Nonprofit Trend Report: Technology Drives Relevancy and Growth
Digitally mature nonprofits exceed their organizational goals, including 4 times as likely to exceed mission goals. Nonprofits thrive on relationships. Delivering on a nonprofit’s mission requires strong communications with stakeholders—including employees, donors, volunteers, program participants, and more, according to the latest research on nonprofits.
The fifth edition of the Salesforce Nonprofit Trends Report shows how organizations that have adopted technology have the strongest relationships and the highest goal achievement rates — regardless of size, revenue or location. Here are the four main points:
- The strategic use of technology is directly related to improving 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 culture and the nonprofit workforce. Digitally mature nonprofits report more motivated and optimistic employees, a more positive organizational culture, and lower levels of employee fatigue. These organizations are also working to achieve their goals related to climate action and diversity, equity and inclusion (DEI).
- Nonprofits understand the importance of technology to achieve their goals but struggle to implement it to its fullest potential. While nearly three-quarters (74%) of nonprofits say digital transformation is a “must-have” or “must,” only 12% score highly in the Salesforce Digital Maturity Index for Nonprofits. .
- Barriers to digital maturity may include budget constraints or competing resources and priorities. Nonprofits maximize employee retention and wellbeing to address internal challenges such as increased employee turnover and employee burnout. Externally, nonprofits focus on awareness and fundraising to diversify and rebuild relationships with their supporters. In general, nonprofits feel resilient and ready to face the future.
My main findings in this report will focus on using technology to achieve better outcomes and stakeholder benefits. The Nonprofit Trends Report is a 58-page document with incredible insights, but I’d like to focus this post on digital transformation and the use of technology in nonprofits.
Over the past 12 months, the majority of nonprofits have met or exceeded their overall goals, particularly their program, financial, and mission goals. Despite high goal achievement rates, nonprofits face a host of challenges ranging from awareness to employee retention to impact measurement and beyond. The top four challenges for nonprofits include: 1. Awareness, 2. Retaining employees, 3. Hosting personal events and controlling expenses.
In the year ahead, nonprofits anticipate challenges related to employment, the state of the economy, technology, finance, and fundraising. This is reflected in how nonprofits will change their priorities over the next year with 48% placing more emphasis on fundraising, 46% on employee retention, and 44% on employee welfare.
Today, nonprofit leaders are slightly more optimistic about their 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’s right.
Nonprofits report weaker relationships with volunteers and donors—two stakeholder groups critical to mission execution and organizational continuity.
Digital transformation drives growth and impact
In the next 12 months, nonprofits prioritize cybersecurity and privacy (39%), add new programs and services (27%), or implement remote work models (26%). Online services to increase revenue and participation are also at the top of the interest for nonprofit organizations.
A significant minority of nonprofits (46%) say they are quick at making strategic decisions. These agile nonprofits describe their organizations as technology embracing (51%), adaptive (51%), empowering (50%), forward-looking (48%), and innovative (48%). These traits form a positive “change mindset,” which positions nonprofits to pursue strategic development and become more resilient.
Tips from qualitative interviews with nonprofit leaders about innovation, adaptability, and change:
- Be practical. Hiring specialists or engaging with trusted private sector advisors, particularly for guidance on technology or legal issues; Look to banking partners, board members and corporate partners for their expertise.
- Benefit Marketing for Donors. Think about the concept of “encapsulation” for the benefits of becoming a supporter to make it easier to understand and act on them.
- Listen to improve. Use surveys and other listening tools to get feedback from stakeholders, both internally and externally.
- Aiming to double the effect. Think at the same time about the new and evolving needs of the end user and the needs of the economy as a whole – eg upgrading the skills of users in areas where there are gaps in the economy.
- Think collaboratively. Build on your organization’s skill set(s) and find peers to fill in the gaps. Explore partnerships with nonprofits and other businesses.
Nearly three-quarters (74%) of nonprofits say digital transformation is essential, and organizations that describe themselves as “tech-embracing”, “forward-looking” or “enabling” are more likely than their peers to say digital transformation is a must-have.
An important finding from the report is how nonprofits relate data to impact. Most nonprofits consistently make use of data to design programs and services (75%), allocate communications to stakeholders (74%), and make decisions (73%). The lowest ranked uses of information include problem solving (69%) and income forecasting (58%).
More than half (55%) of nonprofits say their organization needs to invest in technology in order to increase fundraising, and 60% say donors expect a better experience than what current technology provides.
Technology providers must do a better job of supporting nonprofits. Only 36% of nonprofit professionals are “very satisfied” with the technology they have to do to do their jobs. Less satisfaction with integration of data sources and systems (34% very satisfied) and availability of easy-to-use reporting tools (33% fully satisfied).
Technology providers must also do a better job of educating nonprofits about the importance of digital maturity. Digitally mature nonprofits outperform their peers, regardless of the organization’s revenue, number of employees, or geographic location. Organizations with high digital maturity are 1.9 times more likely (93% vs. 50%) to improve organizational efficiency or mission impact. They are also 3.5 times more likely to achieve task goals (38% vs. 11%) than their peers with low digital maturity.
Digital transformation is the path to maturity. The report states that cybersecurity and privacy (34%), cost efficiency (33%), and data management and optimization (32%) are the main reasons for digital transformation. Effects such as improving relationships with stakeholders (23%), competitive advantage (19%), and keeping pace with stakeholder expectations (18%) rank lower.
Digital transformation is hard work and requires organizational commitment, the right culture, people, and processes. Without commitment of resources, clarity of vision, and implementation, transformation can be difficult and slow. The most common barriers to digital transformation are 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 Salesforce Nonprofit Trend Report, you can visit here.
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