Nonprofits need to cultivate a new type of workforce

Article | September 25, 2024

Historically, the business world has perceived nonprofits as unsophisticated organizations that offer low wages in exchange for employees deriving value out of meaningful work and societal impact. Nonprofits have not always received an appropriate level of respect for their professionalism and the complexity of their operations.

But in truth, the nonprofit sector includes organizations generating billions of dollars in revenue, which they invest into their missions. In addition, nonprofits are subject to extensive scrutiny and regulations, in many ways more so than their for-profit counterparts, and they do not lag in professional rigor or operational complexity.

Fortunately, the perception of nonprofits is changing. But this shift means that nonprofits need to compete with for-profit companies as they build a dynamic workforce.

New expectations

Younger workers are less willing to accept low pay for the sake of a mission-driven job. Nonprofits are now going head-to-head with for-profit companies to recruit top talent, making it crucial for organizations to offer competitive salaries and benefits, along with professional development and opportunities for advancement.

This change underscores the need for nonprofits to operate efficiently and adopt modern business practices. The younger workforce has a low tolerance for outdated processes and bureaucracy. Raised in a digital age, they expect organizations to leverage technology to streamline operations and foster creativity. Nonprofits that lag in technological adoption may struggle to attract and retain talented employees who want to work in an innovative environment.

Resistance to change

Despite the clear benefits of creating a technology-driven organization, nonprofits leaders who are accustomed to traditional methods may balk at the cost and effort that digital transformation often entails. Conveying the value of technology in a nonprofit setting can be challenging, as the benefits are not always immediately evident.

While for-profit businesses can point to benefits such as increased revenue or market share, nonprofits must navigate multiple variables related to mission impact. This can make it challenging to assess and communicate the benefits of technological investments. But objective standards are available to measure the effect of high-tech solutions.

The importance of technology

Program evaluation and impact measurement are essential components of a nonprofit’s operations. Initiatives must demonstrate their effectiveness and value to secure continued funding. This requires robust data tracking and analysis, often at the point of service delivery, to improve decision-making and resource allocation.

Furthermore, the competition for funding is intensifying, which means that nonprofits must operate more efficiently. Technological solutions can help nonprofits enhance their operations and mitigate cumbersome processes, allowing them to focus on what they do best and deliver their programs with precision to remain competitive.

The modern nonprofit professional

The new wave of nonprofit leaders, increasingly prevalent as the baby-boomer generation reaches retirement age, is more comfortable with digital solutions. They are more likely to view their organization as an environment for career-driven individuals.

There is a trend of experienced professionals from the for-profit sector transitioning to nonprofit roles earlier in their careers. These individuals bring with them valuable insights into digital transformation and operational efficiency, further accelerating the adoption of technology in nonprofits. This new breed of leadership understands the long-term benefits of adopting tech solutions, even if the return on investment is not immediately quantifiable.

The evolving nonprofit landscape demands a new set of skills from its professionals. The need for digital literacy is growing across all functions.

From program managers to back-office staff, everyone in the organization must be adept at using technology to enhance their work. This includes developing skills in data analysis, program evaluation and compliance tracking.

Even roles traditionally seen as community-focused now require a digital component. Nonprofit employees must be prepared to handle compliance requirements, program monitoring and evaluation, and administrative tasks using digital tools. This shift is crucial for enhancing program delivery and demonstrating impact to stakeholders.

The takeaway

Nonprofits operate at a level of complexity comparable to for-profit organizations. Embracing modern business practices and technological advancements is no longer optional, but necessary. As younger generations enter the workforce and transition into leadership positions, nonprofits must strive to create a culture of innovation and professionalism.

By adopting a more operational mindset and investing in technology, nonprofits can enhance their efficiency, attract top talent and make a meaningful difference in the communities they serve.

The key is to balance the mission-driven philosophy of nonprofits with the operational efficiency and creativity often associated with for-profit enterprises. The changing workforce in the nonprofit sector presents an opportunity for growth and transformation, paving the way for a more dynamic and effective industry.

This article was written by Matt Haggerty, Megan Riley and originally appeared on 2024-09-25. Reprinted with permission from RSM US LLP.
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