2021 | Nonprofit Predictions
“Occurrences in this domain are beyond the reach of exact prediction because of the variety of factors in operation, not because of any lack of order in nature.”Albert Einstein, German physicist (1879-1955)
The past several years, an important function of Carolyn’s Nonprofit Blog has been offering predictions for the year ahead. The year 2020 has been fraught with turmoil on many levels. I admit, predicting what will happen next year is somewhat of a challenge.
Having said that, many of my prior predictions have come to the fore for our nation and the world. Hence, you may wish to pay attention to my musings again this year.
I normally address federal funding in my predictions, and I noted last year that with Republicans dominating the federal government, that should result in government grants being fewer in number. But the government grew under President Trump.
From Brookings, “Despite campaign promises to the contrary, Trump opened the contract and grant spigots instead, adding more than 2 million jobs to the blended federal workforce, including 1 million in the Departments of Defense, Transportation, and Health and Human Services alone” (October 7, 2020). Having worked with many leading Texas Republicans over the years in philanthropy, I find that surprising.
The U.S. Department of Health & Human Services has expanded its work with a variety of Coronavirus grants and programs. The website, Tracking Spending – Increasing Accountability shares eye-opening information about the phases of relief provided by the federal government during 2020, and it provides a helpful overview of funding provided to individual states. I urge you to review it.
The rise of COVID-19 was a surprise to many, and clearly, significant federal action was required in 2020. But as the U.S. National Debt Clock notes, our government is burdened by debt. On this insightful website, you can watch our nation’s debt climb by the minute, and you can compare that figure to tax revenues, for instance, and see what sectors of the federal government are responsible for the greatest levels of debt, among them Defense, Student Loans, Medicare and Social Security.
While I cannot imagine the federal government being able to continue piling up debt, some well regarded experts think this concern is unfounded. Read on Bloomberg, “Yellen’s Go-To Measure Shows U.S. Debt Is Still Getting Cheaper“ (March 16, 2021).
Will the federal government be able to continue non-Coronavirus grantmaking at prior levels going forward? Will the new Administration be able to bring down existing debt and rebalance grant allocations to non-Coronavirus programs? I suspect this will be a multi-year project.
For nonprofits, I would again suggest setting your sites on private sector fundraising, and multiple approaches to it like major gift research and writing, online giving campaigns including special giving days, crowdfunding for substantial needs, online auctions and online events, and for-profit business services like consulting, if your nonprofit has an expertise it can provide to others (to businesses or to other nonprofit organizations). Just remember, “selling” goods and services must be accounted for separately for IRS purposes.
My annual predictions have focused on the ever-increasing adoption of cryptocurrencies and Blockchain. And I was was one of the only nonprofit fundraising executives to do so! I suggest you refer to my Articles and Resources page for more information. There I recently shared an article by Liam Frost for Decrypt, “Bitcoin Now Has a Greater Market Cap Than Mastercard” (November 20, 2020).
The Giving Block notes that there are 101,000,000 cryptocurrency users which is more than Venmo or Cash App, and $300 million dollars are donated in cryptocurrencies like Bitcoin each year. Cryptocurrencies are tax efficient, and well known services like PayPal and the Cash app are accepting them. Cryptocurrencies are, “quickly becoming the preferred way for millennials and Gen-Zs to invest.” The Giving Block is a service designed specifically to facilitate nonprofit donations of cryptocurrencies, and the website contains helpful information you may wish to review.
My annual predictions normally discuss traditional major gift fundraising vs. crowdfunding for substantial projects. Traditional major gift fundraising continues to evolve, and seasoned fundraising professionals today blend the best of the old with the new. Online communications play a growing and vital role, especially as COVID-19 restrictions on in-person gatherings remain in place. My prediction would only be enhanced by saying meeting with donors in person will continue to be curtailed, with or without COVID-19. This and my discussions about professional advisors that follow also suggest you should polish your online presence on all the platforms on which you communicate. Secure the highest level GuideStar seal for transparency possible.
This year has shown us there are more nonprofit needs than can be funded. Competition is often fierce. Emergencies like COVID-19 mean some philanthropic donations have been diverted from traditional causes like the arts. Many philanthropists have risen to the challenge in 2020 by giving more than they would during a normal year, and digging into their investments to do so. But at some point, there will be a limit to charitable giving, per se.
This might be the time to investigate the concept of charity lotteries, as operated so well and professionally in Europe. You might enjoy reading one of my earliest articles, “Charity Lotteries: A European Success Story.” We need more innovative thinking in terms of philanthropy, and this is a viable option the United States should consider. In fact, I have shared my article with the National Governor’s Association.
It is also true the nonprofit sector should consider organizational mergers to reduce duplication of services and to enhance efficiency. Fewer new nonprofits should be launched unless a genuine need and funding sources have been identified. Establishing a reserve or, “rainy day” fund is always a smart move. Training existing employees to use new technologies, and hiring tech savvy employees adept at communicating online also make sense. Today, there are many options for training, and you might consult NTEN: Nonprofit Technology Network and TechSoup. Take a look at my Professional Development Resources for more information along these lines, both short and long-term educational options.
The trend of donors using “donor advised funds” and engaging professional advisors in their charitable giving shows no sign of slowing down. Read my article, “Building Relationships With Professional Advisors” for more in-depth discussion. Going forward, the nonprofit sector continues to need professional educational guidance in this regard.
Another year has passed, and a new year lies ahead! If you have questions, use my blog’s secure contact form to reach me. Here’s wishing you and your nonprofit a safe and enjoyable holiday, and tremendous success next year.
Carolyn M. Appleton
December 6, 2020
“Prediction is not just one of the things your brain does. It is the primary function of the neo-cortex, and the foundation of intelligence.”Jeff Hawkins, American inventor (b. 1957)
Photographs used to illustrate this article are courtesy of Adobe Spark.