Nonprofit Trends Report: Technology is Driving Relevance and Growth

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Getty/Thomas Barwick

Digitally mature nonprofits exceed their organizational goals, with a 4x increased likelihood of exceeding mission goals. Nonprofits thrive on relationships. According to new research on nonprofits, executing a nonprofit mission requires strong connections with stakeholders—including employees, donors, volunteers, program participants, and more.

Salesforce’s fifth edition of the Nonprofit Trends Report reveals how technology-adopting organizations have the strongest relationships and highest goal attainment rates—regardless of size, revenue, or location. Here are the four main takeaways:

  1. The strategic use of technology is directly related to improving organizational efficiency and cross-business performance. Nonprofits with a high degree of digital maturity are more likely to exceed their goals and build stronger relationships with all stakeholder groups.
  2. 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 employee burnout. These organizations have also gone further towards their goals for climate action and diversity, equity and inclusion (DEI).
  3. Nonprofits recognize the importance of technology to achieve their goals, but struggle to realize their full potential. While nearly three-quarters (74%) of nonprofits said digital transformation is a “must have” or “must have”, only 12% scored highly on the Salesforce for Nonprofits Digital Maturity Index.
  4. Barriers to digital maturity can include budget or resource constraints and competing priorities. Nonprofits are doubling down on employee retention and well-being to offset internal challenges such as increased employee turnover and employee burnout. Externally, nonprofits are focusing on raising awareness and fundraising to diversify and rebuild connections with supporters. Overall, nonprofits feel resilient and ready for the future.

My main takeaway for this report will be on using technology to drive better outcomes and stakeholder benefits. The Nonprofit Trends Report is a 58-page document with incredible insights, but I wanted to focus this post on digital transformation and technology use in nonprofits.

The Landscape of Nonprofit Organizations

In the past 12 months, most nonprofits met or exceeded their overall goals, specifically their program, financial, and mission goals. Despite high goal attainment rates, nonprofits face challenges ranging from being aware of employee retention to measuring impact. The top four challenges for nonprofits are: 1. Awareness, 2. Retaining employees, 3. Hosting live events and controlling expenses.

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Nonprofits work to raise awareness and retain employees.

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In the year ahead, nonprofits expect challenges related to staffing and economics, technology, finances, and fundraising. This is reflected in how nonprofits are shifting their priorities over the coming year, with 48% placing greater emphasis on fundraising, 46% placing greater emphasis on employee retention, and 44% placing greater emphasis on employee well-being.

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% said they trust society to trust nonprofits to do the right thing.

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Employee retention and well-being are top priorities, second only to fundraising.

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Nonprofits report weaker relationships with volunteers and donors—two stakeholder groups critical to mission delivery and organizational continuity.

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The strength of stakeholder relationships varies by industry.

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Digital transformation is driving growth and impact

Over the next 12 months, nonprofits will prioritize cybersecurity and privacy (39%), adding new programs and services (27%), or implementing a remote work model (26%). Online services that increase revenue and engagement are also a top consideration for nonprofits.

A significant portion of nonprofits (46%) say they are able to make strategic decisions quickly. These agile nonprofits describe their organizations as technology adopters (51%), adaptive (51%), empowering (50%), forward-looking (48%) and innovative (48%). These characteristics constitute a positive “change mindset” that enables nonprofits to pursue strategic growth and become more resilient.

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Nonprofits are most likely to act on cybersecurity, growth and the shift to an online model.

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Advice from qualitative interviews with nonprofit leaders on innovation, adaptation, and change:

  1. pragmatic. Hire experts or work with trusted private sector advisors, especially to provide guidance on technical or legal issues; seek expertise from banking partners, board members and corporate partners.
  2. Commercialize the benefits of donors. Consider the benefits of “packaging” being a supporter, making it easy for them to understand and act on.
  3. Listen to improve. Obtain feedback from internal and external stakeholders using surveys and other listening tools.
  4. Aims to expand impact. Consider both the new and changing needs of end users as well as the needs of the economy as a whole – for example, improving the skills of users in areas where there are economic gaps.
  5. collaborative thinking. Understand your organization’s skill set and find peers to fill the gaps. Explore partnerships with other nonprofits and businesses.

Nearly three-quarters (74%) of nonprofits say digital transformation is critical, and organizations that describe themselves as “technology adopters,” “forward-looking,” or “empowering” are more likely than their peers to say digital transformation is a must -Have.

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Nonprofits that rely heavily on technology are more likely to see digital transformation as important.

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An important takeaway from the report is how nonprofits are linking data to impact. Most nonprofits consistently use data to design programs and services (75%), personalize communications with stakeholders (74%), and make decisions (73%). Lower-ranked uses of information include problem solving (69%) and predicting revenue (58%).

More than half (55%) of nonprofits say their organization needs to invest in technology to increase fundraising, and 60% of nonprofits say their donors want a better experience than what their current technology offers.

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Technology helps nonprofits be more efficient and more impactful.

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Technology providers must better support nonprofits. Only 36% of nonprofit professionals are “very satisfied” with the technology they need to do their jobs. The least satisfied with the integration of data sources and systems (34% very satisfied) and the usability of easy-to-use reporting tools (33% very satisfied).

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Digital maturity strengthens relationships with all stakeholders.

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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 to make progress in organizational efficiency or mission impact (93% vs. 50%). They are also 3.5 times more likely to achieve mission goals than their less digitally mature peers (38% vs. 11%).

Digital transformation is the path to maturity. Cybersecurity and privacy (34%), cost efficiency (33%), and data management and optimization (32%) were the top reasons for digital transformation, the report noted. Impacts such as improving stakeholder relations (23%), competitive advantage (19%) and meeting stakeholder expectations (18%) ranked lowest.

Digital transformation is a tough job that requires organizational commitment, the right culture, people and processes. Without a commitment to resources and clarity of vision and execution, transformation can be difficult and slow. The most frequently cited 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 personnel to implement and manage the technologies (28%) and a lack of understanding of these technologies (26%).

To learn more about Salesforce’s Nonprofit Trends report, you can visit here.

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