Here are some of my predictions for 2009:
- Many nonprofits will disappear. Paul C. Light, Paulette Goddard Professor of Public Service, New York University, predicted that more than 100,000 nonprofit groups nationwide (10%) will fail within the next two years, including a few "big brand-name nonprofits." Professor Light made his prediction at a forum - The Economic Storm: Challenges and Opportunities — Changing the Paradigm to Meet Community Needsheld – convened on November 19, 2008 by the Foundation Center, New York Regional Association of Grantmakers, and the United Way of New York City, Click here for video clips of the forum. At the same time, we'll continue to see many new nonprofits being formed – a majority of these will be formed by well-intentioned individuals without a strong case for forming a new organization or a plan for viability.
- Increased scrutiny on governance practices and programmatic results. This is a no-brainer. The revised Form 990 is just the start. Add to that donor disillusionment after a number of scandals involving or affecting nonprofits; messages from the media to vet charities (see After Madoff, Donors Grow Wary of Giving, The Wall Street Journal(12/23/08)); the increasing prevalence of charity ratings organizations; and general consensus of a prolonged, severe recession. Foundations, corporations, and individual donors will be making more careful decisions with all the information easily available to them – another reason for making sure Form 990s are completed as a communications as well as a reporting item.
- Social media will play a greater role in volunteerism and fundraising. Nonprofits will seek to replicate the successes of the Obama campaign on local levels by activating volunteers and raising funds for specific social change campaigns and programs. Online "asks" are easy, and online communities are increasingly real communities that can come together. However, there will be many more failures than successes in attempts to effectively and efficiently use social media for these purposes. Campaigns, particularly major ones, must be planned and implemented strategically. The social media subsector may also face contraction and convergence as investors look for results. Of course, millenials will be very involved in all of this. See Beth's Blog: How Nonprofits Can Use Social Media.
- More social enterprises and greater emphasis on corporate social responsibility. More socially conscious persons with wealth will seek to control the moneys they allocate to investments in public good by utilizing hybrid-type organizations (e.g., L3Cs) and corporations with a priority on CSR and social investments. More nonprofits will use for-profit vehicles to raise or replace lost revenues, but many of these will be drains on resources; only a few will be great successes (note, however, that this is not to say that social enterprises that generate losses are failures). See Social Enterprise Alliance's webpage: Social Enterprise: Hype or Reality. More entrepreneurs will seek to form nonprofits related to their businesses but will run afoul of prohibitions against private inurement and private benefit.
See Lucy Bernholz's (Philanthropy 2173) predictions here.
See my predictions for 2008 at the Asian American Giving website here.