If a nonprofit organization is looking to save costs or improve margins in 2023, these on-the-rise trends can serve as a chance to pivot and reinvent the organization’s business model. Nonprofit leaders can also use the predictions to identify potential risks to their organization, and they can subsequently create a roadmap to mitigate such threats to security, revenue generation, or innovation. This knowledge will help them make smart, mission-focused decisions and succeed in the new year.
Various experts have shared their own predictions on how the sector will evolve in 2023, including the following:
- Nonprofits will need to be smarter in IT investment.
- Nonprofits will need to be flexible to retain IT staff.
- The sector will see a rise in managed cloud services.
- Managed service providers will be vital for organizations’ continued focus on their mission.
With three central themes—optimize, scale, and pioneer—the following strategic technology trends for 2023 can help nonprofits prepare for these predicted changes and see their missions through the current economic and market challenges.
Sustainability Moving to the Forefront
In recent years, nonprofits have come under increasing pressure to have a transparent climate strategy and clear roadmap. It has never been more important for enterprises to pursue sustainable technology solutions to not only do their part to combat climate change, but also retain constituent loyalty and uphold environmental, social, and governance (ESG) values.
With performance metrics tied to the sustainability of an organization, enterprises can be expected to reassess their cloud and network strategy to be more mindful of their environmental impact through choosing more sustainable solutions.
The following are four opportunities organizations can seize to fulfill this goal:
- Automation to reduce resource-intensive activities
- Artificial intelligence (AI) and natural language processing to predict the impact of climate on business
- Advanced analytics to capture real-time performance analysis
- Cloud computing to transform processes and enable remote work.
It is the investment in strategies, including but not limited to the above, that will allow entities to continue to provide their mission-critical services while remaining conscious and sustainable.
Effective Data Management Tools
In this more challenging environment, it is vital for nonprofits to have a good handle on relevant data. In addition to using data management technology to target potential donors more effectively, these powerful tools can help an organization learn areas where they can improve their operations, as well as provide suggestions for additional opportunities.
The need for effective data management tools will continue to grow as employees remain working from home and donors increasingly want to know more about how their contributions are being used. Nonprofits can benefit from having a centralized source of data that will enable cross-department collaboration, advanced audience segmentation for marketing, the seamless pairing of grantors and grantees, more efficient reporting, and effective forecasting and budgeting for a variety of timelines. By having powerful data management and data analytics tools, along with the staff trained to use them effectively, nonprofits can eliminate or reduce administrative and menial tasks and focus their efforts more intensely on their core missions.
The Metaverse: An Exciting Opportunity?
For nonprofits hoping to reinvent the engagement experience with employees, constituents, and donors, as well as accelerate strategies to tap into new virtual markets, the metaverse is an exciting and rapidly growing technology to keep an eye on.
For those who are unfamiliar with what exactly the metaverse is, it is a 3D digital world that allows team members to replicate or enhance their physical activities in an immersive, virtual environment. This is facilitated and accessed through virtual reality (VR) and augmented reality (AR) technology and headsets.
Gartner predicts that fully virtual workspaces will account for 30% of enterprise investment in metaverse technology through 2027, significantly reimagining the office experience. This is especially relevant in a world adapting to post-pandemic life, where employees are often remote and distributed, and talent retention has become problematic. The metaverse presents an exciting opportunity for teams to remain inclusive and collaborative, while also expanding the pool of talent available to the organization throughout the country or even the world.
The digitization of payment technology will be the most important trend coming out of the pandemic, with a 10% increase of credit card usage for charitable giving spend and a 20% decline in check giving over the past five years. With options including Apple Pay, Google Pay, Visa Direct, and other digital wallets, as well as improved online donation form experiences and QR code usage driving individual online donations, this is a trend that will continue in the coming years. Digitization has also begun to extend into other giving channels, such as stock giving and donor-advised funds, as well as a major increase in the adoption of cryptocurrency for affluent donors looking to support organizations.
Although AI itself is not new, the ways that organizations reap its benefits to improve processes for both employees and constituents continue to evolve. The newest example is adaptive AI, an emerging technology that delivers faster, better outcomes by learning behavioral patterns from past human and machine experience. Unlike traditional AI systems, adaptive AI can revise its own code in applications to adjust for real world changes that were not known or foreseen when the code was first written.
Why should this matter to nonprofits? It presents an exciting opportunity for them to exercise more autonomy and help orchestrate faster decisions, while also remaining flexible to adjust quickly as issues arise.
Because adaptive AI requires that an enterprise’s current processes be re-engineered—which cannot happen overnight—the following recommendations can help nonprofits get started in 2023:
- Assess the readiness of decision flows for augmented or automated decision making
- Build a foundation by complementing current AI implementations, instead of a complete overhaul
- Re-engineer decision f lows to make them flexible and capable of being updated as more information is gathered.
It is important for CPAs advising nonprofit organizations to keep an eye on current technology trends for several reasons. Each one offers an exciting insight into the potential of cloud and technology innovation for organizations in 2023 and beyond.
By acknowledging these predictions and taking action on these trends, nonprofits can stay ahead of the game. This enables organizations to improve donor experience and satisfaction, create greater opportunities for revenue growth, and enhance mission-critical operations through better security and sustainability practices.