Four trends will impact your financial management

Many of us wish we had a crystal ball for strategic planning and financial forecasting. Marc Chardon, CEO of nonprofit software provider Blackbaud, came close to this wish in his article earlier this year, “Peering into the Nonprofit Crystal Ball.” He identified four key trends that will have the strongest impact on the nonprofit sector this year based on his observations and conversations with leaders in the nonprofit sector. These trends were also formed by conducting research at Blackbaud.

At Execute Now!, my staff is often in the position of helping nonprofits forecast their financial positions in order to improve their organizations’ strategic decision making about important funding matters. As a result, I thought I would share my interest in Chardon’s view of how nonprofits will be impacted by these 2013 trends.

1. Increase in charitable giving will not be dramatic: Considering the tough economic times we are currently experiencing as well as post-regulatory uncertainty, giving will be flat, says Chardon.

2. The nonprofit sector will go through a revaluing process: A nonprofit will be evaluated on the basis of its tax status as it relates to its business model. Millennials securing nonprofit degrees and Boomers leading organizations as a second career will change the sector climate.

3. Technology will play a major role for both nonprofits and their supporters: Chardon predicts a tipping point for nonprofits using technology in 2013. Mobile devices in the sector will more than double in 2013. Nonprofits will use technology in donor services, mission delivery and a more comprehensive approach to constituency relations.

4. The world is shrinking and philanthropic borders are broadening: Competition for donor support will broaden as we see wealth shift to developing countries. Technology has made it easy for donors to engage with causes no matter where they are around the globe.

So what does this mean for nonprofits as they head into 2013and beyond?

Enable responsiveness. It’s never been more important to make financial leadership apriority within your organization. You need strong administrative systems and a sophisticated financial infrastructure that will allow you to successfully respond to the changes ahead.

Give new models financial care. You need to reexamine your funding model and understand that once you undergo a potential change, it’s an evolving process. You need someone at the wheel, either through employment or outsourcing, who can help you monitor the new model’s outcomes and assist with adjustments and new directions as needed.

Worldwide causes’ increased competition for donors and a forecast for flat giving in 2013 require all nonprofits to ask the relevant question: Is your mission rooted in a “must-have” space that compels donors to give? If not, and your organization falls within the “softer services” silo, consider your options for alternative revenue sources or earned income. As you consider these options, do so with an eye on technology to determine how it can help you reach your goals.

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