5 Nonprofit Trends to Watch in 2012

It’s been a very challenging few years for the nonprofit sector. But I am ever an optimist and continue to think that the nonprofit sector is getting smarter, more effective and better able to create real, lasting change in our communities.

I truly believe that our challenging economy offers nonprofits a real opportunity to reinvent themselves.

So here are my predictions (hopes) for what the nonprofit sector will move toward in 2012:

1. More open, engaging organizations
Smart nonprofits are getting better at engaging armies of supporters. In order to do that, they have to cede some control. Nonprofits that allow volunteers, donors and advocates to engage their friends in their own ways will unleash a growing army of support for their organizations. Those nonprofits that continue to control the message and the method, that only engage their donors when they need money, and ignore the increasingly networked world will wither on the vine.

2. Smarter boards
I am an endless optimist when it comes to nonprofit boards of directors. Boards are, for the most part, dysfunctional, but I believe that they are getting smarter and more effective. I think boards will start asking more and better questions, increasingly put themselves to their highest and best use, focus more on strategic issues as opposed to day-to-day tasks, empower their staff leadership to take the organization in more innovative directions, and start putting their money (and their networks) where their mouth is — because this new, harsher environment absolutely necessitates a smart, strategic, innovative board.

3. More honest communication between nonprofits and their donors
The nonprofit sector’s proclivity to endlessly beat around the bush, tell donors what they want to hear and sugarcoat the truth will start to wane in the new year. The reality is that a severely under-resourced nonprofit sector is the new normal. That truth is harder and harder to hide. Nonprofits need more money for infrastructure, as well more and better staff and technology. And they need their donors to step up to the plate and fund it. Nonprofits that continue to fear their donors will continue to struggle. Those that take the leap and tell donors how it is, how it REALLY is, will propel themselves out of the starvation cycle.

4. More strategic approaches to solving social problems
It’s increasingly meaningless for nonprofits to talk about the “good work” they do. In order to attract donors, nonprofits must be able to articulate what they do and how it results in change. This necessitates an overall strategic approach to their work. From creating a theory of change, to developing on a comprehensive strategy, to raising the money required to execute on that strategy, to aligning money and mission, to evaluating their efforts, to translating their evaluation into a compelling story, nonprofits have to get more strategic. Organizations that take a step back and create and fully integrate their organizations into long-term plans will be much more successful and sustainable.

5. More financed nonprofits
As part of this more strategic approach, nonprofits will (must) move toward a broader, more strategic approach to funding their work. They will realize that the hamster wheel of chasing receding dollars in a scattered approach just isn’t going to cut it anymore. As the fundamental economic restructuring that we are currently experiencing continues, nonprofits must create a financial model for their work. The financial status quo just will no longer work in the nonprofit sector.

I’m not a fortune-teller, but I am an optimist. I have tremendous hope for our great nonprofit sector. We may be in the depths of an ongoing, structurally transformative recession, but it in no way is the death knell for the nonprofit sector. It is simply an opportunity for nonprofits to get smarter, more honest, more open, more strategic and more sustainable. And that’s exciting.

Nell Edgington is president of Social Velocity.