The poor economy, a changing funding environment, and pressures for increased transparency are all trends with long term impacts on nonprofits.

Summary of article points written by Severson staff:

• The economy is impacting marketing and fundraising
• Need to nurture young nonprofit workers and listen to their ideas
• Social media: deciding how and if to have a presence
• Integrating web technologies into your organization
• Fundraising challenges: changes are happening quickly, foundations moving away from overhead ratios to examining impacts, a large generational transfer of wealth is coming
• Volunteers are changing, those who want to serve single days
• Transparency: more websites reporting on and ranking nonprofits
• Conservative supporters need to be engaged
• Board diversity is greatly needed, young people with social networking experience, more minorities
• Changing nonprofit world: mergers and strategic restructuring, a new legal form: L3C corporations nonprofit/profit hybrid
• Social enterprise is ever evolving
• New nonprofits pushing brand over mission

What trends will affect you the most? Here's a Synopsis, (2010, May/June). Nonprofit World. http://www.snpo.org [posted 06/29/2010]

Nonprofits face mounting challenges in 2010: reduced funding, growing demand on services, finding new donor streams, workforce strain, using volunteers effectively and proving program effectiveness.

Summary written by Severson staff from The Chronicle of Philanthropy report on the 10 emerging forces in 2010:

1. Cuts in government grants and contracts, state spending cuts, end to stimulus money and county and local budget crunch.
2. Safety net strain: recovery from the recession will be long; demand for basic services will continue, continued high unemployment, new poor.
3. Focus on small and medium size donations - with cutbacks in state aid and grants; increased focus on online giving.
4. Foundation and corporate grant outlook is grim; grant makers were hit by investment losses - greater call for foundations to spend their money on basic needs.
5. Charity workforce showing strain, staff burnout from salary freezes, cutbacks in pay and benefits, layoffs, and the challenge of increased work load with no compensation for those workers left.
6. Charity pay becoming more scrutinized, IRS is reviewing charity budgets.
7. Rising donor-charity tensions, donors want to specify how their donations are spent, charities want more unrestricted funding. Charities will increase their push for financial support for administrative and infrastructure rather than specific programs.
8. Outcomes, Impacts, Evaluations: growing demand for showing programs are having an impact, more nonprofit watchdogs, Also, a new effort to change the way charities are evaluated. Effort to get away from looking at administrative spending to impact of a charity or how good are they at getting results.
9. Rise in Volunteerism: great interest in volunteering and national service, charities need to learn how to orient, manage, as well as recruit volunteers into their organizations.
10. Online revolution is stalled, nonprofits have connected with supporters in many ways online, however how to raise funding online is still a work in progress.

10 Emerging forces in 2010: what the nonprofit world will face in a new year. (2009, December 10). The Chronicle of Philanthropy. Retrieved from http://philanthropy.com

Summary written by Severson staff of trends and advice from the Chronicle of Philanthropy online discussion on emerging forces in 2010:

• Nonprofits will have to develop new funding streams relying on government funding the way it is currently structured can not be sustainable.
• Boomers are looking for engaging volunteer opportunities.
• "I saw an increase in the number of folks giving when we changed the way we told our story. Focus on those you serve and the impact of your work. People want to help, they just can't help at the same level as in previous years. The hope is people still want to help, we have to keep them involved and informed."
• Engage local media outlets in your mission, feed them your success stories.
• There has been an increase in pressure from municipalities to get some types of revenues from nonprofits to make up for lost tax revenues.
• More third party website reporting on nonprofits, without clear guidelines (i.e. GiveWell) use of rating systems is questioned.
• Board member burn out.
• Fund raising collaboration between nonprofits.
• Increased interest in exploring ways to develop shared back office services and other collaborations.
• Wake up call to diversify both investment portfolios and funding.

Transcript: 10 Emerging forces in 2010. (2009, December 10). The Chronicle of Philanthropy. Retrieved from http://philanthropy.com [posted 06/29/2010]

Calls for replicating programs that work and a need to maximize the impact of limited resources have increased the focus on "scaling" techniques within the nonprofit sector.

[About fifteen years ago] social entrepreneurs began developing new models for expanding organizations through replication in new locations.[...] These organizations have found that scaling is anything but an exercise in cutting cookies, as it requires not only fidelity to core processes and programs, but also constant adjustments to local needs and resources.[...] Today, there may be no idea with greater currency in the social sector than "scaling what works." In its first year, the Obama administration announced several multimillion- or billion-dollar programs that focus on expanding proven-effective programs to new locations. As the president put it, "Instead of wasting taxpayer money on programs that are obsolete or ineffective, government should be seeking out creative, results-oriented programs [...] and helping them replicate their efforts across America." [...] This effort builds on the work of innovative social entrepreneurs and represents an opportunity to address some of society's most intractable problems. At the same time, however, nonprofit leaders and philanthropists are searching for ways to scale impact beyond adding sites. Put simply, the question now is "How can we get 100x the impact with only a 2x change in the size of the organization?" [...] Finding ways to scale an organization's impact without scaling its size is the new frontier in the field of social innovation.

Bradach, J. (2010, Summer). Scaling Impact. Stanford Social Innovation Review. Retrieved from http://www.ssireview.org/images/articles/2010SU_FirstPerson_Bradach.pdf [posted 06/29/2010]

The Internal Revenue Service's work plan calls for a closer examination of charitable spending and governance.

Charitable Spending Initiative EO [Exempt Organizations] will begin a long-range study to learn more about sources and uses of funds in the charitable sector and their impact on the accomplishment of charitable purposes.... Governance EO will continue its work in the nonprofit governance area by focusing on three areas. First, it will develop a checklist to be used by agents in examinations of exempt organizations to determine whether the organization's governance practices impacted the tax compliance issues identified in the examination and to educate organizations about possible governance considerations. Second, EO will commence a training program to educate its employees about nonprofit governance implications in the determinations, rulings and agreements, and education and outreach areas. Third, EO will begin identifying Form 990 governance questions that could be used in conjunction with other Form 990 information in possible compliance initiatives, such as those involving executive compensation, transactions with interested persons, solicitations of noncash contributions, or diversion or misuse of exempt assets.

NOVEMBER 2008, EO Annual Report and FY 2009 Work Plan, Internal Revenue Service, Exempt Organizations, http://www.irs.gov/pub/irs-tege/finalannualrptworkplan11_25_08.pdf [posted 1/22/2009]

There is much hope and some caution about what the Obama administration will be able to do to help nonprofits.

If Mr. Obama fulfills his campaign promises, he will greatly expand programs like AmeriCorps, which provides money to charities that operate national-service programs; create new service opportunities for young people and older people; establish a Social Entrepreneurship Agency to coordinate federal programs that help innovative charities; and secure new funds to stimulate entrepreneurial social projects.

NOVEMBER 27, 2008, A New Era of Nonprofit Engagement? Charities Hope Obama Will Expand National-Service Programs, by Suzanne Perry, The Chronicle of Philanthropy, http://philanthropy.com [posted 1/22/2009]

Proponents of the federal government's increasing its involvement with charities argue that the size and scope of problems facing the United States today requires strong coordination. They say government has a vested interest in helping charities become more effective.... Leslie Lenkowsky, a professor of public affairs and philanthropic studies at the Center on Philanthropy at Indiana University, says that charity leaders who call for more government involvement in the nonprofit world are well-meaning, but he thinks that they underestimate the strings that come with government money.

OCTOBER 16, 2008, Considering New Federal Agencies With a Nonprofit Focus, by Nicole Wallace, The Chronicle of Philanthropy, http://philanthropy.com [posted 1/22/2009]