Study: Nonprofits Must Embrace Radical Transformation to Overcome 2025 Challenges
Unit4, a provider of enterprise cloud applications for people-centric organizations, has unveiled global research by Pierre Audoin Consulting (PAC) on the nonprofit sector. Insights from over 200 senior strategy leaders across North America and Europe reveal cautious optimism - but also a pressing need for radical digital transformation to secure long-term survival and build sustainable financial and operational models.
After two tough years, nonprofits show cautious optimism for fundraising growth in 2025. However, 79% expect rising service demand alongside increased costs. To adapt, 22% are running fewer fundraisers, while 32% are scaling back services. The research highlights digital transformation as key to overcoming these challenges by improving cost efficiencies and driving competitiveness and differentiation.
“Nonprofit leaders recognize that small, incremental changes are not enough to enhance their financial position and growth prospects at a time of increased volatility,” said Nick Mayes, Principal Analyst, Pierre Audoin Consulting. “Success hinges on smart data use, whether it is shaping programs to support new areas of demand, pinpointing the areas where the biggest efficiency gains can be achieved or mitigating compliance risk.”
Key priorities highlighted in the findings:
- Faster decision making: 72% admit it takes between two and seven days to pull together operational or financial data with only 7% saying they access such data in real-time
- Better forward planning: 40% have only a partial or limited view of data at best for forward-looking decisions, while a similar percentage says it takes one to two weeks to integrate external data which humanitarian organizations are highly dependent on to understand changing health, geopolitical and environmental situations
- Removing legacy applications: nearly half (45%) say the top barrier to innovation and transformation is an ongoing dependence on legacy applications, which also contributes to other obstacles including limited insight into critical performance data and a lack of integration between key applications
Today, 85% of respondents say it takes one-to-two weeks to launch new fundraising initiatives and more than a third (37%) admit it takes a similar timeframe to activate programs in the field. This process could be sped up by breaking down silos to build a more holistic view of an organization’s financial and operational data and marrying it with external data sources to enable more real-time insights. Shared services are being utilized by nonprofits as a way to break down silos with 40% already centralizing HR and IT functions, with 50% looking to centralize finance and accounting in the next three years, while 45% are planning to move governance and compliance functions. The top priority for increased spending is project management systems, while 33% say harnessing AI’s potential is a primary driver for overall digital strategy.
“The nonprofit sector thrives on innovation, driven by the need to prove the impact of every spend. But in 2025, that challenge will be greater than ever,” said Chris Brewer, Global Director Nonprofit, Unit4. “Digital transformation is already benefiting nonprofits, but a water-tight business case is crucial to win stakeholder support. PAC’s research reveals where to invest to tackle legacy tech debt and drive more agile, real-time decision making.”
The preceding press release was provided by a company unaffiliated with NonProfit PRO. The views expressed within do not directly reflect the thoughts or opinions of the staff of NonProfit PRO.
