Nonprofit leaders, the wave of innovation is here — and these 5 trends are driving it
“In the next three years, the nonprofit sector will see a wave of innovative, digitally savvy organizations capable of scaling impact across various missions and causes.”
That’s something I have deeply believed and audaciously claimed since I first got involved in the nonprofit sector in 2009.
For a long time, that wave of innovation felt like it was coming just over the horizon.
And so it’s been incredibly exciting to see the wave of innovation finally building across the sector in the last few years, with more and more leaders and organizations adopting innovative, scalable approaches to making an impact.
Today, I think there are 5 key trends driving that wave of innovation, that every nonprofit leader should keep an eye on….
Trend #1: Growing recognition that change is needed
It feels like at every nonprofit conference or happy hour lately, there is a growing consensus that our sector needs to evolve.
It’s something we’ve been hearing from nonprofit leaders for years now, such as:
Dan Pallotta's influential TED Talk "The Way We Think About Charity is Dead Wrong"
Scott Harrison from charity:water’s critiques of traditional nonprofit models, like his podcast appearance on We Are For Good
Nathan Chappell's book of insights on the "generosity crisis"
They’ve all been raising caution flags about a similar concern: outdated mindsets around scarcity, overhead, and the value of innovation, which have limited our sector's ability to scale impact. But there's hope on the horizon.
Trend #2: The surge of nonprofit-specific tools
If you’ve been in the sector long enough, you may recall when the choices for a 'nonprofit CRM' or a fundraising platform were quite limited.
But the nonprofit software market has been surging the last few years, and is expected to grow from $4.59 billion in 2025 to $6.74 billion by 2030, bringing us:
Better CRM systems built for nonprofit needs
Specialized fundraising platforms
Marketing tools designed for impact organizations
Rich educational content and resources from these providers
Trend #3: The next generation's approach to impact
A massive transfer of wealth is coming: $72 trillion will move to younger generations in the next 20 years, with an estimated $11.9 trillion directed to charities.
In January, the Lilly Family School of Philanthropy put out an incredibly insightful report called The Next Generation of Philanthropy that was packed with insights to know, including:
They’re focused on long-term impact
Often volunteer before donating to assess an organization’s effectiveness
Expect clear, measurable outcomes
Want detailed financial transparency
They're hands-on philanthropists
View themselves as change agents, not just donors
Often support organizations on social media in addition to giving
Actively advocate and mobilize their networks
They value digital-savvy leadership
Push for technology adoption
Want efficient, scalable solutions
Are more likely to adopt digital tools when leading organizations
Trend #4: The evolution of giving
I’d argue that a lot of those shifts correlate to donation trends we’re seeing as well, including:
Recurring giving
Increased 6% year over year, compared to a 5% decrease in traditional donations according to the 2024 M+R benchmark report
Peer to peer fundraising
A “request from a family member or friend” was recently cited as the #1 motivation for giving according to YouGov’s “What Motivates Americans to donate to charity.”
Unrestricted giving
Rose across all gifts increased from 46% to 60% from 2019-2022 in the United Kingdom according to the Third Sector Trends 2023 report.
We should also be aware, though, that if donors lose confidence in nonprofits as a vehicle for making an impact, they increasingly feel like they have other options, including:
Conscious consumerism has surged with a 21% increase in the 3-year average of customers who made the decision to buy from socially conscious brands.
Impact investing has seen a 93% increase over the last 5 years.
Direct contributions that are not tax-deductible are impossible to quantify overall but examples like the more than $30 billion given through GoFundMe since 2010 certainly suggest they are rising.
Trend #5: The AI Revolution
While some nonprofits remain hesitant about AI, as one sector leader noted, "The benefits of these new AI technologies cannot remain accessible only to a few."
A series titled Introducing AI-Powered Nonprofits created in collaboration between FastForward and the Stanford Social Innovation Review pointed out four key ways nonprofits are leveraging AI:
Getting strategic advice
Structuring complex data
Translation and decoding
Creating innovative service delivery platforms
One example I got to check out of an AI powered nonprofit came from one of the first Executive Directors to provide feedback on the pilot of the Proimpact Leaders Community.
Eric Shepherd is the Executive Director of the Talent Transformation Foundation, which has trained a chatbot named Erica to answer users questions about fulfilling careers, self-awareness, and healthy relationships.
This scalable model enabled the organization to reach 98,000+ engaged members, with 430,000+ quizzes taken and 400+ active coaches.
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