There is a glaring lack of diversity within the nonprofit sector and philanthropic community that harms not only minority communities but nonprofit institutions themselves. Research shows people from diverse groups create novel solutions, introduce different thinking patterns and increase performance, creativity and innovation within an organization (Chandler, 2016).  

Defining how an organization thinks about diversity is a critical starting point because it can be used to describe differences of race, ethnicity, gender, sexual orientation, economic standing, and physical or developmental disability within a group of people. Racial diversity within the nonprofit sector is becoming increasingly important as evidenced by the prediction that by the year 2042, minorities will overtake the majority population in the United States (D5, 2015). This reality is contrasted against the statistics of the philanthropic community and the nonprofit sector in general which remains mostly white: as 79 percent of the foundation workforce and 91percent of the CEOs and Presidents identify as white (see figure below) (D5, 2015). The traditional power dynamics created between philanthropy, nonprofit organizations and the community beneficiaries of the nonprofit work is imbalanced. Such that, philanthropy holds the greatest reward power and nonprofits assert more control over the communities they serve (Spilka, Figueredo & Kioukis, 2014). The question  then…

In order to have long term fiscal sustainability, nonprofits must be considering future generations as potential donors and supporters.  Baby Boomers and Generation X have fiscally supported nonprofits for decades, now Millennials are the next generation that must be courted.  They have a different approach and outlook on life than previous generations, as such traditional marketing and fundraising techniques will be less effective.  It is crucial for nonprofit organizations to understand what motivates this generation and to add millennial strategy to their marketing plans.  Nonprofits must stay on top of social media trends and create engaging experiences for millennials in order to capture their loyalty.  According to a PEW Research Poll, millennials now make up the majority of the US labor force.  (PEW, 2015) As time goes on, this generation will accumulate more wealth and become increasingly more critical for nonprofits to pursue as a revenue source.  In a 2012 report, the National Chamber Foundation cited that Millennials have approximately “$200 billion of direct purchasing power and $500 billion of indirect spending.”  The study then goes on to claim that “With Millennials’ peak buying power still decades away, marketers would do well to establish relationships with this consumer force.” (National Chamber Foundation, 2012)

As with all previous generations, Millennials have characteristics that…

Many nonprofit organizations rely on individual giving as a primary source of income to carry out their missions. People have been giving to charity through time, money, or in kind gifts for centuries and beyond. The act of charitable giving is here to stay, but the nature of giving is constantly evolving with generations. 

Although every donor is different, research has been conducted to determine commonalities among generational giving. Younger generations typically respond best to text messages, email and social media while older generations respond best to voice calls and direct mail (Lai, 2015). In addition, “60% of Millennials and 50% of Gen Xers want to see directly the impact of their donations, while just 37 percent of Baby Boomers say seeing a direct impact matters to them” (Hartnett & Matan, 2014). Sustainable growth in the nonprofit sector relies on effective donor engagement, stewardship and retention. And yet, alarmingly, only 34 percent of nonprofit organizations say they tailor solicitations and communications with donors to their age (Hall, 2015). Nonprofit leaders must understand donor motivations to effectively target and retain donors before it is too late.

Currently, Baby Boomers (born 1946-1964) and Matures (born 1945 or earlier) represent the majority of giving in the United States. These generations also average larger annual gifts than the younger generations; Generation X (born 1964-1980) and…

In the 2015 Nonprofit Finance Fund Report, 23 percent of nonprofits reported operating in deficit and 29 percent reported break-even finances (Nonprofit Finance Fund, 2015). These reports expose a need for short and long-term strategic planning in order to establish financial security (Leroux, 2005). To avoid operating in deficit, the gold standard, historically, has been to use “revenue diversification”. However, effectively diversifying revenue is more effective than playing a “numbers game”. Nonprofits can no longer use revenue diversification as fail-proof-safety; the more sources of revenue an organization maintains does not imply greater stability. 

The only solution to an uncertain funding environment is to “get ahead” of the seemingly stagnate competition curve by creating an uncontested market (Harrison & Thornton, 2014). From this, the writer predicts the growth of entrepreneurship and philanthropy in the future of nonprofits. 

The American spirit has long been rooted in entrepreneurial success (Acs et al, 2008). When one strategy, method, or product starts to plateau, there is room for a new strategy, method, or product, as a means of increasing revenue. Allowing opportunities to be optimized is an entrepreneurial act. The implementation of entrepreneurship has shown to be successful in terms of revenue and enhancing an organization’s mission. 

Philanthropy is the term given to the…

“Capacity building is whatever is needed to bring a nonprofit to the next level of operational, programmatic, financial, or organizational maturity, so it may more effectively and efficiently advance its mission into the future. Capacity building is not a one-time effort to improve short-term effectiveness, but a continuous improvement strategy toward the creation of a sustainable and effective organization” (National Council of Nonprofits, 2017). For many organizations, capacity building would fall into the “overhead” category. Unfortunately for the nonprofit sector, higher overhead costs are correlated to an organization being irresponsible with its finances, ineffective, unable to carry out its mission, and even unethical. 

Overhead is defined as a “percentage of a charity’s expenses that goes to administrative and fundraising costs” (Guidestar, 2014). The Overhead Myth is created when donors believe that nonprofits should keep these overhead expenses below a certain percentage of the nonprofit’s total expenditures – usually no more than 15 to 20 percent. In Dan Pallotta’s TED Talk, he discusses the Overhead Myth and how it can negatively affect nonprofits by hindering their ability to create long-term sustainable growth. Both internal and external stakeholders need to be better informed about why it is okay for overhead costs to be higher when the organization is trying to grow, become sustainable, and ultimately achieve its mission more…