Three Considerations for the Future of Nonprofits

In a 2020 Chronicle of Philanthropy survey of 172 nonprofit CEOs, 84 percent stated that the COVID-19 pandemic had a moderate or significant impact on their organization’s fundraising. Seventy-seven percent of nonprofit CEOs also stated that fees from services, ticket sales, and other small activities saw a marked decline. And we haven’t even experienced the trickle down yet of less discretionary spending, which is coming in the next few years.

What does that mean for the nonprofit sector?

The upcoming years are going to be precarious times for small- and medium-sized nonprofits, and those that are more highly leveraged (e.g., high liabilities, future expenses, etc.). Low cash flow or the number of days of cash on hand, as well as diminished grants and donor prospects will drive nonprofit CEOs and boards of directors to consider cutting costs, and services, in other ways.

Enter mergers, acquisitions, and other collaborations. There is no magic bullet to what will work in merging or partnering for organizations. Nonprofit leaders should consider these three things when entertaining possible partnerships:

1. Be clear about your organization’s mission and vision of the future your organization brings to addressing your community’s need. Will the partnership cause mission creep?

2. Write a business case that clearly identifies how the organizational partnership addresses the mission of the new or combined organizations.

3. Be careful of your own preconceived notions! Crafting these kinds of organizational relationships can have many relationship twists and turns. So, having an open mind is important to achieving success.

While following these steps can guide a nonprofit leader, you shouldn’t stop here! The Nonprofit Leadership master’s and graduate certificate programs at University of Denver’s University College can provide you with immediately applicable skills to ensure the success of your nonprofit venture. Learn more: universitycollege.du.edu/nfp.