Hot topics in 2017 to help you plan for what’s ahead in 2018

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Impossible to see, the future is.” — Yoda

While it may be impossible to anticipate fully what 2018 has in store for charitable nonprofits, we think there are important takeaways from some of the hottest topics that surfaced in 2017. We’re sharing our “Hot Topics” list with you to help you spot trends that may impact your nonprofit’s operations or influence those it serves. We hope that by reflecting on these trends, nonprofit leaders can have well-informed discussions with board and staff members, colleagues, professional advisors, donors and funders, about what may be coming your way in 2018. What’s on your list? Here’s what’s on ours.

2017 Hot Topics

1. Sexual Harassment 6. Diversity, Inclusion, and Equity
2. Natural Disasters, Gun Violence, Other Crises 7. Increased Political Divide
3. Cybersecurity 8. Budget Cuts
4. Changes in Charitable Giving 9. Talent Development
5. Donor Advised Funds 10. Relationship between Grantmakers and Nonprofits

Sexual Harassment

Sexual harassment training has been an obligatory part of the culture of most workplaces for at least 30 years, but in 2017 there’s been  a dramatic shift in how seriously people have been taking this topic. So dramatic, in fact, that Time magazine just named “The Silence Breakers” the Person of the Year. Is your nonprofit prepared to handle allegations of harassment? What would you do, as the chair of the board, if you received an anonymous complaint that the executive director was a sexual predator or simply doesn’t “get it” about unwanted sexual advances? ED’s, what if you received the same phone call about a board member? At a bare minimum, does your nonprofit have a written sexual harassment policy that applies to the board and staff’s conduct, and clearly spells out who employees/volunteers should complain to – other than their supervisor? Under some state and federal laws, employers can be responsible for the conduct of non-employees (e.g., board members, consultants and even vendors) that creates a hostile workplace environment. It may be time to update your nonprofit’s policy. In many states, the protected characteristics for harassment and retaliation include not only gender, but also sexual preference and/or gender identity.

Resources to Combat Sexual Harassment (curated by Maine Association of Nonprofits)

Natural Disasters, Gun Violence and Other Crises

As wildfires rage near Los Angeles, and smoke is still wafting over sections of the northwest from fires earlier in the year, the Washington Post published a story that assures even more violent weather-related calamities are in our future.  In 2017, it seemed that no region of the US escaped a collective community crisis, whether from attacks on bystanders with vehicles, shootings, hurricanes, or wildfires. Disasters happen anywhere, anytime. Usually with little warning, so preparedness is the best risk management. The double whammy of disasters is recovery – which can take a long time and cost more than planned. Unfortunately, we are all becoming more familiar with disasters. There is some consolation looking ahead: nonprofits and grantmakers have learned many lessons from past disasters, so now there is excellent guidance, freely available, that we encourage every nonprofit and grantmaker to take advantage of. What will 2018 bring? We don’t know exactly, but we do know that it’s not a matter of “if,” but “when.” Nonprofits can prepare with plans and drills, and to the extent possible, with insurance and financial reserves. You can also help encourage your own teams to take their personal preparedness seriously.

Resources on Disaster Preparedness and Recovery

Cybersecurity

Identity theft reached an all-time high in 2017,  affecting between 16 and 20 percent of Americans. Nonprofits are not immune. In fact, many nonprofits collect so much personal data on the individuals they serve that they are prime targets. Has your nonprofit accessed its cybersecurity risks?  How prepared is it to defend against malware, hackers, or someone demanding ransom in exchange for the return of your nonprofit’s data? And have you considered not only its hardware, software, and cloud storage, but also its policies on what data not to collect, so those maintaining those data do not create unnecessary liability risks? If it’s not yet on your ‘to do’ list, it’s time to add cybersecurity risk management to the list of high priorities for 2018.   

Cybersecurity Resources

Charitable Giving

Online donation, crowdfunding, and social giving are growing fast. In 2017 #GivingTuesday saw a 50 percent increase over last year’s contribution totals. Payment portals such as PayPal and Facebook are doing lots of business (and the fact that Facebook just eliminated its fees for donations shows how important Facebook considers social giving for its future). But the trends are not necessarily rosy for nonprofits. New longitudinal data for charitable giving by individuals underscores what many nonprofits have been feeling: While total giving has continued to increase since the end of the Great Recession, the share of households that give is going DOWN. To that, add the wild card of tax reform. If, as both House and Senate proposals include, the standard deduction is doubled, there is likely to be no tax incentive for 95 percent of the population to make a charitable donation in 2018. Will Americans continue to give at their current (lower than prior years) rate? Or will tax reform result in even more depressed giving rates by individuals, resulting in up to $20 billion in lost charitable giving annually, as estimated by the Tax Policy Center? And what will the effect be over time of essentially removing this century-old policy that has encouraged giving? While we won’t know for a while, what we can be sure of for 2018 is that this Congress is not supportive of charitable giving, and a policy environment that does not support and promote charitable giving is not the type of policy environment that helps nonprofits – or the communities they serve – survive, let alone thrive. Is your nonprofit ready to advocate for policies that will help it, not hurt it – and help your community as well?

Influences on Charitable Giving

Donor Advised Funds

In 2017, Fidelity Charitable Gift Fund became the second largest philanthropic force, second only to the Bill and Melinda Gates Foundation. Because donor advised funds (DAFs) are actually public charities (not private foundations), Fidelity Charitable now is also the nation’s largest charitable nonprofit. (Many people don’t realize that community foundations also offer donor advised funds, so not all DAFs are connected with huge financial institutions such as Fidelity.) Whether you love them or dislike them, DAFs are here to stay – and increasingly will be an influence on contributions to nonprofits. Just as your nonprofit will fall behind it if it doesn’t accept online donations, or can’t accept gifts from a mobile device, your nonprofit will fall behind if it doesn’t have a comfort level with donors who give through donor advised funds. There are rules nonprofits need to understand: DAF donors can’t get any benefit from the contribution, and donors can’t use a DAF to redeem a personal pledge made to the nonprofit. Nonprofits can help their donors steer clear of these no-no’s. The rules can also cause unintended consequences: consider the donor who makes a contribution through a DAF at a certain level that would entitle other donors at the same level to a special ‘thank you’ gift from the nonprofit. (Remember that rule about DAF donors not being able to receive any personal benefits in exchange for a contribution through their DAF?) It can get awkward if the DAF donor expects the special gift. A well-informed development director can manage expectations and avoid disappointing a donor.

With their growing presence, DAFs may become the philanthropic vehicle of choice for more donors. Doing your homework about DAFs, and strengthening your major-donor-cultivation game, will help your nonprofit in 2018 and beyond. 

More About Donor Advised Funds

Diversity, or the Lack Thereof

In 2017, Race to Lead, the first in-depth study of nonprofit leadership and race, was released. The findings were not a surprise, but exposed with irrefutable data that our sector has a long way to go towards inclusiveness and equity in how its leaders advance. The findings also confirm that racial equality deserves a “hot issue” label: 80% of respondents, across all races, agreed that lack of diversity at the top is a problem for nonprofits. The findings also take our sector to task for its treatment of the LBGTQ community, chronicling challenges to that population’s ability to ascend to leadership positions. Separately, but supporting Race To Lead’s findings, BoardSource’s bi-annual survey of board members/CEOs, Leading with Intent, revealed that the major barriers to diversity on boards likely are current board members, who aren’t walking the walk. (See Key Finding #1 in the BoardSource report.) More than a handful of influential national grantmakers focused significant funding in 2017 on diversity, inclusion and equity initiatives. These initiatives, particularly as they impact efforts to address racial equity nationwide, will continue to be front and center in 2018, and any nonprofit that is not considering how to address issues of diversity, inclusion, and equity - for its own staff, its board, its work, and in connection with individuals and communities served - will be playing catch-up for many years to come. 

Diversity, Inclusion, and Equity Resources

An Increasing Political Divide

If tempers were hot during the 2016 election cycle, they certainly didn’t cool down in 2017. Protests were common and so were pundits dishing out sage advice for family members hoping to enjoy Thanksgiving dinner without arguing over politics. Charitable nonprofits recognized as tax-exempt under Internal Revenue Code Section 501(c)(3) have operated for 60+ years under the legal requirement – and public’s expectation – that they are nonpartisan. But in a year when so much else has been defined by politics, nonprofits can’t escape it either. The long-held assumption that charitable nonprofits should be nonpartisan came crashing down with a few words in February 2017, when the newly inaugurated president said he intended to “totally destroy” the Johnson Amendment. Nonprofits fought back with all their might during 2017, trying to protect their role as trusted community problem-solvers in a nonpartisan space. Nonprofits generally are well-suited to de-escalating contentious community issues and playing a depolarizing role in communities. But the credibility nonprofits bring to this role as nonpartisan facilitators may be threatened.

Efforts to repeal or weaken the Johnson Amendment are ongoing as this blog is being posted, so we won’t know for a little while yet whether the current tax reform efforts will dramatically change the expectations (and mandate) of nonpartisanship. However, what is abundantly clear is that those in favor of repealing or weakening the Johnson Amendment won’t give up if their amendment is not included in the final tax reform bill. Instead, they will be back at it with potentially sharper tactics. This issue affects every tax-exempt charitable nonprofit, the vast majority of which, including faith-based organizations and houses of worship, strongly support nonpartisanship. Therefore, whatever the outcome of the federal tax reform efforts, we can expect that this debate will continue, and that charitable nonprofits potentially will face a completely different fundraising landscape in 2018, if political operatives are able to use charitable nonprofits as vehicles for funding campaigns, endorsing candidates, and/or attracting tax-deductible gifts to support or oppose candidates for public office. Unfortunately, an important role that charitable nonprofits have been able to play in the past – of bringing communities together to solve problems in a nonpartisan space– is at serious risk. How will nonprofits handle these changes? Stay tuned.

Resources on the Political Divide

Budget Cuts

Since the Great Recession, state and local governments across the country have been cutting their budgets and pulling back from providing services to people in their communities, while expecting nonprofits and foundations to fill the gaps. In FY2017, more than half of the states’ budgets were running deficits, leaving little slack for further cuts. States, on average, receive 31% of their revenues from the federal government. Those revenues will be cut as a result of the pending tax cut bills before Congress, because of this basic but rarely discussed formula: Tax cuts = revenue cuts = spending cuts = not enough money to meet community needs = more unfunded demands on nonprofits to bear the burden of increased human needs.

Budget cuts on top of a downward trend in individual giving, plus the probability of slashed giving incentives, should be sending an ominous shiver down every board member’s and fundraising professional’s spine. We look forward to the new State of the Sector survey that the Nonprofit Financial Fund plans to circulate in early 2018 and encourage every nonprofit to participate so that we can put incontrovertible data in front of elected officials to show them the impact of federal and state budget cuts. When NFF last conducted the survey, in 2015, the data showed seven years in a row of increasingly limited resources but expanding needs in communities that nonprofits were not able to fill. Any bets on what the upcoming survey’s data will show?

Resources on Budget Cuts

Talent Development

Will future nonprofit leaders be ready and have the support they need to lead? (It can be lonely at the top.) Both established and “emerging” leaders need a pathway for growth, support, feedback… and did we mention, support? Financial support for nonprofit leadership development is scarce. But during 2017 we started to hear louder voices calling for change in this paradigm. Fund the People launched its toolkit, complete with data on the talent investment deficit, and top reasons to invest in nonprofit talent, discussion guides, and case-making language nonprofits can use to seek grants for investments in talent, along with materials focusing on equity inside the nonprofit workforce and ways to talk with funders about talent in a nonprofit’s workforce. Many state associations of nonprofits connect nonprofit workers with financial assistance for continuing or graduate education, and notably in 2017 CalNonprofits launched a major initiative to shine a light on the severe challenge student debt places on the nonprofit workforce. Talent development issues are finally starting to get the attention they deserve. 2018 could be the year that grantmakers move the needle on investments in nonprofit leadership. Looking for leadership programs in 2018 tailored for your nonprofit staff? Connect with your state association of nonprofits.

Talent Development Resources

Great Relationships between Grantmakers and Nonprofits

It seems that at least once every decade, attention is re-focused on how to overcome the power dynamic between grantmakers and nonprofits that can otherwise block candor, trust, and productive partnerships for the greater good. In 2017, with financial support from the Fund for Shared Insight, several initiatives, including Relationships Matter (Center for Effective Philanthropy) and the Great Funder/Nonprofit Relationships initiative (National Council of Nonprofits/Exponent Philanthropy) highlighted practical steps both grantmakers and nonprofits can take to cultivate better communication and mutual understanding. And GrantAdvisor was launched in 2017 as a tool for nonprofits to provide candid feedback about their experiences with grantmakers. With this renewed focus on authentically listening to and learning from each other, now is the perfect time for both nonprofits and grantmakers to revisit what’s working and what’s not, perhaps using some of the tips below to cultivate great relationships. 

Resources on the Relationship between Grantmakers and Nonprofits


We wish you well as you work with your team, board members, and others to prepare your nonprofit for what’s ahead in 2018. Consider that decision-making and strategic planning are enhanced when your board and staff are continuously scanning the horizon to help the nonprofit adapt to a changing environment. We hope our Hot Topic list will be useful to spark ideas for your own organization’s “environmental scanning.” Here is another forecast that may also offer ideas to help your board develop its strategic foresight for 2018.

What hot topics were significant for your nonprofit in 2017?

What are the implications for your nonprofit’s work in 2018? 

Other "Trends" resources:

 

 

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