Page 12 - 2025 Nonprofit Industry Trends

RUNNING YOUR NONPROFIT LIKE A BUSINESS - CONTINUED
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5. IMPLEMENT STRATEGIC PLANNING
Strategic planning is vital for setting long-term goals and identifying the
steps needed to achieve them. This includes conducting SWOT analyses
(Strengths, Weaknesses, Opportunities, Threats), setting SMART goals
(Specific, Measurable, Achievable, Relevant, Time-bound), and regularly
reviewing and adjusting plans based on performance and changing
circumstances.
6. EMBRACE TECHNOLOGY
Leveraging technology can streamline operations, improve communication,
and enhance program delivery. This includes using CRM systems for donor
management, data analytics for decision-making, and digital marketing
tools to reach a broader audience. Investing in technology can increase
efficiency and effectiveness. Nonprofits are expected to continue adopting
new digital opportunities to reach their audiences and improve efficiencies.
7. MONITOR AND ADAPT TO ECONOMIC TRENDS
The economic landscape in 2025 is expected to be challenging, with
increased demand for nonprofit services due to economic uncertainties and
social challenges. Nonprofits must stay informed about economic trends
and adapt their strategies accordingly. This includes diversifying funding
sources, building partnerships, and exploring new revenue streams. Many
financial experts remain optimistic that the economy will improve, which
could encourage donor generosity.
8. ENHANCE GOVERNANCE AND COMPLIANCE
Strong governance and compliance practices are essential for maintaining
trust and accountability. This involves having a clear governance structure,
regular board meetings, transparent financial reporting, and adherence
to legal and regulatory requirements. Good governance ensures ethical
practices and enhances credibility with donors and stakeholders.
WHY THIS PIVOT IS CRUCIAL IN 2025
The economic environment in 2025 is likely to be characterized by
increased demand for nonprofit services due to economic uncertainties
and social challenges. At the same time, funding sources may become
more competitive, requiring nonprofits to demonstrate greater efficiency
and impact. By adopting business-like practices, nonprofits can:
► Ensure Financial Stability: Building a surplus and diversifying funding
sources can provide financial security and enable growth.
► Improve Operational Efficiency: Strategic planning, technology adoption,
and ROI focus can optimize resource use and program effectiveness.
► Enhance Donor Relationships: Treating donors like customers can
increase loyalty and support.
► Attract and Retain Talent: Investing in staff development can build a
strong, committed team.
► Maintain Trust and Accountability: Strong governance and compliance
practices ensure ethical operations and enhance credibility.
By making this pivot, nonprofits can better navigate the challenges of 2025,
ensuring they continue to fulfill their missions and make a positive impact
on the communities they serve.
MATTHEW BURKE, CPA
PARTNER
CERINI & ASSOCIATES, LLP
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DAVID GOLDSTEIN JUDY SIEGEL
PARTNER & CHAIR OF NONPROFIT/TAX EXEMPT/
RELIGIOUS ORGANIZATIONS PRACTICE GROUP SENIOR STAFF ATTORNEY
PROBONO PARTNERSHIP
CERTILMAN BALIN, ADLER, & HYMAN, LLP
This is a particularly difficult moment for nonprofit leadership and for the sector. The changing political environment is As we transition into 2025, nonprofits face several critical challenges. One of the
producing increased scrutiny, as well as an increase in legislative, regulatory, and judicial challenges. This is combined with most significant is the uncertainty about the impact of the new administration
the pantheon of challenges already facing nonprofits, including pressures from funders, a shifting fundraising environment, on the country, the economy, and the nonprofit sector. While we may speculate
a shifting workforce and workplace, as well as the continuing need to upgrade information technology infrastructure and on shifts in government funding and the government’s agenda in sectors where
protect against cybersecurity threats.
nonprofits regularly serve as society’s safety net (environment, educational equity,
health and human services), we can’t know what will actually transpire.
In the face of this array of challenges, nonprofit leaders cannot and must not take their eyes off the proverbial governance
ball. I often point out to my clients that nonprofit governance is not rocket science. While this reality is comforting, and Relatedly, nonprofits are already facing the dual pressures of diminishing resources
good governance is readily attainable, it is not easy. It takes a continual commitment to systematically implementing
governance requirements and best practices. This commitment and level of effort needs to be consistently maintained – and increasing demand for services. As funding sources (most likely) continue to
even in times such as these, where nonprofits face so many other challenges. Quite simply, nonprofit leaders cannot afford constrict, nonprofits will need to utilize various strategies to increase sustainability,
including shared services agreements, program cut-backs, and mergers or other
to divert their attention from governance requirements. Governance requirements are, quite literally, the law. Failure to
comply, no matter what the extenuating circumstances may be, creates a crescendo of risks that jeopardize the operations, forms of strategic partnerships.
funding, and reputation of a nonprofit, and ultimately can compromise its ability to fulfill its mission. Moreover, governance
failures can, and far too frequently do, lead to breach of fiduciary duty claims against officers and Board members of Finally, the ongoing challenge of hiring and retaining qualified staff will remain a
pressing issue as nonprofits struggle to offer competitive salaries, provide workers
nonprofits, which in turn can lead to personal liability for officers and Board members. Nonprofits are well-advised to avoid
a descent down these slippery slopes, and to renew and maintain their commitment to good and sound governance, as well with living wages, and introduce innovative alternative benefits to make working in
as to compliance with all applicable governance requirements, particularly in these highly charged and challenging times. the nonprofit sector more attractive.
It starts with the basics, like properly electing your Board and delivering the required annual financial report – each at the To successfully navigate these challenges, nonprofits will need to engage in
mandatory annual meeting. You need to always be sure that all of your corporate actions are properly authorized, and thoughtful introspection and create a detailed assessment of the programs and
to make sure that all of your activities fall squarely within the purposes set forth in your Certificate of Incorporation. You services they provide to determine if they are sustainable. Organizations must
need to make sure that your Bylaws comply with the many requirements and mandatory provisions of the Not-for-Profit consider if they are employing the most cost-effective methods for implementing
Corporation Law, and that your policies (for example, your Conflict of Interest Policy, Investment Policy, and Whistleblower their programs and services, and also determine if they are best-equipped to provide
Policy) and committees comply with all applicable legal requirements. the services. Nonprofits will need to be open to the possibility that partnerships or
Don’t forget succession planning and strategic planning for the long-term sustainability of the organization and its ability collaborations may better serve the community. Perhaps there are other nonprofits
to accomplish its mission. And throw in the need to do all of the above (and more that we don’t have space to go into here) with whom they can partner, or even transition their services to other providers.
while still building and maintaining engagement with the Board and staff, as well as with the organization’s supporters and Additionally, nonprofits should focus on creating non-financial reasons for workers
to choose to remain in the sector, like flexible work arrangements, robust training
donors. Did I mention the fundamental importance of maintaining appropriate internal financial controls, and assuring programs, mentorships, and offering other career and personal development
compliance with the ever expanding raft of regulations and governance requirements facing nonprofits? You need to do all
of this from the twin imperatives of protecting both the organization and the individual Board members and officers from opportunities.
liability.
Nonprofits will need to continue to evolve, and to continue to adapt, and now at an unparalleled pace because of the
quantity, quality, and diversity of the challenges facing them in the upcoming year. And all the while doing this while
keeping their eyes carefully trained on the proverbial governance ball that is always up in the air.