Golden Years for Nonprofits End With the Decade

It's difficult to believe that in 2002, Blue Sky Collaborative's (www.blueskycollaborative.com) first nonprofit clients did not even have their own websites. 

But here we sit in 2009 and seemingly every org has a Facebook Page or is experimenting with Twitter.

The years from 2000 to 2009 will be remembered by many as the greatest years of the nonprofit sector.  I'm not so sure that this is great news.  Regardless, here's a recap of what we saw.

1.  Explosive growth.  Earlier in the decade the number of orgs was ballooning and the sectors' revenues were growing at 62%

2.  Fragmentation.  A side effect of the growth was the increasingly large number of orgs tackling the same problem.

3.  Donor Management Systems.  Seemingly all large nonprofit orgs implemented gargantuan CRM systems.  These systems were bulky and expensive.  The ROI of these systems is unclear but most systems are ingrained within the organizations operations so they are here to stay. 

4.  We went online.  To be sure, orgs are still trying to figure out how to use the web but most orgs have a website and some way to donate or transact online.  Online donations are continuing to grow and in 2009 so expect more growth in this area.

5.  CSR went away for a while.  The first iteration of Corporate Social Responsiblity proved to be too expensive to justify to shareholders.  Companies like Timberland and Ben and Jerry's were pioneers in CSR but their programs proved to be not sustainable.  No need to fret, however.  New movements and investment activity point to a CSR Version 2.0 that integrates marketing data, mobile applications, and causes to create a CSR that is profitable to nonprofits AND companies.  Stay tuned on this one.

6.  The sector became younger.   The internet and social media are democratizing philanthropy.  Small groups of young, connected donors are starting to have the impact of the wealthy old benefactor.  The leadership in the sector also seems to be refreshed.  Orgs also experimented with social media to attract and keep these young donors.

Taken together, it wa a revolutionary decade for the nonprofit sector.  The economic downturn at the end of the decade will probably cause some contraction and that's just part of the natural cycle.  But not all orgs are suffering.  The organizations utilizing technology to cut costs, create efficiencies, and generate revenue are still thriving.  The rest better get on board soon.  But it might be too late for them already.

Still, there's a lot to look forward to and much innovative activity happening within the sector and its vendors. 

Comments

[vacations]

All of this has undermined public confidence in the sector and prompted questions about the basic legitimacy of the special tax and legal benefits it enjoys. To cope with these challenges, American nonprofits could usefully undergo a process of renewal that revives the sector's basic values, reconnects it to its citizen base, and creates a better public understanding of its functions and role.

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To cope with these challenges, American nonprofits could usefully undergo a process of renewal that revives the sector's basic values, reconnects it to its citizen base,