The broader nonprofit sector has largely recovered from the lows of the COVID-19 pandemic, according to a new survey. That’s created opportunities for growth, though many leaders are still concerned about political and economic headwinds.

Nonprofit Standards: A Benchmarking Survey, published last month by the accounting firm BDO, found multiple areas of optimism: 52 percent of nonprofit leaders said their revenue increased during their last fiscal year, and 82 percent said the culture of their workplace is “strong” or “very strong.” Bolstered by those trends, more than half (52 percent) said they planned to increase investments in new programs and nearly three-quarters (73 percent) said they plan to “meaningfully expand or shift the scope of their mission.”

According to the report, investments that nonprofits have made in areas like digital transformation have largely paid off, and the firm recommends that organizations should consider next steps. “Nonprofits are now at a point where they can reflect and consider a pivot,” the report said. “What is working well that they can continue doing? What do they need to change?”

Only 25 percent of respondents say they will spend more on advocacy, a steep drop.

Still, the report surfaced areas of concern. Fifty-nine percent of nonprofit leaders said they expect revenue to increase in the coming year, a 10-point drop from the 2023 survey. Nonprofits are stockpiling more reserves, and say they are planning to spend less on advocacy in the coming year—only 25 percent of respondents say they will spend more, a steep drop from 52 percent who said they would in 2023.

Such shifts, according to the report, reflect anxiety around the 2024 elections and persistent worries around a recession. But as the report’s notes on technology investment—especially around AI—suggest, organizations are trying to look forward. “Nonprofits are experiencing a foundational shift,” said Andrea Espinola Wilson, managing principal and co-leader of BDO’s Nonprofit & Education practice, in a release regarding the report. “They’ve overcome the challenges that defined recent years and are now looking to proactively plan the futures of their organizations.”

A look at areas where nonprofits plan to spend more than they did last year offers a window into their priorities. Forty percent of leaders say they intend to hire more talent, up two points from 2023; and 52 percent say they plan to invest in new programs, also up two points from last year. A majority of leaders say they’re planning changes due to pressure from board members, but they’re also responding to the needs of current constituents and an urge to expand into new areas.

“Nonprofits are reevaluating their missions and engaging in strategic planning in response to pressure from stakeholders, as well as evolving geopolitical, environmental, and social factors,” the report said. “The strong internal structures nonprofits have put in place over the last year are allowing them to shift their focus outward on areas like mission and programming while building on what is already working well internally.”

The report is based on the responses of 250 nonprofit leaders surveyed in May and June 2024. Participants represented “higher education, grantmakers and foundations, health and human services organizations, international non-governmental organizations, and public charities,” according to the report.

[istock/Eoneren]