The nonprofit sector continues to grow, despite the economic downturn and sluggish recovery.  The Urban Institute’s The Nonprofit Almanac 2012 by Katie L. Roeger, Amy S. Blackwood, and Sarah L. Pettijohn indicates that the number of nonprofits grew by 24% from 2000 to 2010, and their growth in revenue was even more striking at 41%.  Nonprofits contributed $804.8B to the U.S. economy in 2010, representing 5.5% of GDP.  Perhaps more important, nonprofits now employ 10% of the U.S. workforce, meaning one in every 10 working adults now finds meaningful employment at nonprofit organizations.  This growth in nonprofit influence is fueled in part by a rising demand for services as the recession fueled drop in wages and employment for Middle America feeds the ever-growing income disparity gap between the rich and the rest.

Fiscal woes are also plaguing governments, at the local, state and federal levels.  For nonprofits, government austerity means funding cuts for many, and with the current political gridlock and partisanship, nonprofits are not likely to see an easing of funding or legislation in the coming year.

On the other hand, corporations have begun to see a turnaround, and in fact, have seen profits rise dramatically over the past decade, outstripping growth in GDP and certainly adding fuel to the widening income disparity.  Unfortunately, corporate giving represents just 6% of all charitable giving in the U.S. according to Giving USA 2013/Giving USA Foundation. 

What does this mean for nonprofits?  Giving from individuals represents 86% of all giving according to Giving USA 2013.  This is comprised of giving by individuals (72%), giving by bequests (7%), and giving from family foundations (7%).  Nonprofits wishing to survive and thrive in this uncertain and unsustainable economic climate will have to rely heavily on individual donors.  Identifying, involving and integrating these individuals into partnerships to help solve our most pressing problems will be the challenge of 2014. 

Now more than ever, those with money to give want to be involved in meaningful ways and integrated into the life of the nonprofit.  They are not looking to throw money at the problems; todays donors know that there are no quick fixes to the most pressing societal problems, and they desire -- no demand --  a stake in the solution.

Nonprofits will need to understand their donors and supporters on a different level – go beyond wealth and beyond demographics – to dig deep into the psyche and motivations of their constituents.  Nonprofits who understand the lifestyles and interests of their constituents, their giving behaviors and political leanings, their family heritage and living arrangements, their career achievements and  business successes, will be best prepared to build meaningful relationships that further both the mission of the nonprofit and the vision of the donor.

Of course knowledge is nothing without action: The added insight this intelligence will bring will help nonprofits target the right constituents, inform all of their communications, gain buy-in and volunteer skills, and ultimately secure the right to ask for a sacrificial financial investment. For too long nonprofits have apologized for asking – let 2014 be the year we occupy our rightful place at the table, recognize our unique position in the economy as well as in society, and go after the investments we need to make the difference we envision.

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