A majority of nonprofit executives (63%) remain optimistic about their organizations’ futures despite the chaos and negative impact of federal funding cuts and the need for more direct services. Almost half (48%) expect revenue growth during the next 12 months.
The adoption of artificial intelligence (AI) among nonprofits remains in the early stages, with only 21% of nonprofit leaders polled responding that their organizations are leveraging AI in their strategies. Despite this slow embrace, nonprofit professionals polled who are using AI responded that they are finding significant value in content generation, marketing, and analytics.
Those are a few of the results in Momentive Software’s latest annual Nonprofit Trends Report, “Weathering Federal Uncertainty: Nonprofit Operational Trends.” Momentive Software engaged Edge Research to conduct an online survey of 306 adults in the United States who work at nonprofits at a director/manager or higher level.
Increasing revenue during the next 12 months is a top priority for 60% of the respondents. Twice as many organizations showed revenue increases (44%) versus decreases (22%) during the past year. Organizations that experienced revenue growth saw upticks across multiple funding channels and are significantly more likely to have diversified their revenue streams.
Nearly one-third of respondents consider their organizations early adopters of technology, while another one-third identify as laggards. While nearly half of nonprofits grew revenue last year, early-tech adopters had more revenue streams than other nonprofits with an average of 5.14 revenue avenues.
Tying revenue to tech adoption can seem contradictory, given the outlaying for the technology and training. It’s baby steps when it comes to using AI. “It is used to summarize or create content, that’s the first round of adoption,” said Meghan Snare, senior vice president of product management at Momentive Software. “Beyond that point it is simplification, unlocking insights and decision-making,” Snare said.
While 66% of nonprofits receive grant funding, many of the leaders polled are anticipating foundation giving to compensate for decreased federal grants. However, private foundations would need to increase their grantmaking by 282% to offset anticipated government funding reductions, according to adat from the nonprofit Candid and cited in the Momentive report. The report’s data reinforces the importance of strength in numbers when it comes to organizations partnering together to power through uncontrollable change, according to Snare.
“What our data shows is that organizations that embrace technology and invest in donor retention and collaboration aren’t just surviving, they’re charting a path to sustainable growth,” said Tirrah Switzer, vice president of product marketing at Momentive Software. “These aren’t just operational strategies. They are mission multipliers that help nonprofits serve their communities more effectively, regardless of the challenges ahead.”
The research data showed that 56% of organizations with a donor retention strategy experienced revenue growth and reported donor retention rates of 77% versus 61% for organizations lacking a retention strategy.
Alternatively, 46% of respondents report their organization had no donor retention strategy at all. “This opens the door to competitive differentiation for those who are willing to invest in a proactive approach to retaining individual donors,” according to Switzer.
Amid funding ambiguity, many organizations are pivoting their current strategies to prepare for the year ahead. Collaboration has emerged as a key adaptation strategy, with 82% of nonprofits planning to maintain or increase their partnerships with similar-mission organizations, and 46% specifically planning to increase their collaborative efforts.
For the full 35-page report can be found here …
