This is part 2 in our Trends for 2010.  Click here to see part 1.

Several trends have been emerging in Colorado’s social sector.  Here are a few to keep an eye on in 2010.  These trends recognize the importance of market forces in shaping the nonprofit sector and the tools that leaders can use in charting strategic direction during uncertain times.

  • Nonprofits are increasingly talking about using dashboards or scorecards to track performance.  Boards of directors are asking for one-page of key metrics and performance measures on topics including mission impact, financial health and community engagement.
  • The dynamic nature of today’s operating environment calls for more scenario planning.  Organizations need to evaluate their strategies and business models under multiple scenarios to determine which combination will succeed.
  • More nonprofits are asking fundamental questions about their business models with an eye towards maximizing effectiveness and productivity in meeting community needs.  Not only are they concerned about the economic side of the model (both earned and contributed income), they are also taking a hard look at what they provide (Is it relevant today?) and how they provide it (Is it sustainable?  Are we making a lasting impact?).
  • Competition for a share of the hearts, minds and pocketbooks continues to escalate as demonstrated by the number of year-end appeals in our mailboxes last December.  Given the tough economic forecast for 2010 and 2011 we expect that downsizing of the nonprofit portion of the social sector will pick up this year and next.  We will see consolidation of services, and mergers and acquisitions.  Let’s hope that those processes proceed efficiently so that precious philanthropic dollars aren’t wasted by people endeavoring to maintain “what we’ve always done.”  Market forces are effective at winnowing the marketplace.  That doesn’t mean it isn’t painful.  It also doesn’t mean that it isn’t necessary.  This will be especially important for smaller nonprofits (budget size of $250,000-$500,000) that depend on grants and government contracts.

So, it’s time to revisit your strategy and business model, plan for an ever-changing future, fine tune your metrics, and seriously consider if your community’s needs will be best met by the current marketplace of providers or a redesigned array.  May you have the courage to ask the tough questions and the resolve to implement!