Page 3 - 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!