New survey finds nonprofits are building frameworks for future success

• A majority of nonprofits (52%) report an increase in revenue during their most recent fiscal year
• From this strong position, they are thinking deeply about what is next for their organizations: 73% of nonprofit leaders say they plan to meaningfully expand or shift the scopes of their missions
• As they embrace this period of transformation in their organizations and the funder landscape, 52% are planning to increase their investments in programs. This was tied with 52% that plan to increase spending in technology.

Following a few years of investment in their technology, infrastructure and internal resources, many nonprofits now have the revenue, organizational culture, and donor networks to execute plans to deepen, and perhaps transform, long-term impacts on the communities they serve. This is according to BDO’s 2024 Nonprofit Standards, a Benchmarking Survey, released today. The survey, now in its eighth edition, asks critical questions of 250 nonprofit leaders, including financial health and performance, spending priorities, future outlooks, and the factors driving them to reevaluate their missions.

“Nonprofits are experiencing a foundational shift. They’ve overcome the challenges that defined recent years and are now looking to proactively plan the futures of their organizations,” said Andrea Espinola Wilson, managing principal and co-leader of BDO’s Nonprofit & Education practice. “This time of proactive strategy development comes when many funders are changing their priorities, and nonprofits must adapt by reevaluating their missions, strategies, and programmatic work. With the right vision, leadership, and team, nonprofits will be able to have a transformative impact on their communities.”

Key findings from this year’s survey include:

• Nonprofits experience growth: 52% of nonprofit leaders report an increase in revenue during their most recent fiscal year. 59% anticipate their revenue will increase further in the next 12 months. Additionally, 62% of nonprofits have more than 7 months of operating reserves on hand. Nonprofits may be using this time to save cash in order to effectively deploy dollars once their transformation plans are fully formed.
• Evolution ahead: 73% of nonprofits say they plan to meaningfully expand or shift the scopes of their missions in the next 12 months. This reevaluation of scope is in response to board member pressure, evolving geopolitical, environmental, and social factors, and pressure from funders.
• Spending plans reveal organizational priorities: As they consider what comes next, 52% of nonprofits say they are increasing investments in new programs. Other areas where nonprofits are increasing spending include technology (52%) and risk management and compliance (45%).
• Artificial intelligence takes hold: 82% of nonprofits report using artificial intelligence (AI) in some capacity, including for financial tasks (53%), program optimization and/or impact assessment (43%) and organizational strategy (40%).
• Nonprofits stand apart from election results: Notably, nonprofits do not feel that the outcome of the 2024 U.S. presidential election will radically impact their operations and fundraising: 51% anticipate a Democratic presidential victory will have a neutral impact on donations, and 64% anticipate a Republican presidential victory would have a neutral impact on donations.
• Press pause on advocacy: And yet, the unknown outcome of the 2024 presidential election may be causing nonprofits to put advocacy plans on hold, with just 25% of nonprofits planning to increase their spending on advocacy in 2024.

“Coming out of the pandemic, we saw nonprofits make investments in their technology and infrastructure. Now it is time to use that capacity to tackle the larger challenges, such as planning the evolution of their programs,” said Adam Cole, principal and co-leader of BDO’s Nonprofit and Education practice. “At the same time, they should deploy new technology, such as AI, with an eye toward security and clear objectives on how AI will improve program or administrative work.”

Higher education snapshot report reveals the priorities of university leaders

Also released today is the snapshot report of 50 higher education leaders. This report revealed that higher education institutions have seen revenue growth and are actively developing strategies to support their long-term financial and operational health, which includes improving financial systems, developing new programs, investing in technology, and mitigating risk.

Key findings from the higher education snapshot include:

• Financial challenges remain: Higher education leaders say their top three challenges are economic uncertainty (40%), budget constraints (38%), and increased competition for funding (38%).
• Cost reduction is a priority: Higher education leaders are pursuing strategies to reign in higher costs, including investing in technology to streamline operations (48%), reducing their real estate footprint (38%), and eliminating some degree programs (36%).
• AI sees wide adoption, but not without obstacles: 82% of higher education leaders say they are using artificial intelligence at their institutions. The chief uses are financial tasks (40%), administrative tasks (38%), and program optimization and assessing impact (38%). Yet obstacles to further expansion remain, namely cost (58%) and a lack of data infrastructure (52%).

BDO will release several additional snapshot reports, featuring specific subsector data, in November. Snapshot reports include health and human services organizations, INGOs, grantmakers, and public charities. Sign up here to be among the first to be notified when these reports are released.

ABOUT THE SURVEY

This year’s Nonprofit Standards Benchmarking Survey was fielded in May 2024 by Rabin Roberts Research company. It surveyed 250 nonprofit leaders of health and human services organizations, public charities, colleges and universities, grantmakers, and international nongovernmental organizations.

ABOUT BDO USA

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