Page 2 - 2024 Nonprofit Industry Trends
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                                                   2024 NONPROFIT UPDATE

                                                                                                                                                                                 While  the  economy  was  still  tight  in  2023,  with  rising  interest  rates  and
                                                                                                                                                                                 inflation, there was clearly an improvement, with the stock market rebounding,
                                                                                                                                                                                 fundraising showing an up-tick, and inflation levels slowing down (anticipated
                                                                                                                                                                                 to be about 3% for 2024). We anticipate interest rates to level out and even
                                                                                                                                                                                 decline during 2024, with inflation dropping down to more manageable levels.
                                                                                                                                                                                 So, while we anticipate fundraising to continue to creep up in 2024, with the
                                                                                                                                                                                 anticipation of a highly contested presidential election, we may see dollars
                                                                                                                                                                                 diverted  from  some  of  more  traditional  nonprofits  to  ones  that  are  more
                                                                                                                                                                                 aligned with the election and the issues. As baby boomers continue to age,
                                                                                                                                                                                 we anticipate a significant level of wealth transference, with an estimated $84
                                                                                                                                                                                 trillion of assets will be shifted to heirs and charities between now and 2045.
                                                                                                                                                                                 Nonprofits that have not already started discussing planned giving with their
                                                                                                                                                                                 donors and/or implemented planned giving strategies are behind the curve.
                                                                                                      Technology  touches  every  aspect  of  what  we  do,                      Furthermore, NY City, through its Program to Eliminate the Gap (PEG), has        Another area of focus for 2024 for the sector is on organizational leadership.
                EDITOR                                                                                and in 2024 it will become even more entrenched                            already made a 5% cut.  With budget shortfalls anticipated at 6% for 2024,       It  is  anticipated  that  75%  of  nonprofit  leaders  plan  to  leave  their  current
        KEN CERINI, CPA, CFP, FABFA                                                                   as  AI  and  machine  learning,  virtual  reality,                         8% for 2025, and 9% for 2026, we anticipate additional budget cuts over          positions in the next 5 to 10 years. This is going to put more emphasis on
        CERINI & ASSOCIATES, LLP                                                                      the  Metaverse,  integrated  systems,  and  smart                          the  next  several  years.  This  doesn’t  bode  well  for  nonprofit  organizations.     organizations to build a strong middle management level. With 27% of the
          MANAGING PARTNER                     A   s  we  turn  the  page  on  2023,  and  begin  our   everything will continue to gain stickiness.  We will                    Furthermore,  NY  State  is  in  a  similar  position  with  an  anticipated  budget   workforce  anticipated  to  be  Gen  Z  by  2025,  it  will  also  be  important  for
                                                   journey  through  2024,  we  need  to  consider    lean on technology for service delivery (monitoring                        shortfall  for  next  year  of  approximately  $4.3  billion  and  additional  budget   nonprofits to retrain/retool their managers, as many of them learned that
                                              where we have been in order to understand where         patients, controlling energy and resources, service                        shortfalls in fiscal 2026 and 2027 capping out at an anticipated shortfall for   management  style  from  their  managers  who  were  baby  boomers,  and  the
      Ken is the Managing  Partner of Cerini   we are going.                                          deployment, etc.), to curtail employment shortages                         fiscal 2027 of $7.7 billion. This coupled with the ending of COVID subsidies     values  held  by  baby  boomers  are  very  different  from  those  of  the  Gen-Z
      & Associates, LLP and is a partner in                                                           (utilizing  software to streamline processes  and                                                                                                           workforce.  Failure to align management and staff values will result in higher
      the  Firm’s  nonprofit  and  educational                                                                                                                                   from the federal government means that belts will need to be tightened during
      practice groups.  He has nearly 40 years   During 2023 we saw the end of the COVID pandemic     perform lower-end tasks), to streamline back-office                        the next few years.  It also means that nonprofits will need to seriously review   turnover rates.
      of  experience  working  with  nonprofit   …that doesn’t mean COVID is gone, it just means      processes  and  improve  operations,  and  to  make
      organizations and is considered a leader                                                                                                                                   government contracts in conjunction with their operations and missions to        In 2023, we started to see organizations start to reinstate strategic planning
      in the field; serving on Boards; educating   that it is not having the same devastating impact   information and data more available and accessible.                       determine if these contracts are feasible and appropriate for the organization
      nonprofit  agencies;  promoting  and    and loss of lives that it had prior. COVID is something   Nonprofits  will  need  to  develop  technology  goals                                                                                                    …something  we  expect  to  see  more  of  in  2024  as  organizations  begin
      advocating for the sector; and providing   we will need to continue to live with, similar to the                                                                           to sign.                                                                         focusing on organization direction, pricing structure, technology usage, risk
      accounting,  tax,  and  consulting  advice                                                      to  determine  how  they  can  best  incorporate
      and services to nonprofits of all sizes.    flu, and it will continue to negatively impact some   technology into all phases of their business models.                     Projected  budget  cuts  are  coming  on  top  of  anticipated  rises  in  service   and more. This includes a fresh look at Board involvement and engagement,
                                              of  the  most  vulnerable  parts  of  our  population.     Technology  committees  should  be  established                         demand, as the spread between haves and have nots continue to rise and           proper governance, mission, program relevance, and more.  Everything should
      Cerini & Associates, LLP works with over
      200 nonprofit organizations and is one   Furthermore,  we  are  still  uncertain  as  to  the   to review all aspects of operations, explore areas                         labor costs continue to trend up. Raises are anticipated to be between 2% and    be on the table during these discussions as organizations need to reshape
      of the leading nonprofit firms in the New   long-term effect of long-COVID on our population    for integration, develop acceptable use and other                          3% for 2024, with some nonprofits providing smaller raises at the beginning      themselves to maximize their relevancy, effectiveness, and impact.
      York metropolitan area.
                                              and  our  healthcare  system.  Even  so,  COVID  has    policies,  and  develop  safety  protocols  around                         of the year with hopes of additional raises or bonuses once they understand      We are anticipating a mixed year for 2024 with increases in service demand,
                                              forever  changed  the  way  we  think,  do  business,   technology,  including  cybersecurity  concerns,                           how their funding will be impacted when state and local budgets are released.     a leveling of inflation and interest rate growth, some positive, but tempered,
                                              communicate, socialize, and more, and has placed        proper access controls, and more. Technology will                          Staffing shortfalls continue to be a key issue for the sector; however, we might   fundraising outcomes offset by declines in government spending, an uptick
              (631) 868-1103                  a greater emphasis on our reliance on technology.       continue to expand and improve how the nonprofit                           see this ease a little as unemployment is anticipated to rise to around 4.4%     in unemployment, and a political landscape that could get ugly and divisive.
        KCERINI@CERINICPA.COM                 This reliance, and our need to more deeply embrace      sector does business, so organizations should use                          by the end of 2024. Nonprofits also need to revisit their benefit packages and
          WWW.CERINICPA.COM                   technology, will continue into 2024 and beyond as       2024 as a steppingstone into enhanced technology                           communicate with staff to ensure that they are aligned.                          Welcome to 2024, please keep your seat belts fastened, your hands, arms,
                                              one of the key trends we need to consider.              reliance.                                                                                                                                                   and legs within the vehicle, and enjoy the ride!
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