Last January, we shared our predictions on the major trends that would impact the nonprofit sector in 2024. Now, as we enter a new year, we’re revisiting those predictions to see how they held up.
From workplace culture to technological innovation, nonprofits faced complicated challenges and embraced new opportunities that defined 2024 and will shape their focus in the year ahead. How did our predictions stack up? Here’s our assessment.
Prediction #1: Stronger Focus on Workplace Culture and DEI Initiatives
Grade: A
Our prediction about an intensified focus on workplace culture and DEI initiatives held true. Many nonprofits redefined their internal policies to foster inclusivity and extended these principles to their community programs. A survey by the Nonprofit Resource Hub, a platform dedicated to providing resources and support to nonprofit organizations, indicated that over 70% of nonprofits prioritized DEI training and policy updates in 2024. Moreover, organizations partnered with community leaders to ensure external outreach was genuinely inclusive and culturally sensitive. We observed this trend among many of our clients who sought to gain greater insights from the individuals they serve to ensure their voices were reflected when evaluating ongoing programs and planning new initiatives.
Still, challenges remain as some organizations struggle to balance these initiatives with funding constraints. Additionally, it would be remiss not to acknowledge the scrutiny DEI initiatives have faced and will continue to face in 2025. As public debates and policy changes intensify around DEI efforts, nonprofits may find themselves navigating complex dynamics while striving to maintain their commitments to equity and inclusion.
Prediction #2: Embracing New Technology and AI Integration
Grade: A
Overall, nonprofits made significant strides in adopting technology and AI to streamline operations. From donor management to program impact analysis, AI tools were increasingly utilized to optimize efficiency, as highlighted by The Anedot Blog, a platform focused on nonprofit fundraising and engagement trends. AI-powered platforms like ChatGPT were employed to analyze donor behavior, enabling targeted engagement strategies. However, concerns about data privacy and AI bias continued to grow. High-profile cases, such as those involving unintended AI biases, highlighted the need for transparency and ethical standards in AI use, prompting organizations to develop comprehensive AI usage policies.
Nonprofits are reportedly adopting AI faster than the for-profit sector, with 50% of nonprofits using AI compared to 47% of B2C businesses. This trend, driven by the sector’s limited time and capacity, make AI a valuable tool for increasing efficiency. Furthermore, a survey by FreeWill (a platform specializing in planned giving and fundraising tools for nonprofits) highlighted growing acceptance of AI, with 68% of respondents reporting AI use at work in 2024 – a significant jump from just 11% in March 2023.
At year-end, AI’s role became particularly impactful in crafting personalized fundraising appeals, donor thank-you notes and content for major giving campaigns. Tools like FreeWill’s “Willy” emerged as nonprofit-specific AI assistants, offering features such as generating donor-specific messages and simplifying complex donor engagement tasks. These advancements underscored AI’s potential to not only enhance productivity but also improve the quality of communication, fostering deeper donor relationships and maximizing fundraising outcomes.
Prediction #3: Adoption of Hybrid Work Models
Grade: B-
Hybrid work models became the norm for many nonprofits, reflecting a commitment to employee well-being and flexibility. According to a report by Cerini & Associates, a firm specializing in accounting and advisory services for nonprofits, over 60% of nonprofits adopted hybrid work structures in 2024. This approach improved staff retention and allowed organizations to attract a more diverse workforce by accommodating varied workstyles and personal circumstances. However, the transition wasn’t seamless for all. Some smaller nonprofits faced challenges with technology infrastructure and maintaining team cohesion in hybrid environments.
That said, our prediction wasn’t entirely accurate. Many organizations began reverting to in-office work policies this past year, citing reasons such as a need for greater collaboration, performance monitoring, and cultural alignment. For some nonprofits, the move to hybrid work was also a cost-saving measure, reducing overhead expenses by downsizing office spaces rather than being solely motivated by employee well-being. In retrospect, we were half-right: hybrid work remained a significant trend, but in some cases, it coexisted with increasing pressure to return to traditional office settings.
Prediction #4: Increased Focus on Community Engagement and Community-Led Initiatives
Grade: A-
Community-led initiatives gained momentum in 2024. Nonprofits increasingly prioritized listening to and collaborating with the communities they serve, resulting in programs that were more responsive and impactful. According to Antioch University, an institution with expertise in nonprofit leadership and social justice, nonprofits are transforming their approaches by fostering self-sufficiency and building stronger connections with their constituents.
A key element of community empowerment has been fostering self-sufficiency, enabling individuals to take control of their lives and build a stronger future. Nonprofits have played a crucial role in this process by providing essential resources, skills training, and education programs. Methodist Services in Philadelphia exemplifies this approach through its comprehensive community-focused programs. By offering housing assistance, early childhood education, and mental health services, Methodist Services empowers families to build stability and resilience. Their job readiness training programs also equip individuals with the skills needed to secure sustainable employment, helping them achieve greater self-sufficiency.
Effective stakeholder engagement, particularly with vulnerable populations, requires specific expertise and a strong commitment from leadership. Successful engagement demands leaders who are willing to listen, act on feedback, and remain guided by community input. Resistance to change can often arise, and there is a significant danger in asking communities what they need yet failing to deliver on those requests. Nonprofits must navigate these challenges carefully, ensuring they build trust and follow through on promises to avoid eroding relationships with their constituents.
Prediction #5: Donor Cultivation Among Millennials and Gen Z
Grade: A
The generational wealth transfer hit its stride in reshaping fundraising strategies, with nonprofits investing in cultivating relationships with younger donors. The Nonprofit Resource Hub, a platform that connects nonprofits with resources and insights to strengthen their impact, estimates that over the next two decades, approximately $84.4 trillion will be passed down from Baby Boomers, with about $11.8 trillion expected to flow into the nonprofit sector.
As this wealth transfer takes shape, nonprofits must adapt their strategies to meet the expectations of younger donors, including Millennials and Gen Z. These younger donors prioritize transparency, mission alignment, and immediate, tangible impact in their giving, contrasting with older generations who often focus on legacy giving and long-term institutional support. They engage with nonprofits digitally, often favoring grassroots organizations and innovative organizations, such as social enterprises, over traditional institutions.
Millennials and Gen Z donors value direct involvement, collaborative efforts, and storytelling that resonates with their personal values, reflecting a more hands-on and impact-driven approach to philanthropy. Social media platforms, particularly Instagram and TikTok, have played a pivotal role in reaching these donors, with digital campaigns proving highly effective. However, balancing traditional donor engagement with new strategies for younger audiences remains a challenge for some organizations. Those that embrace these changes are well-positioned to achieve meaningful growth. Nonprofits that successfully integrate digital engagement strategies and adapt to the values of these younger donors are likely to see sustained support and increased participation from this dynamic demographic.
Prediction #6: Navigating Economic Challenges with Strategic Planning
Grade: A
In 2024, nonprofit organizations, particularly those addressing basic needs like housing and food security, faced significant economic challenges. Inflation stretched resources thin, leading to increased demand for services. A report by Forvis Mazars, an accounting and advisory firm that provides insights on nonprofit financial health, highlighted that 71% of nonprofits experienced a rise in demand for their programs and services, while 68% anticipated cutting programs and services in the next one to two years due to financial constraints.
Strategic planning emerged as a vital tool for nonprofits navigating this economic uncertainty. Organizations that invested in clear, actionable plans were better equipped to adapt, secure funding, and meet community needs. Nonprofits that developed robust strategic plans demonstrated greater resilience in sustaining operations despite rising costs. The Center for Effective Philanthropy (CEP) reported that organizations with strategic plans were better prepared to meet ongoing challenges and future crises in their communities.
While economic pressures in 2024 posed significant challenges for nonprofits, those that engaged in strategic planning were better positioned to navigate these difficulties, ensuring continued support for their communities.
Grade Point Average: A-
Looking Ahead
In 2025, it’s clear that the nonprofit sector’s greatest strengths are its resilience and adaptability. Many of the trends we predicted for 2024 came to fruition, albeit with variations shaped by external challenges and internal capacities. From prioritizing inclusivity to leveraging technology and deepening community engagement, nonprofits are redefining how they create impact in a rapidly changing world.
We anticipate a continued emphasis on collaboration, innovation, and sustainable practices throughout 2025. Schultz & Williams remains committed to supporting nonprofits in navigating this ever-evolving landscape, and we’re excited to see what the future holds. Stay tuned for our 2025 predictions coming soon!
What trends did you observe in 2024? Share your insights with us as we continue to shape the conversation about the future of the nonprofit sector.
Sources:
Nonprofit Resource Hub. (2024). 2024 Nonprofit Trends. Retrieved from https://nonprofitresourcehub.org/2024-nonprofit-trends
Cerini & Associates. (2024). Hybrid Work Trends in the Nonprofit Sector. Retrieved from https://ceriniandassociates.com/2024-nonprofit-trends
Anedot. (2024). Nonprofit Trends: Engaging the Next Generation of Donors. Retrieved from https://www.anedot.com/blog/nonprofit-trends
Associated Press. (2024). GivingTuesday Estimates $3.6B Was Donated This Year, an Increase from 2023. Retrieved from https://apnews.com/article/1d040a71fbd292230209c8418369ca73
Forvis Mazars. (2024). 2024 State of the Nonprofit Sector Report. Retrieved from https://www.forvismazars.us/forsights/2024/02/2024-state-of-the-nonprofit-sector-report
American Society of Association Executives (ASAE). (2024). Strategic Imperatives for Nonprofits in 2024 and Beyond. Retrieved from https://www.asaecenter.org/resources/articles/an_plus/2024/01-january/strategic-imperatives-for-nonprofits-in-2024-and-beyond
Stanford Social Innovation Review (SSIR). (2024). Nonprofit Finances Now. Retrieved from https://ssir.org/articles/entry/nonprofit_finances_now
To learn more about how we can help, contact Soyoung Jung or visit https://schultzwilliams.com/strategic-business-planning/
