selected because of their overall importance to the future of the nonprofit sector and their potential impact in the coming year. We’re providing links to more in-depth resources and offering some helpful advice on what you can do at your nonprofit in the coming year based on these trends.
The Dot Org Solutions 2022 Nonprofit Outlook features:
- Nonprofit industry giving performance and projections
- Marketing and communications trends
- Operations and HR considerations
- Planning and strategy recommendations
NONPROFIT INDUSTRY GIVING PERFORMANCE AND PROJECTIONS
There is no question the nonprofit sector has been on a rollercoaster throughout the pandemic. But that doesn’t mean donors aren’t giving. In fact, 2021 is pacing slightly ahead of a very strong 2020 thanks to nonprofit efforts to retain donors (AFP Global).
As we look forward to 2022:
Overall giving will grow at a moderate pace.
- Individual giving is expected to increase modestly, but at a higher rate than in 2021.
- Foundation giving could be mixed. Some grantors may slightly decrease giving due to larger pandemic-related distributions in 2021, while others will increase distributions because of healthier portfolios due to strong stock market performance the last several years.
- The pandemic led many individuals to reassess their estate plans, which made them consider planned gifts at significantly increased levels. Nonprofits with established planned giving programs will likely see increases in estate plan gifts in the next several years.
- Many corporations are ramping up social responsibility efforts as a way to gain customers. Look for opportunities for mutually beneficial nonprofit/corporate partnerships.
Many people turned to nonprofits for help for the first time due to job losses and other hardships brought on by the pandemic. And active fundraising to support these nonprofits brought an increased awareness of the important role nonprofits play in our communities.
Donors responded to special appeals and many gave for the first time in 2020. These donors continued to support organizations who actively nurtured those relationships in 2021.
What can you do in 2022 to capitalize on the trends?
- Watch the stock market and inflation. These indicators impact donors in all areas and fundraisers need to be mindful when having donor discussions and framing appeals.
- Evaluate donor capacity. Has a donor’s situation changed (for better or worse) because of pandemic-related issues?
- Encourage monthly giving. Subscription models are popular for so many things (streaming services, meal delivery, software and more). Why not philanthropy? Monthly giving helps with cash flow and allows you to continually build connections with your donors.
- Make it easy to donate on your website.
- Encourage planned giving and establish a program if you don’t have one.
- Show the impact of gifts through your messaging and stewardship activities to retain new donors acquired in recent years and increase giving from long-time donors.
- “Fundraising and Research: Charitable Giving Trends for 2022 and Beyond,” AFP Global
- “Second Quarter 2021 Shows Continued Confidence in Charitable Fundraising,” AFP Global
MARKETING AND COMMUNICATIONS TRENDS
The past two years have shifted the way many people communicate and receive information. More people are researching nonprofits online, buying habits have changed (curbside pickup, anyone?) and artificial intelligence (AI) is influencing many of our decisions.
"Snackable content" will be the new norm.
Gone are the days of most long-form content. Welcome to the newest business buzzwords – snackable content. Consumers are looking for bite-sized content that they can consume in a hurry, which is why TikTok and short videos have become so popular. They will be looking for that from your nonprofit as well.
People are seeking personalized experiences.
It was creepy when I first started to get retargeted ads from websites I visited. Now, the personalized experiences and ads I get while online actually enhance my overall experience and save me time. Thanks to AI, that is possible. Donors and other constituents are seeking similar experiences from your nonprofit, whether they are in person or online.
Investments in digital marketing will help nonprofits connect with constituents and donors.
People don’t want to look very hard to find the information they want. If you aren’t giving it to them, they will go somewhere else. Investments in digital marketing (website updates, digital content, enhanced user experience, email campaigns, paid and organic social, etc.) will be critical as your audiences are expecting them.
What can you do?
- Automate as much as possible. (Platforms like HubSpot make it possible. Contact us to learn more.) It’s an initial investment but pays off in the long run.
- Chose the right social platforms for your audience and use them to communicate regularly and appropriately. TikTok may not be right for your organization, but perfect for others. Focus on what you can manage and do it really well.
- Consider sharing short videos on social media and your website. You don’t have to spend tons of money on fancy video. A mobile phone works great.
- Look for ways to repurpose existing content into snackable content.
- Audit your current marketing and create a digital-focused marketing strategy (this great template from Zapier can help).
- Think of ways you can further personalize experiences. Update your copy, address emails to recipients directly and segment your lists so the right people are getting the right content at the right time.
- “10 impressive examples of AI in marketing,” (Social Media Strategies Summit)
- “6 digital marketing investments nonprofits can make to improve reach,” (Dot Org Solutions)
OPERATIONS, HR AND PLANNING CONSIDERATIONS
Nonprofits were forced to drastically rethink their operations activities during the early stages of the pandemic and continue to do so now. However, we’re seeing some more stability in the sector as nonprofits have learned what works and doesn’t work for their organizations in the pandemic.
Nonprofits are staffing up to pre-COVID levels but hiring will still be tough.
The good news is that nonprofits are starting to hire back workers and are staffing to pre-COVID levels. However, hiring will be tough. During the pandemic, many workers reevaluated what they wanted in a job and are being more selective. Others have chosen not to return to the workforce because of childcare and schooling challenges. And many decided to just retire instead of heading back to the office. Plus, small businesses have been established in record numbers, paring back the workforce even further.
More long-time leaders will announce retirements.
Many nonprofits are led by baby boomers and that generation is retiring in record numbers. Projections show that retirements will continue to peak even as far as 2030. This will leave a large void as founders, executive directors and senior leaders step down from their roles as there aren’t enough experienced leaders to fill those roles.
Hybrid and remote work are likely here to stay.
Like it or not, people enjoy the flexibility of working from home. Not every employee can have that luxury because of job responsibilities, but nonprofits may benefit from the flexibility that a hybrid or remote model can provide for their employees as some employees work better outside of a traditional office environment. Hybrid/remote work will also be an attractive incentive for new hires, opening up your hiring pool even more.
Financial stability will still be an issue for many NPOs.
Revenue losses, increased demand for services and inflation are all plaguing the nonprofit sector. While many are starting to recover financially (thanks in part to things like PPP, ESSR, the American Rescue Act and other government programs during the pandemic), there is still work to be done. Job openings in many areas like fundraising, service delivery and other areas are reducing revenue streams, and organizations that rely on ticket sales and entry fees may still have capacity limits at their venues. It will be important for nonprofits to keep a close eye on cash flow and reserves.
H3: The time is now for strategic planning.
The pandemic likely forced your organization to embrace a strategic mindset because of the changes you had to make. So, now is a good time to start looking at how those changes may have affected your long-term goals and adjust as necessary. You may not need an entirely new strategic plan - just an update may do. Either way, it will help you, your board and your team understand where you are headed. (Download our “Practical Guide to Nonprofit Strategic Planning.”)
What can you do?
- Younger workers will be filling many of those job openings and they’re very concerned about a company’s culture and values. Be honest about your organization’s culture. Do you have high turnover? Are your core values clear and do they drive your hiring and organizational decisions?
- Invest in paid digital campaigns if you have specialized jobs or larger job pools to fill, targeted paid campaigns on social media platforms, streaming services, Google and more can help you reach workers. (Contact us to learn more.)
- Have a clear policy on hybrid/remote work and a system for tracking time when workers aren’t in the office.
- Have a plan to build cash reserves.
- Develop contingency plans for in-person events.
- Invest in strategic planning.
Key links and resources
- “Employers face hiring challenge as boomers retire in record numbers,” SHRM
- “Where are all the workers? Many started their own businesses during the pandemic,” (CBS News)
- “Why millions of U.S. employees re quitting their jobs and how companies can navigate,” (HubSpot)
- “How shaping our workplace culture has transformed our business,” (Dot Org Solutions)
- “The importance of nonprofit strategic planning during uncertain times,” (Dot Org Solutions)
As we make our way through 2022, we are hopeful, optimistic and excited for a great year for the nonprofit sector. The pandemic has showed the world the important role nonprofits play in our communities and nonprofits have responded to community needs with an impressive level of resilience and response. We believe 2022 is just the beginning of a great wave of positive changes for nonprofits, especially the organizations that proactively respond to the ever-changing landscape.
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