The BDO 2023 Nonprofit Standards Benchmarking Survey of more than 250 nonprofits highlights a crucial shift in the nonprofit sector towards strategic resilience, marking a departure from the reliance on recent federal funding. Data from our annual survey reveals that in response to economic uncertainties, nonprofits are prioritizing digital transformation (42%), cost reduction (38%), and seeking new funding sources (36%) as their top concerns for the next 12 months. Despite a decrease in revenue for 44% of surveyed nonprofits in the latest fiscal year, 69% anticipate an increase in the coming year.
The nonprofit industry has continually turned crisis into opportunity, and this year is no different. While less than half (44%) of surveyed nonprofits saw increased revenue in their most recent fiscal year, 69% anticipate revenue will increase in the next fiscal year. Nearly all (99%) surveyed organizations say they have expanded or shifted their mission scope in the past 12 months, with more than half doing so to address emerging needs among the populations they serve. Organizations are also focused on efficiency and strengthening bottom lines, identifying digital transformation, cost reduction and finding new revenue and funding sources as their highest priorities over the next 12 months.
Even in the face of economic uncertainty, nonprofits are showcasing their determination amid a decline in giving and higher costs. Investment in technology is a priority in the coming year. More than half (59%) of nonprofits plan to increase their technology spending in the next 12 months, and 57% plan to select and/or implement a new enterprise resource planning (ERP) system within the same time frame.
The report also delves into increased donor scrutiny surrounding ESG topics. Just over half (51%) of nonprofits say funders and donors have asked for more information on ESG strategy in the past 12 months, while 42% said they are seeing an increase in requests for information on environmental impact and reduction strategies.
Now in its seventh year, Nonprofit Standards examines emerging challenges and opportunities facing nonprofit leaders, offering data-backed insights they can use to further their missions and sustain their organizations into the future. The survey includes an overview of the nonprofit sector as well as breakout reports for health and human services organizations, higher education institutions, grantmakers and their recipients, public charities, international nongovernmental organizations (INGOs) and organizations with more than $75 million in revenue.
Written by Andrea Espinola Wilson and Adam Cole. Copyright © 2023 BDO USA, P.C. All rights reserved. www.bdo.com